For the third year in a row,
China encouraged
more regions to build
coal power plants
in 2021-2023.
This is a signal that coal
will be a key part of the
14th Five Year Plan,
which will start next year.
Every year the National
Energy Administration
( NEA )
releases a three year
“risk alert for coal power
capacity planning and
construction”.
The 2023 Risk Alert,
published February 26,
gave a red rating
for capacity adequacy
– meaning there’s
a high risk of coal
power overcapacity
– to just three regions.
Orange ratings increased
from two to three, and
all other regions
were rated green.
A red or orange rating
for capacity adequacy
means these regions
cannot approve or start
construction on new
coal power projects
intended to supply
local demand.
Only a green rating
gives permission.
Over the past three years,
the risk alerts have seen
the number of regions
with red or orange warnings
for capacity adequacy
fall from 26 to 17 to 13
for the years 2021, 2022
and 2023.
China adopted a traffic-light
early warning system
in case it needed to cap
coal power capacity
at the local level –
with the aim of slowing
new plant construction.
The risk alert was intended
to be a braking mechanism
on the coal sector .
The national energy authority
is currently drafting the
14th Five Year Plan for energy.
Publishing a new risk alert
with so many green lights
is sending a clear signal.
A report from the China
Electric Power Planning
and Engineering Institute
predicted nationwide power
shortages after 2023.
This led to more calls
for coal power expansion
in the 14th FYP to ensure
supply.
Lauri Myllyvirta,
lead analyst with CREA,
The Centre for Research
on Clean Energy and Air ,
told media that “there are
still voices within China
supporting thermal power
and hoping to see
hundreds of new
coal power plants
built by 2030.
This is clearly contrary
to China’s international
commitments on climate
change.”
China still has 99.7 gigawatts
of coal power capacity
under construction,
and 106.2 gigawatts more
in the planning pipeline
– accounting for 40%
of global capacity
under construction
or in planning.
Due to low utilization rates,
a 2018-2019 report from the
China Electricity Council
found almost 50% of Chinese
coal power generators
lost money over the year.
Figures from Global Energy
Monitor show that in just
the first 18 days of March,
China approved the
onstruction of 7.96 gigawatts
of coal power – more than the
6.31 gigawatts approved
during all of 2019.
There is nothing similar
for wind or solar power.
These 2020 decisions will affect
the Chinese power sector for
20 or 30 years to come.