China Cancels 103 Coal Plants, Mindful of Smog and Wasted Capacity

by MICHAEL FORSYTHE | January 18, 2017



A coal-fired power plant in Shanxi, China, in 2015. The government has canceled 103 coal plants that were planned or under construction, eliminating 120 gigawatts of future coal-fired capacity. Credit Kevin Frayer/Getty Images

China is canceling plans to build more than 100 coal-fired power plants, seeking to rein in runaway, wasteful investment in the sector while moving the country away from one of the dirtiest forms of electricity generation, the government announced in a directive made public this week.

The announcement, made by China’s National Energy Administration, cancels 103 projects that were planned or under construction, eliminating 120 gigawatts of future coal-fired capacity. That includes dozens of projects in 13 provinces, mostly in China’s coal-rich north and west, on which construction had already begun. Those projects alone would have had a combined output of 54 gigawatts, more than the entire coal-fired capacity of Germany, according to figures compiled by Greenpeace.

The cancellations make it likelier that China will meet its goal of limiting its total coal-fired power generation capacity to 1,100 gigawatts by 2020. That huge figure, three times the total coal-fired capacity in the United States, is far more than China needs. Its coal plants now run at about half of capacity, and new sources of power, like wind, solar and nuclear, are coming online at a fast clip.

Nevertheless, China’s capacity would have surged well past the 1,100-gigawatt mark by 2020 had it not begun canceling coal-fired plants in the works. The new announcements are in addition to cancellations detailed last year.

“The key thing is that yes, China has a long way to go, but in the past few years China has come a very long way,” said Lauri Myllyvirta, a researcher for Greenpeace in Beijing.

Electricity generated from coal is the biggest source of the greenhouse gases that lead to global warming, and pollution from such plants contributes to the miasma of smog that has blanketed much of China this winter. But despite the vast amount of capacity added in recent years, China’s coal use has been on the decline since 2013.

Still, China’s state-owned power companies remain politically powerful. Grid operators often favor power generated from coal plants over that made by wind and solar, and despite the cuts, China is still building far more capacity than it needs.

In contrast, utilities in the United States have only four coal-fired plants set to go online through 2020, with a combined capacity of less than 1 gigawatt, according to the Energy Information Administration. The United States retired more than 13 gigawatts of coal capacity in 2015 as the country shifted toward natural gas, wind and solar.

Despite the government announcement, it is far from clear that the Chinese jurisdictions most affected by the directive, including Inner Mongolia, Shanxi and Xinjiang, will actually take the politically costly move of halting construction, laying off workers and canceling contracts, said Lin Boqiang, director of the China Institute for Studies in Energy Policy at Xiamen University in southeastern China.

“Some projects might have been ongoing for 10 years, and now there’s an order to stop them,” he said by telephone. “It’s difficult to persuade the local governments to give up on them.”

But Mr. Lin and Mr. Myllyvirta said one factor that made the directive likelier to succeed was its specificity. It names each project set for cancellation, putting provincial and other local officials on the spot and making it harder to continue the projects.

{read this article online here}