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China Cancels 104 Coal Plants Totalling 120 GW of Capacity

January 20, 2017
Reading time: 3 minutes

Coal plant in China. Tobixen/Wikimedia Commons

Coal plant in China. Tobixen/Wikimedia Commons

 
Tobixen/Wikimedia Commons

China continued its attack on its greenhouse gas emissions in dramatic fashion over the weekend, instructing 13 provinces to cancel 104 coal plants totalling 120 gigawatts (GW) of capacity.

“To put that in perspective, the United States has about 305 gigawatts of coal capacity total,” Vox reports. “The projects that China just ordered halted are equal in size to one-third of the U.S. coal fleet. If the provinces follow through, it’s a very, very big deal for efforts to fight climate change.”

The New York Times notes the cutback includes 54 GW of generation that was already under construction—enough on its own to exceed Germany’s entire coal-fired capacity, according to Greenpeace data.

“When Donald Trump and other conservatives in the United States complain that China isn’t doing anything about climate change, they simply haven’t been paying attention,” Vox states.

As recently as 2013, China was using as much coal as the rest of the world, with no end apparently in sight. But after that, the country’s coal consumption began to slide, and “many analysts suspect that this slowdown in coal consumption is a lasting shift—particularly as China transitions away from heavy industry and investment-driven growth and into a modern, service-oriented economy that’s far less carbon-intensive. Going forward, China’s economy is expected to be focused more on retail shops and hospitals, less on steel and cement plants. Energy demand will slow.”

Factor in the Chinese leadership’s strong commitments on climate change, and it begins to make sense that much of the country’s existing, 920 GW of capacity is “already running at lower-than-expected capacity because of weak demand.” Hundreds of new coal plants are under construction across the country, but the latest announcement begins to draw down that total.

Vox’s Brad Plumer points to “a whole bunch of important asterisks” on the latest news. Provinces might defy Beijing’s order to shut down capacity, though the Times says the national government may have made that more difficult by naming specific plants for closure. China’s current cap of 1,100 GW for coal-fired generation still leaves room for new plant construction. And the country can’t move so quickly that it triggers unrest among coal miners, many thousands of whom have already lost their jobs.

Moreover, to meet an average global warming target of 2.0°C or lower, “it’s not enough for China’s CO2 emissions to simply plateau. They have to fall, very drastically,” Plumer writes. “Doing that will require more than simply cancelling any future coal plants. It will mean either retiring existing coal plants and replacing them with cleaner sources (as the United States is currently doing) or retrofitting the plants with carbon capture technology and burying their emissions underground.”

Still, “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 Times notes. “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 Greenpeace coal campaigner Lauri Myllyvirta.

“Stopping projects that have already entered construction is a dramatic decision, because commercial contracts for engineering, construction, and supply of equipment will already have been made, and loans arranged with banks,” Myllyvirta writes, in a Greenpeace Energydesk post illustrated by a map of the plants slated for cancellation.

“Unravelling an estimated $30 billion of contracts and financing arrangements will be complicated. However, spending money and resources to finish entirely unneeded coal-fired power plants would represent even larger economic waste.”

“The biggest impact of this is on projects already under construction,” one power industry professional told Caixin, a Beijing-based business newspaper. “Power plant developers are worrying about how to handle it. Preliminary investments are in place, but the projects will be delayed for several years. Those delays could cause huge losses for developers. The loan interest alone will be a big burden.”



in China, Clean Electricity Grid, Climate & Society, Coal, Community Climate Finance, Demand & Distribution, Ending Emissions, Fossil Fuels, Jobs & Training, Jurisdictions

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