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China: Coal plant approvals signal energy policy pivot
COAL & MINING

China: Coal plant approvals signal energy policy pivot

A significant decline in new coal plant permits in China indicates that the world's largest builder of such polluting power plants may be shifting its energy policy towards increased renewable development, although coal will continue to play a major role. According to a report by the Helsinki-based Centre for Research on Energy and Clean Air (CREA) and the U.S.-based Global Energy Monitor, China approved only 10 new coal plants with a capacity of 9 gigawatts in the first half of 2024, representing an 83% decrease compared to the previous year. The report also noted that China has added over 400 GW of wind and solar energy since 2023, leading to a 7% reduction in coal power output between June 2023 and June 2024.

The report highlighted that with new renewable energy developments now capable of meeting all incremental power demand in China, the need for new coal is diminishing, and there are indications that the central government may be acknowledging this shift. It further stated that China, an economic powerhouse, has transformed clean energy from merely a climate policy component into a fundamental aspect of its broader energy and economic strategies. However, China's economic planning body, the National Development and Reform Commission, declined to comment on the findings.

Additional evidence of this policy shift includes China?s decision not to approve any coal-based steel plants in the first half of 2024 and Beijing's move to prioritise carbon emissions reductions, which were previously measured by energy efficiency improvements. The permit findings align with a Greenpeace analysis released this week, which was based on a different data set. Nevertheless, China began constructing 41 GW of previously approved coal plants in the first half of the year?nearly as much as was built in all of 2022 and accounting for over 90% of the global total. In 2022 and 2023, a power crunch and the resulting focus on energy security led to a surge in coal permit approvals.

The report, released on Thursday, mentioned that while new project proposals are slowing down, they are not declining as rapidly as permits. In the first half of 2024, 37.4 GW of new and revised proposals were submitted, down from 60.2 GW during the same period the previous year. With the government aiming to commission 80 GW of coal-fired power this year, project completions could still rise significantly in the second half of the year.

Experts polled by CREA late last year believed that China was on track to reach a peak in its carbon emissions before its stated goal of 2030. The new report argues that China could expedite its climate action by cancelling new coal plants, pointing out that China's existing baseload power capacity of 1,890 GW already exceeds the estimated peak energy needs of 1,450 GW. China maintains that it is building new coal facilities to ensure grid stability and safeguard the power supply during periods of peak demand, such as July's record-breaking heat. The country?s stated policy is to "strictly control" coal power projects.

A significant decline in new coal plant permits in China indicates that the world's largest builder of such polluting power plants may be shifting its energy policy towards increased renewable development, although coal will continue to play a major role. According to a report by the Helsinki-based Centre for Research on Energy and Clean Air (CREA) and the U.S.-based Global Energy Monitor, China approved only 10 new coal plants with a capacity of 9 gigawatts in the first half of 2024, representing an 83% decrease compared to the previous year. The report also noted that China has added over 400 GW of wind and solar energy since 2023, leading to a 7% reduction in coal power output between June 2023 and June 2024. The report highlighted that with new renewable energy developments now capable of meeting all incremental power demand in China, the need for new coal is diminishing, and there are indications that the central government may be acknowledging this shift. It further stated that China, an economic powerhouse, has transformed clean energy from merely a climate policy component into a fundamental aspect of its broader energy and economic strategies. However, China's economic planning body, the National Development and Reform Commission, declined to comment on the findings. Additional evidence of this policy shift includes China?s decision not to approve any coal-based steel plants in the first half of 2024 and Beijing's move to prioritise carbon emissions reductions, which were previously measured by energy efficiency improvements. The permit findings align with a Greenpeace analysis released this week, which was based on a different data set. Nevertheless, China began constructing 41 GW of previously approved coal plants in the first half of the year?nearly as much as was built in all of 2022 and accounting for over 90% of the global total. In 2022 and 2023, a power crunch and the resulting focus on energy security led to a surge in coal permit approvals. The report, released on Thursday, mentioned that while new project proposals are slowing down, they are not declining as rapidly as permits. In the first half of 2024, 37.4 GW of new and revised proposals were submitted, down from 60.2 GW during the same period the previous year. With the government aiming to commission 80 GW of coal-fired power this year, project completions could still rise significantly in the second half of the year. Experts polled by CREA late last year believed that China was on track to reach a peak in its carbon emissions before its stated goal of 2030. The new report argues that China could expedite its climate action by cancelling new coal plants, pointing out that China's existing baseload power capacity of 1,890 GW already exceeds the estimated peak energy needs of 1,450 GW. China maintains that it is building new coal facilities to ensure grid stability and safeguard the power supply during periods of peak demand, such as July's record-breaking heat. The country?s stated policy is to strictly control coal power projects.

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