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This article comes from the spring 2020 edition of the FORESIGHT Climate & Energy magazine, which was largely written before, or at the beginning of, the Covid-19 pandemic.
China is driving the continued growth of the world’s coal-fired power plant fleet, although its appetite for the fossil fuel is starting to wane. The world’s second largest economy in terms of GDP and the most populous, China remains the leading global producer and consumer of coal and exporter of coal finance. The country gets a bad rap as a carbon emitter, but the situation is slowly changing
China’s greenhouse emissions have slightly decreased and emissions from coal are expected to peak by 2025 as cheap wind and solar power and electric vehicles make fast inroads, says Nannan Kou, head of China research at BloombergNEF. As of 2019, just over half of the world’s coal emissions came from China, but the country is also a leading manufacturer of solar and wind equipment, electric vehicles and batteries. With the US, it dominates the global market for wind project installations. Moreover, as the world’s industrial hub, China uses a great deal of coal to manufacture products for other countries. The country’s per capita greenhouse gas emissions are higher than the EU average, but CO2 emissions per person are still less than half of what is emitted in the US, says Han Chen from the National Resources Defence Council, an NGO. “It is a really big country that needs to do a lot more to address coal, but the US emits a lot more per capita and is moving in the wrong direction,” she says. China consumes 53% of its coal for power generation, accounting for some 64% of the country’s electricity production, a substantial drop compared with the recent past, states Lauri Myllyvirta from the US-based Centre for Research for Energy and Clean Air. China’s share of coal in power generation peaked at 81% in 2007, shows the latest BP Statistical Review of World Energy. In 2018, the country generated some four trillion kilowatt hours of electricity from coal-fired power facilities, many newer and less polluting than coal plants in more mature economies. Its coal mining output, however, grew to an eye-popping 3.53 billion tonnes, up from 3.34 billion tonnes at the end of 2017, says the country’s National Bureau of Statistics. This growth is despite natural gas being rapidly deployed, such as for central heating in the north of China. RUNNING AT A LOSS China’s central government decrees via a five-year economic plan how and where banking and insurance money is allocated. The country has pledged to peak carbon emissions by 2030 at the latest, but the plan for 2021-2025, to be approved by China’s top legislature in early 2021, is expected to approve the building of more coal-powered plants, says BNEF’s Kou. China’s leaders are expected to allow the domestic coal plant fleet to increase to some 1100 gigawatts (GW), up from around 1000 GW. A large new coal plant is typically 1 GW. The peak of China’s coal plant building was in 2010, when an astonishing 100 GW was added, compared with some 41 GW in 2019. As of late 2019, about 148 GW of coal plants were either under construction or under suspension and likely to be revived — nearly equal to the EU’s existing 150 GW coal power capacity. NRDC’s Chen suggests many of the plants will run at a loss and for few operating hours: “More coal plants doesn’t automatically mean more coal pollution if the government properly incentivises renewables as the priority energy source, with coal only as a backup option.” In the long run, more ambitious actions are needed to address climate change, decrease the country’s coal power capacity and eventually shift completely to renewable energy, she says. Perhaps more worrying is the lack of any sign that China plans to reduce its funding of coal outside its borders. The country is the world’s leading exporter of coal finance — with investments flowing to India, Pakistan, Vietnam and Indonesia and increasingly to Sub-Saharan Africa, Central Asia and Latin America — funding more than a quarter of coal plants under development beyond its frontiers, says a report by IEEFA, a US think tank. In advance of China’s next five-year plan, unprecedented debate about coal is under way. The coal lobby appears to be winning, but there is real potential for change with increased concerns about air pollution, reinsurance groups, such as China Re, starting to baulk at bearing the risk for domestic coal plants and for pro-coal foreign aid, and growing resistance in recipient countries, which are increasingly fearful of carbon risk and air pollution and less hesitant about cheap renewables. “They don’t want more coal,” says BNEF’s Kou. Investment in coal-fired power has decreased in Indonesia and Vietnam, two of the largest receivers of China’s overseas coal lending, with Vietnam debating whether to invest instead in more solar capacity. But it will take time before China and others stop pushing coal finance and machinery outside their borders with little concern for the effects of air pollution on other populations. “They do not care how many Indonesians die,” says György Dallos, an economist with Greenpeace.
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Ros Davidson
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Anton Ivanov, MH STOCK