China's plunging coal plant approvals signal energy policy pivot, report says

Reuters

China's plunging coal plant approvals signal energy policy pivot, report says

Aug 22, 2024 at 12:00 am GMT

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By Colleen Howe

BEIJING, Aug 22 (Reuters) -A sharp drop in new coal plant permits in China suggests the world's largest builder of the polluting power plants is pivoting its energy policy towards more renewable development, although coal will keep playing a major role, a report said on Thursday.

China approved just 10 new coal plants with 9 gigawatts of capacity in the first half of 2024 - an 83% drop on the year, according to a report by the Helsinki-based Centre for Research on Energy and Clean Air (CREA) and U.S.-based Global Energy Monitor.

The report found China has added over 400 GW of wind and solar since 2023, which led to a 7% drop in coal power output between June 2023 and June 2024.

"With new renewable energy build-outs now capable of meeting all incremental power demand in China, the need for new coal is waning, and there are signs the central government may be embracing this change," the report said.

"This economic powerhouse has transformed clean energy from a climate policy component into a cornerstone of China's broader energy and economic strategies," it said.

China's economic planning body, the National Development and Reform Commission declined to comment on the report.

Other examples of the policy shift include 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, where progress was previously measured by energy efficiency improvements.

The permit findings are in line with a Greenpeace analysis also released this week based on a different data set.

Still, China started building 41 GW of previously permitted coal plants during the first half of the year - nearly as much as was built in all of 2022, and over 90% of the global total.

In 2022 and 2023, a power crunch and the resulting focus on energy security drove a surge in coal permit approvals.

New project proposals are slowing down, the Thursday report said, but not at the same rate as permits, with 37.4 GW of new and revised proposals were submitted in January-June, down from 60.2 GW a year earlier.

With the government aiming for commissioning of 80 GW of coal-fired power this year, project completions could still surge in the second half of the year.

Experts polled by CREA late last year saw China on track to reach a peak in its carbon emissions before its stated goal of 2030. The new report argues China could accelerate its climate action by cancelling new coal plants, noting that China's existing baseload power capacity of 1,890 GW was already more than sufficient to meet estimated peak energy needs of 1,450 GW.

China says it is building new coal facilities to ensure grid stability and to safeguard power supply during periods of peak demand, such as July's record-breaking heat. Its stated policy is to "strictly control" coal power projects.

Reporting by Colleen Howe
Editing by Tomasz Janowski

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