East Asian Energy
Beijing Nixes a Bevy of New Coal Plants

Beijing just axed 103 planned coal-fired power plants, a concession both to China’s energy market reality (the country’s coal sector is overbuilt) and its endemic air pollution. China consumes nearly half of the world’s coal, but its citizens are paying the price as they struggle to live in cities clouded by toxic smog, itself a byproduct of nearby coal plants. The New York Times reports:

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, such as 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 that were in the works. The new announcements are in addition to a series of project cancellations detailed last year.

China’s coal production reportedly faltered recently, though that claim has to be viewed with a skeptical eye, as China’s self-reported numbers have a history of being inaccurate. For example, the U.S. Energy Information Administration (EIA) concluded that China burned up to 14 percent more coal between 2000 and 2013 than it previously reported.

But Beijing is bowing to intense public pressure to clear its deadly skies, and has a material interest in doing so beyond merely assuaging the concerns of a restive public—smog is estimated to cost China up to 6 percent of its GDP every year in material damages, premature deaths, and healthcare costs. This air pollution gets worse every winter as people crank up the heat to stay warm, resulting in increased demand for electricity that is met by—you guessed it—coal-fired power plants. Cancelling so many new plants signals a willingness to tackle this problem.

There’s more to it than that, though. China’s coal capacity—its total ability to burn the sooty rock if it ran all of its plants on full blast—is roughly double what demand requires. This drop in planned coal plants is already an ongoing process, and it’s happening in China’s neighbor India as well. In both countries, policymakers are hoping to better bring their coal industry infrastructure in line with market demands, and in so doing they’ll be cutting down on local air pollutants and greenhouse gases in the process.

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