SHANGHAI (Reuters) – China built more than half of the world’s new coal-fired power plants this year and accounted for 90% of new planned capacity, a study showed on Monday, with Beijing still commissioning new projects even as capacity worldwide declines.
Global coal-fired generation capacity saw a net decline of 2.9 gigawatts (GW) from January to June, the first drop on record for a six-month period, thanks to plant retirements in Europe and elsewhere, the U.S.-based think tank Global Energy Monitor (GEM) said in the study.
But China added 53.2 GW of capacity to its project pipeline in the first half of this year – 90% of the global total – even as the world’s second-largest economy seeks to boost its use of renewable energy as part of a broader anti-pollution drive.
China, the world’s biggest coal consumer, also completed 11.4 GW of new capacity over the period, 62% of the global total, and the 12.8 GW that went into construction also amounted to 86% of the world’s total, GEM said.
While coal as a share of China’s total energy consumption fell below 58% last year, a drop of more than 10 percentage points since 2012, the country’s overall coal use has continued to rise.
China said that most of its new generation capacity would come from renewables this year but also set targets allowing another 60 GW of coal-fired projects to go into operation. It has more than 250 GW of new capacity either proposed or under construction.
But it remains unclear how much will be completed, with existing plants already facing losses as a result of overcapacity and low utilisation rates. China has issued investment warnings to 10 regions, saying returns from coal-fired power would fall below government bond yields.
Christine Shearer, GEM’s coal programme director, said it was unlikely that all of the proposed capacity would be completed, but much depends on China’s 2021-2025 five-year plan.
“At the very least there will be pressure to allow the 98.5 GW under construction to carry through to commissioning, although there is also plenty of analysis at this point that suggests China would be better off financially just cancelling these plants,” she said.