By Lachlan Carey
A new report by Global Energy Monitor
last week when it provided estimates that China is set to build as much new coal-fired power capacity in the next few years as the entire stock of European coal. This has raised fears
that, after years of progress, China is rekindling its coal industry and turning its back on worldwide efforts to reach the Paris climate targets. While this flow of new coal capacity is concerning, it remains dwarfed by the challenge of cutting back the vast stock of relatively new and efficient coal power that promise to lock in emissions for decades.
While 148GW of new coal is eye-catching, the Global Energy Monitor data may overstate the case somewhat. The EndCoal
database they draw from includes many projects that have not yet begun construction and could well struggle to find financing. For example, S&P Platts estimates
that China only has around 40GW of coal under construction and forecasts that China’s coal consumption will peak by 2024. IEA
data shows that final investment decisions for new coal plants fell from 60GW in 2015 to less than 6GW in 2018.
Regardless of how much new coal capacity China ultimately constructs, its existing stock of coal capacity is the larger problem for global climate targets. Roughly half
of the world’s coal capacity is in China, where the average age of a coal plant is just 11.1 years and can be expected to remain operational for another 30 years. The chart below speaks to this larger concern by showing how existing Chinese fossil-fuel infrastructure (admittedly, not just coal related infrastructure) will emit enough CO2 to use up almost half the carbon budget available to remain under 1.5°C of warming, according to a study
from earlier this year
. Almost one third of Chinese fossil fuel emissions come from coal-fired power plants
alone and 80 percent of their cumulative emissions will take place after 2013. Similarly, a 2018 report
from the Rocky Mountain Institute noted that 844 GW of Chinese coal capacity would have to be retired before their expected lifetimes by 2040 to reach the 2°C target.
The problem therefore is not simply one of halting the flow of new power but how to retire the existing stock prematurely, dramatically reduce their load factors, or retrofit them with carbon capture and sequestration. Some of this was already happening, but as the Chinese economy slows, it is returning to coal as the faithful engine of growth. As global leaders meet in Madrid this week for the latest round of UN climate talks
, China could go a long way towards assuaging fears by committing to some of these measures and reaffirming its planned reductions in new coal capacity.
NB: this study uses historical utilization rates, which assumes power plants will run for around 40 years, and therefore does not account for the advanced closures or lower load factors (share of hours the plant is running) that could be brought about by a changing policy or economic environment.