Analysis: China will build hundred new coal-fired power plant in ten years?

China's 14 "five-year plan" (hereinafter referred to as the "difference" planning) will be set up between 2021 and 2025 national goals.To say the, this will be a global response to climate change one of the most important documents.

The world's biggest emitter of the overall planning of economic and social development will be completed and approved at the beginning of 2021, after a year will make more detailed goals of the industry.Electric power industry planning is expected to 2021, and 2022 of the turn of the winter.

In the "five-year plan" before the release, influential stakeholders (e.g., grid operatorsThe state gridAnd industry groupChina electricity council) is to build hundreds of newCoal-fired power plantstheThe targetwhilelobby.while且，于近日更新的针对燃煤电厂建设的"The risk early warning system"(translator note: with red orange green marked risk level, the system is also referred to as "traffic light") sends out a signal further ease license.

It completely ignored the industry serious overcapacity problem: more than half of the coal-fired power plantsHas been losing moneyThe actual capacity, a typical power plantLess than 50% of its capacity.

Efforts to promote coal overweight also looks and ChinaClimate goalsCounter, some of them not later than 2030 carbon dioxide emissions "da feng" goal.If you want to achieve this goal, low carbon energy should be used to satisfy any additional energy demand, this means that the incremental demand for coal will be reduced.

The country is now grappling withNew type of coronavirus outbreak, but in front of the political priority support economic growth, control the excess capacity is fragile.The result is a new round of coal boom, restrain the limiting factor may have on the financial and economic, rather than by regulation.

coal

China's"Economic miracle"Has made the country's second largest economy in the world, and that nearly one billion people out of poverty.But the process is based on the vigorous development of coal energy, it also means that China has becomeSo far,The world's biggest carbon polluters.

According to a recentThe official economic dataIn 2019, China's carbon dioxide emissions growth again2%Or so, and 65% of the annual energy consumption from fossil fuels.

Data show that the coal is one of the largest fossil fuels, carbon intensity in 2019 still account for 57.7% of China's energy use.Coal-fired power plants consumed around the country54%The amount of coal used to provide52%Electricity and 66% of the power output (below the 2007 peak81%).

In 2019, coal and electricity installed capacity increased by about 040 million kw (40 gw), or 4%, relativelyIn the past two years,The red line of growth significantly (see below).As a result, the average capacity utilization rate of coal-burning power plants fall further, an average of less than 50% (blue line).

Every year between 2007 and 2019, China coal capacity (the red line, left axis), unit: gigawatt (GW).In the same period the average capacity utilization rate of coal power plants (right axis, the blue line), unit: percentage (%).Source: China electric power enterprise federation (CEC).The chart used by carbon briefingHighchartsMade from

In this background, around the designated China national goals and priorities in the next five years planning "difference", from all walks of life has been an intense debate (see below).The program is about to set energy targets, ensures it will become a global response to climate change efforts of a key file.

According to the current "much starker choices-and graver consequences-in planning, coal plants up to 1.1 billion kw (1100 gw).Another goal is to 2020, will be in China's energy structure of non-fossil energy accounted to 15%.Some more detailed development plan for renewable energy and other industries to set up the indicative targets.(solar has significantly more than five years ago set up relatively low indicative targets.)

Early next year through the "difference" planning is likely to set properties similar goals.Industry planning will be released in a year hence statement for more details.According to the此前经验，《电力行业规划》预计于2021、2022年之交的冬季发布，该文件可能包含大多数发电选项（但尤其是可再生能源）的增长目标。

Within the government system has launched stakeholder consultation, scope of electric power line planning and drafting, different academic organization and think-tank has been allocated to support the process of research task.

The root cause of excess capacity

China's coal can be traced back to overcapacityThe 12th five-year plan.Making of the plan in the early 2010 s, is introduced for responding to the global financial crisis in historyThe biggest economic stimulus planPart of it.It's intention is massive expansion of coal mining and coal.

To reduce the cumbersome approval process, after the approval of new coal-fired power plants is limited to 2014 from the central governmentdelegateTo the government at the provincial level.

Many local governments to seize the opportunity of the GDP, through new coal project for the local mining coal to make new requirements.This leads to in less than a year, in the absence of proper argument, with a total installed capacity of 169 million kw (169 gw)Nearly 210 projectsDirect access to reply.

From 2013 to 2015, as falling demand for coal, the central government clearly "boom" of the new round project off guard.The government then turned tocutAnd delay has approved projects.

China's economic system is based on the state department can be obtained on the basis of a lot of cheap capital, and as long as its investment behavior are almost consistent with "five-year plan", is almost not concerned about the economic feasibility.

The system can arouse a large number of resources, but because of the company and the local government capacity expansion is used to improve GDP and gain market share, and therefore prone to excessive investment.Although planning mechanisms to control policies to limit excess capacity, but its success degree is different.

Stimulating signs

Many experts and industry bodyclaim, should be "top-down" target and control steering investment driven by market forces.However, only when the investment is dealing with national demand and non-market, countries can mobilize funds for a new stimulus plan.Usually, China would not use budget spending to finance the stimulus, but by state-owned enterprises and commercial Banks, to guide its spending.In this case, if the lack of control over its capacity increment, leads to excessive investment risk.

Through investment spending, for example, in order to realize the economic goal of political priority in front, efforts to control the excess capacity looks vulnerable.The National Energy AdministrationOn FebruarypostRelax for new coal project examination and approval of risk early warning is an example.

"The risk early warning system"In January 2017 was the first timeThe introduction ofTo prevent overcapacity province approved the new project.A year ago, the policy covers 31 provincial power grid in China, only 21 granted "green light", but in the last month increased to 25 (as shown in the figure below).

This change is of great significance: in four new lights up the "green light" grid area,plannedThe coal output has reached 034 million kilowatts gw (34).

According to theGlobal energy monitoring(Global 必威体育在线注册Energy Monitor)data"Risk warning rating" loose situation in 2019 is a clear new project activities.0.18亿千瓦（18GW）的装机容量在此期间开工或重启建设，此前不活跃的0.37亿千瓦（37GW）项目也被重新激活。

In addition, the new novel coronavirus to offset the economic impact, the Chinese government over the past few weeksannouncedThe major infrastructure projects and other stimulus measures.But so far, give priority to clean energy or other green investment measures have not been mentioned.

Through a lot of the focus of investment to stimulate economic development and recent attention to energy security (described below), seems to be the concern about excess capacity and economic feasibility aside.

Someone will be China's prime ministerLi keqiang,In October 2019, an event of understanding to support coal expansion of speech signal.At the meeting has formed a "new energy security strategy," it is more emphasize the core function of coal instead of renewable energy.

This isWidely understoodAfter for a trade war with China, out of concern for energy security and retreat to the coal.China on energy security concerns, however, is mainly involved in oil, gas and to a lesser degree.

On the contrary, the power sector in the choice between renewable energy and coal is largely domestic resources.China has a variety of reasons to reduce its ambitions for renewable energy, but the dependence on foreign energy concerns is not among them.

The target of

No matter whether the idea behind the political support from the top, important people in the industry are pushing a sharp rise in the coal capacity limit.

Made up of China's electric power industry giant industry groupChina electricity councilArgue, to 2030, the coal plants "may" from now to 1.05 billion kw (1050 gw) growthClose to the1.3 billion kw (1300 gw).The goal is based on its annual electricity needs, and meet the demand of peak load capacity of the prediction made.

Considering the retired old power plant, in 2030, the amount of 1.3 billion kw (1300 gw) control objectives will mean in ten years more than 300 million kw (300 gw) of new coal-fired capacity.

Electric power planning and design institute of China (EPPEI)Is a design for most of China's coal and the authority of the power grid infrastructure consultancy.It was in June 2019warningSaid, to avoid there is a shortage of electricity in the next two or three years, new power generation capacity should be 16 provinces in China, and set about building a new coal-fired power plants.

In an opinion piece published in July 2019, a large power grid company of ChinaThe state grid company of China (SGCC)The think tankEmphasis onMaintain the necessity of the coal and electricity installed capacity:

"In the system before and after 2030, maintain 1.2 billion kw or more coal plants, [Chinese] shoulds not be too early, too large scale out of coal, the key core power supply area should also be layout a safe supply of emergency coal-fired units."

But the think tank is not clearly defined, "premature" or "fast" in practice and what it means.

debate

High capacity targets is a driving factor behind the foreseeable building electrification of heating and industrial energy demand.At present, these requirements are usually made of polluting "small coal supply.Director of the National Energy Administration (NEA) was the keyEmphasis onTo this point.

"Coal to gas", "coal to electricity" has become an important mode in recent years, solution to local air pollution is one of the part.Out of concern for energy security, it will further emphasize power rather than the substitution effect of natural gas.

Around, however, is it really need higher coal and electricity installed capacity, also in some controversy.For example, China's hydropower engineering association deputy secretary-general aoj courtsaid, given the excess capacity and insufficient utilization of existing coal-fired power plants, the logic is difficult to self consistent.

Look to have successfully "peak" and emissions downOther countries,Power generationIs the most common and most easy to obtain "no emissions" solutions.Therefore, it is also expected to leadTo reduce emissionsIn the industry.

Is committed to working withThe Paris agreementConsistent goal of China's energy choice "energy scene", all the consensus forecast of coal-fired power generation and installed capacity decline.The figure below shows some scene, as well as the China electricity council put forward coal capacity trajectory.

Between 2005 and 2030, China coal capacity (gigawatt)., according to the historical data with black future scenarios (itu) with red and blue shadows display (1.5 or 2 c path).Source: Global Ener必威体育在线注册gy monitoring (Global Energy Monitor), the China electricity council (CEC), the international Energy agency (IEA), China national renewable Energy center (CNREC), CoalSwarm and greenpeace.The chart used by carbon briefingHighch a. The RTSIs made.

To realize the climate in the above path, ChinaCoal unitHave been faced with a very short run fixed number of year, they are relatively young, serving an average of 14 years.Add more capacity will only further shorten its service life, reduction will also become more "to swallow".

Political vs. the economy

Although planning mechanism appears to be tend to be a new round of expansion of coal, but given the current economic situation and system, the industry itself seems to be more cautious.

In addition, the carbon dioxide emissions depends on coal consumption, rather than the installed capacity.This means that, even in building new coal boom, there is no guarantee that China's coal industry emissions of carbon dioxide emissions will increase.

China's current coal capacity is about 1.05 billion kw (1050 gw), therefore the goal of current is driving simply means that a net gain of 1.5 250 million kw (150-250 gw).To 2030, at least one hundred million kw (100 gw) in 2000, before the construction of the coal and electricity installed capacity will retire, and this will make the proposal of new capacity to 2.5 350 million kw (250-350 gw).

One hundred million kw (100 gw)The new coal project is under construction.This means that an extra 1.5 250 million kw (150-250 gw) incremental will have to get permission to put into construction and financing.

Between 1980 and 2019, China (left) and other parts of the world every year (right) coal and electricity installed capacity (gigawatt).Source: Global Ener必威体育在线注册gy monitoring (Global Energy Monitor) data.The chart used by carbon briefingHighchartsIs made.

However, in an effort to limit the "new champions" virusEconomic damageBefore, the Chinese government has actuallyTo prepareFreeze in the next one to two years of the regulated prices, to help manufacturing and other sectors of the economy.But the measures will hurt the profitability of power generation industry.

At the same time, given the competition from renewable energy sources and serious excess capacity for all system, coal-fired power plants of years is expected to run with the passage of time and further to fall.

The average years elapsed time of existing coal-fired power plants is four thousand hours, less than half of the theoretical maximum 8760 hours, the main electric power company's profitability has been extremely low.Last year, the industry appeared for the first timebankruptcies, the pressure from wind and solar power is one of the key factors.

Power system is farewell to ensure system running time and pricing plans.In the next few years to carry out the reform of electricity market will further reduce the profitability of new coal power plant, and increase the uncertainty.

When cross-regional transmission and flexibility to increase (rather than the provinces like island construction), meet the demand of peak the installed capacity will be greatly reduced.Currently proposed many installed targets and predict seem to have ignored the change.

Climate tightening

In late FebruaryChinese energy data has made it clear that in order to realize the goal of China's climate, must speed up the clean energy investments.In 2019, China's carbon dioxide emissions have risen for three consecutive years, rising by about 2%;And only 35% of new energy demand by low carbon energy supply.

To achieve carbon emissions "peak" and drop, the share must reach 100% or higher, especially considering the demands for energy security limits the coal-to-liquid, the scope of "coal to gas".

From what has been discussed above, the existing evidence, for various reasons, some of the major state-owned coal developers on the promise of new coal-fired power generation projectindecision.This is fundamentally different from decision-making body and put forward the tentative idea of the above mentioned lobby.

In the near future energy magazine interview (article is now unable to online, but the web cache is still visibleIn this), from China's official think-tankEnergy research institute (ERI), researchers put forward a new coal plants should stop, and was eliminated coal 2050 years ago.The interview only social media sites in China there is a few hours "WeChat" was removed, the sensitivity of the issue.

Focusing on coal overcapacity in many departments, have an overwhelming "heavyweight" role, namelyState-owned assets supervision and administration commission (SASAC).According to the(Reuters) -Reported that a report on the debt of the power industryLeaked documentsProposal, a radical restructuring should be made for the industry to improve its financial performance.

The stand or fall of the file also suggested merging companies assets, and close the total installed capacity of hundreds of millions of mw coal-fired power.From the state-owned assets supervision and administration of coal plants caused by the excessive expansion of financial losses and a description of the predicament, the ministry is expected to resist new coal boom covered by the same company.

Bring about a new round of coal boom in China, will be a significant risk of global response to climate change, also can make the country's own energy transformation becomes more complex.However, even if the "difference" planning focus on creating another prosperous period of coal, the target is still may be limited by economic and financial constraints and unable to reach.

The 12th five-year plan.Although it has caused severe overcapacity, but the actual building and planning also has the very big distance between coal and electricity growth target set.However, even if is such result, it will still be China's electric power industry and the international community to bring huge uncertainty.