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China still relies on coal power

Coal has no place in Covid-19 recovery plans. So said UN secretary-general Antonio Guterres at an energy summit recently. But has that message reached the Chinese, who account for half the world’s coal demand?

In 2019 coal consumption in China rose 1% to 3.8 billion metric tonnes, according to consulting firm Enerdata.

Over the past decade demand was up 15%, compared to a 50% decline in the United States over the same period. US consumption was down to 0.5 billion metric tonnes in 2019, a 12% reduction on 2018. Europe registered an even more impressive 15% decline in the same year.

There has, however, been an improvement in China’s energy mix, with coal-fired power dropping from 72% of the total in 2009 to 58% a decade later, following heavy investment in renewables. Yet there are concerns the government will turn back to dirtier power in a bid to pump prime an economy ravaged by Covid-19.

The government released a draft law in April that proposes to give renewable energy providers preferential access to the national grid. But the same piece of legislation doesn’t cover China’s energy exports. A report by the Global Energy Monitor and Centre for Research on Energy and Clear Air says that Beijing’s Belt and Road Initiative (BRI) is going to be a major polluter, for instance.

“Where new coal plants are still pursued globally, they’re most often backed by Chinese financiers, exposing the country to overcapacity risks elsewhere in the world in addition to massive overcapacity at home,” the report concluded.

Back in China the government is working through approvals for more than 40GW of new coal capacity made over the first half of this year. It has already approved more new coal-based power plants this year than in the whole of 2018 and 2019 combined.

Most of the new projects are being fuelled by the activities of local government, funded by stimulus spending. The problem is that the new capacity is unlikely to be retired for years. Some policymakers in Beijing are clearly concerned, with six ministries endorsing a statement last month calling for clean energy to be prioritised. But there were no proposals on how to rein in the surge of approvals for coal-fired power.

Proponents of the new plants counter that they are cleaner and more efficient than their predecessors, allowing the shutting down of older and dirtier capacity. This consolidation process is supposed to offset some of the impact of the construction plan.

Something similar is happening among the miners: last month Shandong’s two largest coal firms said they would be merging to create the country’s second largest producer.

Additionally China Energy Magazine has reported that another three state-owned coal groups – Yangquan Coal, Shanxi Jincheng and Lu’An Mining – are combining in Shanxi province as well.

When Covid-19 was at its height in China there was a substantial reduction in energy demand, which translated almost immediately into clearer skies above most cities (see WiC485). Campaigners hoped that it might be a seminal moment in steering the country towards a greener future but others predicted that there would be a reckoning once the government tried to get the economy firing again.

United Nations boss Guterres made the same point in comments to Tsinghua University in the last week of July. The recovery from the pandemic was a “make-or-break moment” for the planet, he insisted. China’s actions would determine whether the world achieves global warming targets laid out in the Paris climate accord too.

“As an economic superpower, the way in which China restores growth will have a major impact on whether we can keep 1.5C within reach,” he warned.

“There is no such thing as clean coal,” he added. “It is deeply concerning that new coal power plants are still being planned and financed, even though renewables offer three times more jobs, and are now cheaper than coal in most countries.”

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