China suspends construction of new coal plants in 15 provinces

Published 10:41 on March 24, 2016  /  Last updated at 10:41 on March 24, 2016  /  China, China's National ETS, China's Pilot Markets  /  No Comments

China has suspended until 2018 the construction of new coal-fired power plants in 15 provinces in a bid to slash over-capacity in thermal power generation, local media reported Thursday, but observers say the move is not far-reaching enough.

China has suspended until 2018 the construction of new coal-fired power plants in 15 provinces in a bid to slash over-capacity in thermal power generation, local media reported Thursday, but observers say the move is not far-reaching enough.

In addition, approvals of new coal plant projects have been put on hold until 2017 in 13 provinces, according to an unpublished document signed by the National Development and Reform Commission and the National Energy Administration.

This was reported in the Southern Energy Observer magazine, which has seen the document.

The suspensions do not cover plants in western China that are built for long distance transmission of power to demand hubs in the country’s east.

They instead target provinces with a power supply surplus, including Guangdong and Hubei, which host three of China’s seven pilot emissions trading schemes.

Also included were big-emitting provinces such as Jiangsu, Shandong and Shanxi, as well as Heilongjiang, Henan, Liaoning and Yunnan.

China has continued to build new coal-fired power plants despite a drop in coal consumption, causing utilisation rates to drop, and the government said in its recent five-year plan that it would begin suspending construction and new approvals.

Initial analysis by environmental campaigners Greenpeace showed the move would freeze the building of up to 250 projects or around 170 GW worth of coal-fired capacity, but that a further 200 GW under construction and at least 100 GW permitted or in the process of being permitted would not be affected.

“This is nowhere near sufficient to stop the rapid build-up of over-capacity, let alone begin reducing it,” said Greenpeace’s Lauri Myllyvirta, who saw the move mainly as a stop gap measure while details of the power sector’s 13th five-year plan are ironed out.

“But there are some important policy signals as well. It recognises that the western coal expansion is excessive and needs to be adjusted to the demand from the east, or lack thereof,” he told Carbon Pulse.

Meanwhile, the National Energy Administration last week suspended the construction of new wind farms in six western provinces that have renewable energy over-supply.

By Stian Reklev – stian@carbon-pulse.com

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