August 23, 2024
SINGAPORE – China approved the building of nine gigawatts (GW) of coal power generation in the first half of 2024, down by more than 80 per cent compared with a year earlier as the nation adds renewable energy capacity in record amounts, according to a study published on Aug 22.
China is the world’s top renewable energy investor and has been adding ever-growing amounts of wind and solar capacity.
It added 134.5GW of renewable energy capacity in the first six months of 2024, a 25 per cent year-on-year increase, according to Australian think-tank Climate Energy Finance and China’s National Bureau of Statistics. Wind and solar comprised 128GW of this total.
In 2023, China accounted for more than half of the world’s new wind and solar installations.
And as at end-June 2024, China’s installed solar power capacity totalled 714GW, accounting for 23 per cent of the nation’s total installed power generation capacity, compared with about 200GW of solar capacity for the United States.
“The steep drop in new coal plant permits is a hopeful sign that China’s massive solar and wind builds are dampening its coal ambitions,” said the report’s co-author Christine Shearer, research analyst at Global Energy Monitor (GEM), which tracks fossil fuel and renewable energy projects worldwide.
GEM and the Centre for Research on Energy and Clean Air (Crea), a research organisation registered in Finland and has offices across Asia and Europe, conducted the study.
China’s energy investment trends are closely watched because the nation is the world’s largest source of greenhouse gas emissions heating up the planet. The world cannot win the battle against climate change without China slashing fossil fuel use and emissions.
And analysts are looking for signs that emissions have peaked in the world’s second-largest economy and top coal consumer and producer. Burning coal is the biggest global source of carbon dioxide (CO2) and China has the world’s largest fleet of coal power plants.
China’s coal power generation fell by 7 per cent from June 2023 to June 2024. “If renewables continue to cut into coal generation, then a peak in China’s CO2 emissions – pledged to happen before 2030 – is on the horizon, if not already here,” says the report.
Yet, China is still building coal power plants.
While the issuing of permits for new coal plants has plunged, construction began on more than 41GW of coal projects in the first half of 2024, or more than 90 per cent of new coal construction activities globally, according to the study. For the same period the previous year, construction starts totalled 37GW.
This follows the surge in coal power permits in the country, exceeding 100GW annually in 2022 and 2023, leading to growing concerns about overcapacity in the coal power sector.
But the large additions of green energy are meeting China’s growing electricity needs. So why is it still building new coal power plants?
Ms Qi Qin from Crea, who is also the lead author of the report, said: “Overcapacity in coal power has long been an issue in China.”
She said the surge in coal power approvals during 2022 and 2023 was more about ensuring the security of power supply during peak demand periods. “Overcapacity is not the major concern of the Chinese government. Energy security is,” she told The Straits Times.
“In the second quarter of 2024, for the first time, the growth in renewable energy generation was sufficient to meet the increase in electricity demand, which in turn forced a reduction in coal power generation. This development sets the stage for a significant phasing down of coal power with a view to a potential phase-out,” she said.
She noted that Mr Zhang Jianhua, head of China’s National Energy Administration, recently highlighted that as renewable energy has started to be firmly established, traditional energy sources can now be phased out in an orderly manner.
“This marks a shift in the approach, indicating confidence in the growing stability of renewable energy sources,” Ms Qin said.
And China’s continued additions of green energy should further underpin that confidence. By the end of July, China was predicted to reach a 2030 target to install 1,200GW of wind and solar capacity, according to a recent forecast by Climate Energy Finance.
By the end of June, 1,181GW had been installed.
President Xi Jinping has pledged that China will reach its carbon emissions peak before 2030 and become “carbon-neutral” before 2060. To get there, green energy investment must continue at a rapid clip and coal use needs to fall, along with continued upgrades to the nation’s power grid, analysts say.
“If China can effectively enhance grid flexibility and promote other related grid reforms, it can ensure energy security, even under extreme weather conditions, and truly shift coal plants to a supporting role,” the report said.
Correction note: The name of the Australian think-tank Climate Energy Finance has been updated in this version of the story.