Monday, November 21, 2016

Why China’s New Coal Plants Won’t Stop It From Meeting Its Climate Goals

Projected coal power plant utilization rates in 2020 (Source Credit: Greenpeace, “Burning Money.”  July 2016) Click to Enlarge.
The lesson from China’s coal overcapacity challenge is that capacity levels are not the best measure of success for the country’s climate goals.  More important is its actual consumption of coal, and in this respect China is exceeding expectations.  The country’s coal consumption has been falling since 2013, and the NEA’s 2016 work plan expects coal use to continue to fall in 2016 and its CO2 emissions to level off.  This is huge news and almost guarantees that China will meet its goal of peaking CO2 by 2030, the most high-profile goal it set at the Paris Climate Conference in December 2015.  Climate Action Tracker’s recent evaluation of China’s climate pledges concluded that, given the country’s current emissions trend and internal power sector goals, China is on track to achieve the commitments it made at COP 21.
A market may yet develop for China’s idling coal-fired capacity.  The country has raised the possibility of building an Asian “supergrid” that will allow China to export electricity to nearby countries like Vietnam and South Korea.  Although this could help China use electricity from variable resources like wind and solar more effectively, it could also allow China to export coal-fired power if the coal new plants it’s building are connected to these cross-border power lines. Even the strongest climate commitments may falter under the temptation to use those billions in energy investments to turn a profit.

In the near term, however, the jeremiads against China’s ballooning coal capacity seem overblown.  Bloomberg’s “two new plants a week” statistic is a troubling one, but mainly from an economic standpoint.  China’s over-expansion of its coal-fired power capacity will result in billions in economic losses as valuable capital is thrown into projects that will operate at far below their optimal capacity, but the realities of China’s economic restructuring and slowing energy demand growth, coupled with its continued efforts to develop emission-free sources like wind, solar, and nuclear, mean that these new additions are unlikely to derail the country’s climate commitments.  The country’s power sector will continue to become cleaner, greener, and more efficient, no matter how many idle smokestacks ultimately dot its skyline.

Read more at Why China’s New Coal Plants Won’t Stop It From Meeting Its Climate Goals

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