BEIJING—China’s government said it would raise coal power capacity by as much as 20% by 2020, ensuring a continuing strong role for the commodity in the country’s energy sector despite a pledge to bring down pollution levels.
In a new five-year plan for electricity released Monday, the National Energy Administration said it would raise coal-fired power capacity from around 900 gigawatts last year to as high as 1,100 gigawatts by 2020. The roughly 200-gigawatt increase alone is more than the total power capacity of Canada.
By comparison, the agency said it would increase non-fossil fuel sources from about 12% to 15% of the country’s energy mix over the same period. Coal would still make up about 55% of the electricity mix by 2020, down from around two-thirds in recent years.
“This is indeed a disappointing target,” said Lauri Myllyvirta, a campaigner at the environmental group Greenpeace. “Given that there is already severe overcapacity and demand for coal-fired power is going down, we would have expected a cap on coal power capacity much closer to the current capacity level.”
Greenpeace said China already had some 200 gigawatts of coal-fired capacity under construction, meaning that meeting its 13th Five Year Plan goal would require the government to halt some new projects and retire some existing plants.
Officials from the NEA defended the target in a press conference with Chinese journalists Monday, according to a transcript posted on the administration’s website. They said that the government was committed to reducing coal’s dominance in the energy mix and that they reserved the right to slow down coal-project approvals or construction, if necessary.
The country’s power targets are closely watched in the energy sector for indications of what China’s demand will be for commodities ranging from coal to natural gas and uranium. The country’s economic slowdown has already weighed on Chinese imports of some commodities, contributing to lower prices world-wide.
The government Monday forecast overall power demand would grow between 3.8% and 4.6% by 2020. That is down from recent years of double-digit growth, but also marks a rebound from growth of just 0.5% in 2015.
Miao Tian, energy analyst at investment bank North Square Blue Oak, said government-led spending on infrastructure programs would help drive total power needs higher.
China’s slowdown and its shift away from traditional growth sources such as heavy industry have led to significant oversupply in the power sector. Energy officials acknowledged the risk at the press briefing, saying thermal power plant utilization rates plunged about 15% between 2013 and 2015 as a result of the power oversupply.
China’s rejiggering of its energy mix is a critical step toward meeting its climate promise to the United Nations of capping carbon-dioxide emissions by 2030 or earlier. Doing so, however, will require it to invest tens of billions of dollars in clean-energy infrastructure in the coming years.
Nuclear power is one potential solution in the government’s playbook. Officials said Monday they would nearly double China’s installed nuclear power capacity by 2020, to 58 gigawatts. An additional 30 gigawatts would be put under construction during the 13th Five Year Plan period, they said.
http://www.wsj.com/articles/china-doubles-down-on-coal-despite-climate-pledge-1478520063