More Chinese-backed coal plants cancelled than commissioned globally
Image credit: Wikimedia Commons
The last five years have seen more China-linked coal-fired power capacity shelved or cancelled than commissioned, according to a new report.
The Centre for Research on Energy and Clean Air (CREA) said this finding indicates that despite massive construction at home, China’s overseas coal projects face significant political and financial challenges in most host countries.
Over 120GW of coal-fired capacity operating today can be linked to China. Between 2000 and 2017, Chinese firms invested approximately US$115bn (£82bn) in overseas power plants, the report found.
Since 2017, a wave of project cancellations has hit China-backed coal power investments - 4.5 times as much capacity has been shelved or cancelled than has entered into construction.
In 2018, a study found that two-fifths of the world’s coal power stations were already running at a loss. As well as their detrimental impact on the environment and high carbon output, the price of renewable energy has been falling dramatically in recent years, making new coal installations appear less economical in comparison.
Indeed, the CREA report specifically cited the “weakening economic competitiveness of coal” as one of the factors behind the shelving of projects. Public opposition and concerns about negative environmental and social impacts, as well as existing overcapacity in recipient countries, were also to blame.
Overseas coal projects with Chinese involvement have far higher air pollutant emissions than allowed for coal power plants in China, the report said, with declared emission limits that are on average six, four and seven times as high as the NOx, PM and SO2 emissions limits respectively in Chinese regulation.
Furthermore, in terms of CO2 emissions intensity, only three out of 16 projects were found to meet China’s domestic standards for thermal efficiency. On average, the projects had 8 per cent lower thermal efficiency than the minimum under China’s thermal efficiency standards.
CREA speculates that recent policy signals from recipient countries might well have made Chinese banks and suppliers more cautious about engaging in new projects, although it does not have the data to back this assumption yet.
In May, the Industrial and Commercial Bank of China, which is the world’s biggest bank by assets and a major source of global coal financing, said it was drawing up a “road map” to pull out of the coal sector.
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