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Because China is such a behemoth, its energy decisions
absolutely dwarf anything any other country is doing right now. Case in
point: Over the weekend, the Chinese government ordered 13 provinces to cancel 104 coal-fired projects in development, amounting to a whopping 120 gigawatts of capacity in all.
To put that in perspective, the United States has about 305 gigawatts of coal capacity
total. The projects that China just ordered halted are equal in size to
one-third of the US coal fleet. If the provinces follow through, it’s a
very, very big deal for efforts to fight climate change.
This move also shouldn’t come as a big surprise. In recent years, China, the world’s largest emitter of carbon dioxide, has been making major efforts
to restrain its coal use and shift to cleaner sources of energy. When
Donald Trump and other conservatives in the United States complain that
China isn’t doing anything about climate change, they simply haven’t
been paying attention.
Back in 2013, China was using as much coal as the rest of the world combined,
and it looked like coal use would keep growing astronomically forever.
Local officials were planning hundreds of new coal plants as demand
looked like it would keep soaring for decades.
Except then an odd thing happened. Since 2013, China’s coal consumption has actually fallen
— due in part to a major economic slowdown but also in part to sluggish
output in heavy industries like steel and cement that have
traditionally accounted for half the country’s coal use. (The usual caveats about China’s murky energy statistics apply.)
Increasingly, many analysts suspect that this slowdown in
coal consumption is a lasting shift — particularly as China transitions
away from heavy industry and investment-driven growth and into a modern
service-oriented economy that’s far less carbon-intensive. Going
forward, China’s economy is expected to be focused more on retail shops
and hospitals, less on steel and cement plants. Energy demand will slow.
On top of that, as China’s leaders start to take global
warming seriously, the country has been making massive investments in
clean energy. As part of the Paris climate deal, China has pledged
to get 20 percent of its energy from low-carbon sources by 2030. The
government is planning to install an addition 130 gigawatts of wind and
solar by 2020 and making big bets on nuclear power.
Some analysts suspect this growth in clean energy could be sufficient
to satisfy much of the future growth in household electricity demand.
When you add those two trends together, many forecasters
think China’s coal growth will either flatline or fall in the years
ahead. One recent paper in Nature Geoscience predicted
that China’s coal consumption may have already peaked in 2013. And if
that’s true, then many of the hundreds of coal projects that China has
on the drawing board will be flatly unnecessary.
So that brings us to the recent cancellations. China
currently has around 920 gigawatts of installed coal capacity — and many
of those plants are already running at lower-than-expected capacity
because of weak demand. But there are also hundreds of new coal plants in various phases of planning around the country that would bring total coal capacity nationwide up to 1,250 gigawatts.
That seems excessive, given recent trends. So in China’s latest five-year plan, Chinese officials put a hard cap
on future coal capacity at 1,100 gigawatts. Then last week, they
ordered provinces to cancel 104 coal projects in the works that were
worth an estimated $30 billion. Of those, 47 projects were already under construction, according to a Greenpeace analysis.
Lauri Myllyvirta, an analyst at Greenpeace who has been following this story closely for years, made a map of the plants targeted for cancellation:
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| (Greenpeace) |
That said, there are a whole bunch of important asterisks
here. First, Beijing has only ordered the provinces to cancel the
plants. The provincial governments still have to actually comply. (And we’ve seen some provinces defy Beijing on overcapacity cuts before.)
Second, even under the new cap, Chinese coal capacity
still has some room to expand going forward — which is why environmental
groups like Greenpeace are calling on the government to go even further and cancel the rest of the dozens of new coal projects still in various stages of planning.
Third, while any slowdown in Chinese coal demand is good news for climate change, it’s not great news
for climate change. If the world wants to avoid drastic global warming —
typically defined as 2°C or more — then it’s not enough for China’s CO2
emissions to simply plateau. They have to fall, very drastically.
Doing that will require more than simply canceling any future coal
plants. It will mean either retiring existing coal plants and replacing
them with cleaner sources (as the United States is currently doing) or
retrofitting the plants with carbon capture technology and burying their
emissions underground.
Finally, there’s an important political angle here.
China’s struggle to curtail coal use is putting thousands and thousands
of miners out of work, and if it moves too fast, it risks
unrest in key coal-producing regions (something US politicians are
familiar with). Last year, Prime Minister Li Keqiang announced the
central government would need to set aside $15.3 billion for areas ravaged by unemployment. He also promised
that future job growth in other sectors would help absorb losses in the
declining coal and steel sectors. But no one knows if China can pull
off this tightrope act.
Which is all to say that this week’s big coal plant
cancellation is just one (important) chapter in a story that’s going to
unfold over many decades, with plenty of twists and reversals still to
come.
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