Indexbit-China is building six times more new coal plants than other countries, report finds

China permitted more coal power plants last year than any time in the last seven years,Indexbit according to a new report released this week. It's the equivalent of about two new coal power plants per week. The report by energy data organizations Global Energy Monitor and the Centre for Research on Energy and Clean Air finds the country quadrupled the amount of new coal power approvals in 2022 compared to 2021.

That's despite the fact that much of the world is getting off coal, says Flora Champenois, coal research analyst at Global Energy Monitor and one of the co-authors of the report.

"Everybody else is moving away from coal and China seems to be stepping on the gas," she says. "We saw that China has six times as much plants starting construction as the rest of the world combined."

What's driving the new permitting of Chinese coal plants?

The report authors found the growth of new coal plant permitting appears to be a response to ongoing drought and last summer's historic heat wave, which scientists say was made more likely because of climate change. The heat wave increased demand for air conditioning and led to problems with the grid. The heat and drought led rivers to dry up, including some parts of the Yangtze, and meant less hydropower.

"We're seeing sort of this knee-jerk response of building a lot more coal plants to address that," says Champenois.

High prices for liquified natural gas due to the war in Ukraine also led at least one province to turn to coal, says Aiqun Yu, co-author of the report and senior researcher at Global Energy Monitor.

Why is China building new coal plants while also increasing renewables?

China leads the world in constructing new solar and new wind, while also building more coal plants than any other country, the report finds.

There are government and industry arguments that the coal plants will be used as backup support for renewables and during periods of intense electricity demand, like heat waves, says Ryna Cui, the assistant research director at the Center for Global Sustainability at the University of Maryland School of Public Policy. "That's being used as an excuse for new projects," Cui says.

Last year's boom in new coal didn't come out of nowhere, says Yu, who notes that the domestic coal industry has long pushed the message that coal is a reliable form of energy security.

"When the energy crisis happened, when energy security is a big concern, the country just seeks solutions from coal by default," Yu says.

Champenois says the surge in permits last year could be China's coal industry seizing upon a last chance to get financing for new coal plants, which are increasingly uneconomical compared to renewables.

"We see it as a door opening, maybe one for one last time," she says. "If you're a power company, you're gonna try to put your foot in that door."

How does permitting new coal plants affect China's goals to reduce emissions?

China is the world's biggest emitter of fossil fuels and has pledged for its emissions to peak by 2030. But there are questions over how high that peak will get and how soon that peak will come, says Champenois.

The International Energy Agency recently reaffirmed there must be "no new development of unabated coal-fired power plants" to keep temperatures less than 1.5 degrees Celsius and avoid the worst effects of climate change.

It's too early to know how much the plants will run and how they will impact China's emissions, says Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air and one of the report's co-authors.

"The challenge though is going to be that all of these power plants have owners that are interested in making as much money as possible out of running them," he says.

What possible solutions may help speed China's green transition?

Myllyvirta says a lot of solutions come down to fixing the country's electric grid, including making the grid more efficient, and making it easier to share energy across China's regions if there are power shortages.

Champenois says shifting coal investments into renewables and storage would be the smart decision for China. That way they won't have "stranded assets" she says, investments that will end up losing money.