Is China Hiding a Renegade “Coal Tsunami”?

October 3, 2018

coal_satchina

The Mountains are high, and the Emperor is far away.Chinese Proverb

Connections between the Chinese Central Government in Beijing and the people has historically been weak, with much regional autonomy and little loyalty. The proverb has thus come to generally mean that central authorities have little influence over local affairs, and it is often used in reference to corruption.   –   Wikipedia

Really bad news, if true.

China building renegade coal plants.

However, read on – mitigating factors may make this phenomenon somewhat self limiting.

Guardian:

Chinese coal-fired power plants, thought to have been cancelled because of government edicts, are still being built and are threatening to “seriously undermine” global climate goals, researchers have warned.

Satellite photos taken in 2018 of locations in China reveal cooling towers and new buildings that were not present a year earlier at plants that were meant to stop operations or be postponed by orders from Beijing.

The projects are part of an “approaching tsunami” of coal plants that would boost China’s existing coal capacity by 25%, according to the research group Coalswarm.

The total capacity of the planned coal power stations is about 259GW, bigger than the American coal fleet and “wildly out of line” with the Paris climate agreement, the group said in a new report.

“This new evidence that China’s central government hasn’t been able to stop the runaway coal-fired power plant building is alarming – the planet can’t tolerate another US-sized block of plants to be built,” said Ted Nace, executive director of CoalSwarm, which is funded by international green groups and private donations.

CoalSwarm-Tsunami Warning:

  • ■  259 Gigawatts (GW) of new capacity are under development in China, compa- rable to the entire U.S. coal fleet (266 GW). If built, the new plants will increase China’s current coal fleet of 993 GW by 25%.
  • ■  The new capacity is the result of a permitting surge from late 2014 to early 2016, after a regulatory devolution from central to provincial authorities.
  • ■  In 2016 and 2017, central authorities sought to rein in the surge through a series of suspension orders.
  • ■  Contrary to previous reporting and analysis, many of the restrictions only delayed new projects rather than stopping them.
  • ■  Adding 259 GW of new coal power in China is wildly out of line with the Paris climate agreement. According to the IEA, a 50% chance of limiting future tem- perature increases to 1.75°C requires that China phase out its traditional coal plants by 2045.
  • ■  The surge in new projects will overwhelm China’s own 1100 GW coal cap in the country’s current Five-Year Plan.
  • ■  Cancelling the 259 GW of new coal plants would free up US$210 billion in capital expenditures, enough to build nearly 300 GW of solar PV or 175 GW of wind power.

For climate prospects, adding 259 GW of new coal power capacity to the Chinese coal fleet is wildly out of line with the goals of the international Paris agree- ment, no matter what their start date. According to the International Energy Agency (IEA 2017), a 50% chance of limiting average future temperature increases to 1.75°C requires that China, with half of the world’s coal power capacity, close all coal plants without carbon capture and storage (CCS) by 2045.2 Such a phase-out requires aggressive retirement of existing coal plants, not the building of huge numbers of new ones.

Beginning in 2013, it rapidly became clear that the country’s coal plant boom was outstripping the country’s needs. While high numbers of plants were continuing to come online, production of electricity by China’s coal plants was actually declining, with fleetwide output dropping from 3,981 terawatt hours (TWh) in 2013 to 3,946 TWh in 2016, even though coal-fired capacity rose in the same period from 796 GW to 946 GW (China Electricity Council 2013, China Electricity Council 2016).

Due to the growing overcapacity, by 2015 average coal plant utilization rates dropped to 49%, with the typical plant sitting idle more often than it was being used (Figure 2).

coaltsunami1.jpg

Finding itself in the midst of a worsening overcapacity problem, the Chinese government implemented measures that proved to be highly counterproductive: a decentralization program that moved coal plant permitting authority from Beijing to individual provinces. In September 2014, authority over coal plant construction approvals was moved from the National Development and Reform Commission (NDRC) to the provincial DRCs. In March 2015, environmental impact assessment (EIA) approvals by the Ministry of Environmental Protection (MEP) were moved to the provincial Environmental Protection Bureaus (EPBs).

The measures were reportedly intended to help prov- inces make investment decisions that better aligned their local power demand with supply, with the central government limiting its role to creating total capacity limits and policy guidelines. In practice the devolution of authority resulted in an unprecedented surge in permits, as local authorities raced to approve projects they believed would stimulate local econo- mies and benefit economic interests with influence at the provincial level.

Provincial regulators soon showed themselves to be far more lenient than the central authorities, moving quickly to grant permits that had sat for several years on federal waiting lists, and even retroactively approv- ing 15 GW of coal power plants that had been illegally operating for years without permits. Prior to hand- ing authority to the provincial EPB, the federal MEP had vetoed two projects from Shanxi Province due to emission concerns in an already over-polluted area. Shanxi’s EPB reapproved these two projects immedi- ately after it received the authority, then approved 21 similar projects in seven months.

Overall, permits for construction saw a three-fold increase, from an average of 5 GW a month in 2013–2014 to 15 GW a month in 2015, as shown in Figure 3. There was also a three-fold increase in monthly EIA approvals over the same period (Myllyvirta and Shen 2016, Alkon and Wong 2018). By the time the central government began restricting new permitting in March 2016, the provinces had given construction approval to over 245 GW of new coal- fired capacity.

While government subsidies and tariffs may guarantee profits for coal plants now, that situation is likely to change soon. In 2015, China announced plans to move toward a more market-based organization of the electricity sector to replace regulated pricing and “equal share dispatch.” Coal power projects permitted by the provincial DRCs after March 15, 2015, will no longer have guaranteed hours and will have to compete in wholesale electricity markets. The shift towards competitive energy procurement and dispatch has already decreased tariffs received by coal plants in pilot provinces (Zhao et al. 2017).

In addition, the Chinese government began implement-ing a national carbon trading market in 2017. Coal plant owners will have to purchase carbon permits to offset their greenhouse gas emissions, raising the input costs of the plants and making them less competitive com-pared to lower-carbon alternatives (Zhao et al. 2017). Also, the central government has begun mandating that grid companies purchase a minimum number of hours for renewable power, which will cut into coal plant’s preferential access to the grid and further lower their utilization hours (Alkon and Wong 2018).

Finally, in 2017 the central government began regulating the number of new coal plants allowed to connect to the grid. The move means surplus coal power capacity will be unable to immediately come online and begin recouping development costs. The average coal plant is already operating for fewer and fewer hours while over-all power capacity continues to grow (China Electricity Council 2018). Recent estimates find China already has excess coal power capacity far beyond its needs, representing “stranded assets” unable to earn an economic return on investment (Feng et al. 2018, Myllyvirta and Shen 2016, Gray 2016).

Takeaway:

I need to find out more.

The coal industry is just as lawless, powerful, and entitled in China as here.

In the US, Republicans generically seek to take regulation power away from Washington’s more powerful regulators, and put them in the hands of more easily influenced state officials. This means weaker pollution controls.
Chinese efforts to do the same thing have resulted in the situation outlined above.

We know that pollution is one of the primary sources of social unrest in China right now – this won’t help. Chinese leaders are of an age to remember what happened in the last cultural revolution – with senior officials ending up picking beans in the provinces. I suspect they are thinking this thru.
More later.

39 Responses to “Is China Hiding a Renegade “Coal Tsunami”?”

  1. indy222 Says:

    Interesting that coal use is going up like this, while China’s been cutting back on growth in solar PV. That would be worth digging into…. What’s the motivations going on here?

    • rhymeswithgoalie Says:

      Whoa!
      Is it the rate of new solar that’s gone down or the increase that’s leveling out? That is 100 in year1 to 200 in year2 to 400 in year3 to 700 in year4 are increases of 100%, 100% and 75% (rate going down) but the total increase every year (+100, +200, +300) still being significant.

      • greenman3610 Says:

        do you have a link for that?
        my understanding is that solar deployment in China is still very rapid, but that the subsidies might have been cut a bit.

  2. Abel Adamski Says:

    The US and India are going to be the two worst impacted nations with AGW.

    Hmmmm

    • Sir Charles Says:

      Well. History wise the US have been the greatest emitter of GHGs.

      • dumboldguy Says:

        Your point is…?

        • rhymeswithgoalie Says:

          Uh, that the US has been responsible for most of the problem so far?

          Which aspect of the pie charts didn’t you understand?

          • Sir Charles Says:

            Wait. He’ll soon call you a “Russian troll”.

          • dumboldguy Says:

            More inane attention-seeking from Sir Chucky. I have seen NO evidence that rhymeswithgoalie may be a Russian Troll. Chucky on the other hand….????

          • dumboldguy Says:

            Oh, I understand the pie chart quite well. I learned all about graphic representation of quantitative data while getting degrees in physics and biology and have pursued it as sort of an “scientific art” interest since. I own two of Edward R. Tufte’s books—The Visual Display of Quantitative Information (1983), and Envisioning Information (1990). Have you read them? Excellent reads.

            My query to Sir Chucky was motivated by the fact that his comment had little to do with the fact of what’s going on with coal in China RIGHT NOW, which is, after all, the topic of this post on Crock. (Or is he just doing his Russian Troll thing and smearing the U.S. yet again??)

            And it’s likely that nearly all Crock readers know anyway that the U.S. was and is responsible for a disproportionate share of global GHG’s. That’s why I asked what his point was (if there was any beyond his usual attention seeking and space grabbing here or trolling for the Russians)

            The chart IS useful and has much interesting data, but only to a point. Pie charts of one year’s data compared to 265 years of cumulative data doesn’t tell us as much as a line chart would, i.e., one that plotted emissions per year on the vertical axis, time on the horizontal axis, and used a different color/line for each country. Do you understand that?

          • Sir Charles Says:

            The usual ad hominem. Yawn!

            I have come to the conclusion that you abuse this forum just for satisfying your cravings for insulting other people(s), dumb old guy. I haven’t read a single comment from you which is not abusive. Plus you are unable to read and understand any of the articles linked here. I suggest it’s you who is the troll here.

          • dumboldguy Says:

            Chucky has come to a CONCLUSION? ROTFLMAO!

            From the dictionary: “Conclusion: a judgment or decision reached by reasoning”.

            Since Chucky’s comments here on Crock generally show the reasoning abilities of a mushroom, I would dispute his assertion that he has reached any valid sort of “conclusion” about anything. If anyone abuses this forum, it’s Chucky—-by overposting irrelevancies and inanities, making references to masturbation and posting videos of humping dogs (more than once), violently attacking anyone who questions his science-ignorant crap, and generally behaving like an immature bull in a china shop. This is a freaking blog about science and climate change, Chucky, not a vehicle for low IQ narcissists like you to show off your intellectual and personal inadequacies.

            I DO insult only a handful of folks here, and most of them either started it on a personal level or asked for it by the intellectual quality and/or personally insulting nature of their posts. Have you ever heard of “sheep dogs”?

            You “haven’t read a SINGLE comment from me which is not abusive”, you say?. Really? That may be the single dumbest thing you’ve ever said. And if we’re talking about being abusive, don’t think that Crockers are unaware of the fact that virtually EVERY comment I make on ANY thread gets a thumbs down vote from YOU, and sometimes from one or two other gutless wonders who don’t have the balls or knowledge to debate a topic with me.

            “Plus you are unable to read and understand ANY of the articles linked here”, you say of me. Congratulations, the second dumbest thing you may ever have said, and #1 and #2 in the SAME comment—-you’re on a roll! LOL—We’ll let others judge whose understanding of science, politics, economics, psychology, mathematics, reading level, and the English language is superior.

            “I suggest it’s you who is the troll here”, you say. Well big whoop! You need PROOF and REASONED ARGUMENTS to make that “suggestion’ a reality. Your half assed “suggestions” and childish OPINIONS don’t cut it, and that’s about all you seem to be capable of,

            Ad hominem. my ass.

          • dumboldguy Says:

            Yes, you should look embarrassed, Chucky, and it IS appropriate to cover your face and duck your head while you contemplate how you have made such a fool of yourself. Too bad it’s not in color so we can see how red your face is.

          • Sir Charles Says:

            You’re sitting in a glass house and throw one stone after the other, dumbo.

          • dumboldguy Says:

            “You’re sitting in a glass house and throw one stone after the other, dumbo”,
            says Chucky.

            With that bit of colossal stupidity, I leave him the last word on this thread. Only a “demented rooster crowing about his imagined successes” would be clueless enough to make such a comment. Wear the rooster suit in sublime ignorance, Chucky—-you do NOT understand that it does NOT make you the king of the barnyard. ROTFLMAO!

          • Sir Charles Says:

            Sure. Dunning and Kruger told me that nobody is smarter than the dumb old guy.

          • dumboldguy Says:

            Chucky has apparently discovered Dunning and Kruger’s work, and like a child with a new toy, he’s now playing with it eagerly. Most children, when given a new toy like a truck, for instance, know that it’s played with “wheels down and rolling”. Chucky instead smacks himself in the forehead with it. That’s our boy!

  3. rhymeswithgoalie Says:

    When looking at the numbers for China coal power stations generating public electricity, remember that there are a lot of Chines coal-burning industries (and household heating) that isn’t being counted.

    I still recommend Chinese reporter Chai Jing’s Under the Dome presentation. For those of you short on time, just about any 10 minutes of the talk is interesting, and/or you can watch it at 1.25x speed:

    This was one of the few predictions I made in the 1990s about Chinese development: As the middle class grew, they would become more demanding about reducing pollution.

  4. indy222 Says:

    What’s past is past – yes, the U.S. has the greatest cumulative CO2 emissions, but TODAY and going FORWARD and therefore relevant to the pressure point for action and policy, China is now far above the US, and Europe too.

    Here’s a link to the story on China’s curtailing subsidies for solar because demand isn’t there to soak up supply. This is actions as of mid ’18 so the ’17 data would not show any decline in growth rate. https://www.theepochtimes.com/chinas-solar-industry-in-deep-trouble-following-us-tariffs-with-predicted-billions-in-losses_2608805.html

    • lracine Says:

      Thank you for the link. Interesting read.

    • Sir Charles Says:

      So where is your smartphone made? Or tell me one room of your house where you don’t find an item made in China. The west has outsourced manufacturing to the far east because it’s cheaper there. This comes for a price. Less wages for the workmen and lower environmental standards. So if you take these outsourced goods into account, the US still have a worse carbon footprint than China. Leave alone the CO2 emissions per capita which are much higher in the US than in China. It’s hypocritical to buy cheap goods from China and then point the finger at them when it comes to GHG emissions.

      • dumboldguy Says:

        Can’t quarrel with any of that—-Chucky nailed it.

        It doesn’t matter where something is manufactured—-outsourced or “home made”—-what matters is the fact of it’s being made at all, which produces GHG (which blows around the planet and over producer and consumer nations equally).

        Try this on. Trump manages to destroy the economy and the country to the point that we in the U.S. becomes a third-world nation. All the manufacturing we have outsourced comes screaming back here because we now have the cheapest labor on the planet. World trade settles in at around the same level of imports/exports as before but in mostly opposite directions from now. Total GHG emissions remain the same, sources just move around, and…..

        …..Nothing has really changed

  5. indy222 Says:

    This might be a better link on how China’s new policy on supporting solar is going to affect PV deployment in China over the rest of this decade

    https://www.pv-tech.org/news/china-putting-major-breaks-on-solar-deployment-as-new-market-rules-imposed

  6. indy222 Says:

    The upshot is that the changed policy of China towards solar PV is predicted to lead to a 30% drop in solar PV deployment in ’19 vs ’18, and also in ’20 vs ’18

  7. neilrieck Says:

    First off, the Chinese are just as practical as everyone else. Once they (or anyone else) commits to build a non-green power generation facility, the new plant will come on line within 5-7 years. (here, non-green can mean fossil-fuel or nuclear). So if any country announces something like “the end of coal” they do not mean they will terminate projects already in the queue.
    Secondly, many (but not all) green energy plants can be commissioned and decommissioned in as little as three months. Think wind, solar, and that battery system Musk built for the state of Southern Australia.
    Thirdly, China appears to have invested in all flavors of power and is letting them compete with each other “in the Chinese market”. This is something you would have expected in the West but it did not happen because traditional fossil fuel companies were able to lobby governments to get subsidies even though their industry started in 1859.
    Now watch this: https://www.youtube.com/watch?v=D99qI42KGB0

  8. redskylite Says:

    Is China Hiding a Renegade “Coal Tsunami”?

    With questions like this and general world volatility (and u-turns) in politics, it takes great optimism to see the Paris target ever being achieved (or even the old +2 degrees Celcius target). .

    Climate scientists are struggling to find the right words for very bad news

    1.5 degrees is still possible, but only if the world goes through a staggering transformation.

    https://www.washingtonpost.com/energy-environment/2018/10/03/climate-scientists-are-struggling-find-right-words-very-bad-news/?noredirect=on&utm_term=.2e528ac8436a

      • indy222 Says:

        Shot. Yes. Now, what these folks who talk about those old carbon budgets SHOULD do it put in the post-IPCC AR5 science on much stronger permafrost carbon emissions, stronger debilitating soil carbon effects, and deforestation re-acceleration, such as MacDougall et al has tried to do, and then you’d get something semi-realistic. Those old IPCC carbon budgets don’t include critical physics that makes them useless.

        Then, they should for GOD’s SAKE stop using the as-drawn GISS temperature plots and keep saying that we’re only at +1C right now. No! We’re at +1C relative to that GISS baseline, which you see in the corner in tiny print is the “1951-1980 average”. (!! Hardly pre-industrial). But of course, the baseline that physics cares about is relative to the “pre-industrial” baseline, and THAT, using the latest determination by Schurer, Mann, et al 2017 with their GHG modelling, and accepting TRUE pre-industrial, an average over many centuries up to about 1800, gives you a baseline that’s -0.2C from the older conventional “pre-industrial” of 1880-1910. When you do that math, you find that we hit +1.48C above pre-industrial as of the 2016 GISS datapoint. It’s a bit down from that now, but not much. Given the “in the pipeline” temperatures even if we don’t emit another gram of CO2, we’ve not only “shot” the 1.5C target, we’ve machine-gunned it with bullets many times over.

        • Sir Charles Says:

          Have a look at the video description on YouTube.

          • indy222 Says:

            The “pre-industrial” green line here looks warmer than the 1880-1910 average, which was always the “pre-industrial” baseline from the classic papers of several years back. But the new Schurer, Mann et al 2017 work says a more realistic pre-industrial is 0.2C cooler even than that 1880-1910 average (in 1880-1910 we were already pumping out CO2 at 10% of today’s rate), so that the temperature scale appropriate for a graph like this would be about 0.3C (eye-balling it) hotter than shown.

  9. lracine Says:

    “Due to the growing overcapacity, by 2015 average coal plant utilization rates dropped to 49%, with the typical plant sitting idle more often than it was being used (Figure 2).”

    The source of this statement is the China Electrical Council, an official government agency.

    China’s Official government number have always been held with a VERY large degree of suspect and cynicism.

    The statics represented in this article are not reflected in other more “impartial” data sources. Regarding “generation” and capacity utilization.

    I have been a avid reader of Michael Pettis over the years. Some years ago he wrote an article that China has no intention of mothballing the coal fire generation, simply put TPTB cannot afford to.

    http://carnegieendowment.org/chinafinancialmarkets

  10. lracine Says:

    According to the EIA (US Energy Information Administration), China’s current Coal Fired Electrical Generation (not CAPACITY) was in 2015 approximately 72%.

    If you look at the projection in the link below, you will see that the “reduction” in “electrical generation from coal” to 47% in 2040, is not realized via curtailing or shutting down existing coal fired plants but in adding “alternative” forms of electrical generation.

    https://www.eia.gov/todayinenergy/detail.php?id=33092

    World Bank and IEA both have similar numbers.

    • indy222 Says:

      yes, exactly! So what’s proposed is not actually cutting absolute emissions, it’s only cutting relative emissions. When you factor in China’s growth rate, you don’t get actual emissions reductions like you think. People rather thoughtlessly hear “Reduction in coal fraction to only 47% by 2040! Hooray and we’re ON our WAY!!”, when the truth is – we’re on our way to Hell in a Handbasket.


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