New Coal Power Projects Declining- But Is This The End Of Coal?

By Paul Homewood

 

A new report has found that the number of coal-fired power plants around the globe is in steep decline. The research was conducted by the Global Energy Monitor, Greenpeace India and the Sierra Club who say there was a 20 percent drop in newly commissioned coal power capacity between 2017 and 2018. As well as that, pre-construction activity and new construction starts also fell 24 and 39 percent respectively. Since 2015, the number of newly-completed plants fell 53 percent while new constuction starts plummeted 84 percent.
The following infographic visualizes the decline across the world with planned capacity in pre-construction status falling from 1,090 GW in 2015 to just 339 GW last year. The biggest drops were seen in India and China with the latter planning 515 GW of new coal capacity in late 2015. That has now declined 86 percent, falling to just 70 GW. In India, the trend is similar with pre-construction dclining from 218 GW in 2015 to 36 GW in 2018, a fall of 83 percent.
Even though the planning trend is positive, there is some negative news in Asia where new construction of coal power plants increased 12 percent in China between 2017 and 2018. This is primarily due to work resuming on 50 GW of coal power capacity which had been postponed by the central government. The United States leads the way in decommissioning older coal plants with retired capacity in 2018 totalling 17.6 GW. That’s the second highest year on record after 2015 when 21 GW was taken out of service. 50.2 GW of new coal capacity was commissioned globally in 2018 while retirements totalled 31 GW. As positive as trends in pre-construction are, the report warns that global climate goals cannot be reached without a full halt in new coal plants and the retirement of existing ones.

https://www.statista.com/chart/17519/pre-construction-coal-power-capacity-in-development-worldwide/

 

There is a lot of excitement among greenies about a new report suggesting that new coal power projects are declining rapidly. There is an assumption that this is related to the Paris climate targets.

But, as is often the case, bald statistics can be misleading.

Most of the drop claimed comes from China and India, so I will focus on the former today, and look at India tomorrow.

https://endcoal.org/wp-content/uploads/2019/03/BoomAndBust_2019_r6.pdf

 

The first thing to note is that the pre-construction figures include three categories:

•  Announced: Projects that have appeared in corporate or governmental planning documents but have not yet moved actively forward by applying for permits or seeking land, coal, or financing
• Pre-permit development: Projects that have actively moved forward in one or more of the following ways: applying for environmental permits, acquiring land, acquiring coal, acquiring water rights, acquiring transmission arrangements, or securing financing.
• Permitted: Projects that have secured all environmental permits but have not broken ground.

In reality, the only ones of any significance are Permitted, as many projects prior to that stage are cancelled for all sorts of reasons. Permitted schemes have dropped from 174 GW in 2017 to 122 GW last year.

Most of this drop has occurred in China, and the reasons are obvious, as the report highlights:

There was an explosion of permits in 2015, the result of devolving decisions to the provinces. Given that this created far too much capacity, the central government took action to rein back in new permits, until things came back into balance. As the report explains though, half of the “suspended” projects appear to be back under construction:

Worse still for anybody hoping that China was busily abandoning coal power is this bit of news:

 

The CEC may not get all of the extra capacity they want, but they are the experts tasked with ensuring China gets all the power its growing economy is going to need.

Indeed, when we look at what is under construction worldwide, we find that capacity has risen since 2017, mainly in China:

And new coal power capacity in China has been added at fairly consistent amounts since 2010. There is no evidence of any tail off:

 

https://chinaenergyportal.org/en/2011-detailed-electricity-statistics/

 

Currently, coal power capacity is about 1020 GW, so a target of 1300 GW by 2030 would imply net additions to capacity of 23 GW a year. Given that some older plants will inevitably retire, new capacity added will need to be higher.

According to the report, China has added 864 GW of new coal power capacity since 2000, and with another 280 GW is due by 2030, nearly all of China’s coal capacity will be less than 30 years old by 2030, and will be modern, highly efficient plants. It is inconceivable that they will be prematurely shuttered, and are all likely to be operating well into the 2050s and beyond.

In addition to building its own coal plants, China is also busy constructing and financing new coal power stations around the world. The report claims that it is financing one quarter of all global coal power capacity under development outside China, mainly through its state-owned entities (SOEs).

 

 

Greenpeace’s hopes that the recent global decline in coal projects heralds the end of coal are, I suspect, rather premature!

 

 

The report by Global Energy Monitor, Greenpeace India and the Sierra Club, Boom and Bust 2019, is available here.