Unveiling China's Coal Power Stations and the Intricate Emission Manipulation Strategy
China's civil war era saw a significant embrace of coal by the Chinese Communist Party, with the mineral becoming intertwined with communist legitimacy and modernization. However, China's coal boom faces numerous challenges that impact its energy security, domestic economy, and environment in complex ways.
Energy Security and Market Dynamics
Despite continued construction of new coal power capacity, the growth of coal power generation is flattening. Coal power utilisation rates are expected to fall sharply in the next few years due to the displacement by renewables such as wind and solar. The government is implementing inspections and regulatory actions to curb excessive coal production, aiming to correct a distorted market and "involutionary competition," where producers increase output despite falling prices.
Coal's heavy usage, often beyond optimal levels, contributes to inefficient electricity pricing and complicates the reliability and transition of the electricity system. Policymakers face the challenge of coordinating grid operations and market mechanisms to enable coal's transition from primary baseload to a supporting role while allowing renewables to lead.
Economic Impacts
The coal oversupply and low prices pressure coal-producing companies economically, eroding profitability and causing industry instability. The excessive production, despite signals of market saturation, threatens broader economic health through deflationary pressures and risks in the industrial sector. The coal boom's continued investment and operational expansion are adding friction to China's energy transition, potentially delaying cleaner energy development pathways.
Environmental Concerns
China remains the largest source of coal mine methane emissions globally. Proposed new coal capacity is very large, with 60% of global proposed coal mine capacity located in China. This extensive coal expansion threatens to increase methane emissions and reverse recent declines in coal-related pollution and greenhouse gases. The ongoing coal use and mine expansion contribute to local and global environmental damage, including air pollution and climate change impacts.
Outlook
While coal demand is expected to peak soon, China's coal capacity and production still appear to expand in the short term before a gradual decline aligned with cleaner energy goals. The government's 15th five-year plan will be critical in determining whether China enforces measurable coal phase-down targets or allows coal to continue playing a disproportionate role in the energy mix.
Traditional Practices and Transition
Traditional methods like household heating with small coal boilers have contributed to health issues. However, efforts have been made to transition away from coal. For instance, by the end of 2020, more than half of households in the Jing-Jin-Ji cluster had replaced their coal-based heating systems with natural gas.
Historically, sites like the Anyuan Coal Mine held significant political importance, serving as a site for "red pilgrims" during China's revolutionary politics. The Red Army was purportedly carried to victory in the Chinese civil war thanks to the efforts of industrial and mining workers, especially in the coal industry.
In summary, China's coal boom presents a paradox: it provides near-term energy security through abundant supply but drives economic inefficiencies and environmental harm. Coordinated policy and market reforms are essential to address these intertwined challenges effectively.
- China's significant investment in the construction of new coal power capacity faces the challenge of being displaced by the rising usage of renewable energy such as wind and solar.
- The continued growth of the Chinese coal industry and its heavy usage contributes to environmental concerns, making China the largest source of coal mine methane emissions globally.
- The impacts of China's coal boom extend to its economy, as the coal oversupply and low prices pressure coal-producing companies economically, potentially delaying cleaner energy development pathways.
- The government's future actions, outlined in the 15th five-year plan, will be crucial in determining whether China enforces measurable coal phase-down targets or allows coal to continue playing a disproportionate role in the energy mix, affecting both the country's energy security and its effort to mitigate climate change.
