LONDON, March 22 (Reuters) - Construction of new coal plants fell sharply last year due to a clampdown on projects in China and less finance available in India, a report by three environmental groups said on Wednesday.
By January this year, there was 570 gigawatts (GW) of coal power capacity in the pre-construction planning stage, down from 1,090 GW in January 2016, said the report by Greenpeace, U.S. group the Sierra Club and coal research group CoalSwarm.
Projects under construction amounted to around 273 GW, 19 percent lower than in Jan. 2016, and those put on hold surged by 164 percent to 607 GW from 230 GW.
“Globally, more construction is now frozen than entering construction in the past year ... The main cause of the shrinkage in the coal plant pipeline was the imposition of unprecedented and far-reaching restrictive measures by China’s central government,” the report said.
To tackle air pollution and curb excess supply, China has pledged to close 800 million tonnes of outdated coal capacity by 2020. It has already exceeded its 2016 goal to eliminate 250 million tonnes of coal capacity.
Over 300 GW of Chinese projects in various stages of development have been put on hold until after 2020, including 55 GW already under construction, the report said.
India also experienced a slowdown in coal plant development due to the unwillingness of banks and other financiers to provide more funds, it added.
The International Energy Agency (IEA) said in December that growth in coal demand globally would slow over the next five years due to lower consumption in China and the United States and as renewable energy sources gained ground.
India, however, would see the fastest increase in demand, with IEA forecasting an average annual growth rate there of 5 percent by 2021.
Benjamin Sporton, chief executive of the World Coal Association, said the development of energy infrastructure was complex, particularly for big projects like coal plants.
“Realistically, until a project breaks ground it should not come as huge surprise if plans do not go ahead,” he said. (Reporting by Nina Chestney; Editing by Susan Fenton)
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