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China to cap coal at 55 percent of total power output by 2020: NEA
November 7, 2016 / 7:01 AM / in a year

China to cap coal at 55 percent of total power output by 2020: NEA

BEIJING (Reuters) - China aims to cap coal-fired power capacity at 1,100 gigawatts by 2020, higher than the current ceiling but accounting for less of the country’s total power supply, as the top global energy market seeks to increase the use of cleaner renewable fuels.

A driver gets off a loading vehicle at local businessman Sun Meng's small coal depot near a coal mine of the state-owned Longmay Group on the outskirts of Jixi, in Heilongjiang province, China, October 23, 2015. REUTERS/Jason Lee/File Photo - RTX2RGUI

Announcing its five-year plan for the power industry, the National Energy Administration (NEA) on Monday said China aimed to have 2,000 gigawatts of electricity generating capacity by 2020, of which at least 320 gigawatts, or 16 percent, would come from solar and wind power and 110 gigawatts from natural gas.

That would bring China much more in line with current power generation mixes in the United States and the European Union, where installed renewable capacity - excluding hydro-power - stands at around 22 percent and 10 percent, respectively.

As part of its long-term plan to shift to clean power, the NEA said China will eliminate or delay at least 150 gigawatts (GW) of coal-fired power projects between 2016 and 2020.

While the new ceiling for coal is up from 960 GW in a previous five-year plan for the period to 2015, it will bring down coal’s share in China’s total power mix to more than 50 percent from over two-thirds.

“It is not easy to cap coal power capacity under 1,100 GW. If we don’t take measures, I believe the capacity will go beyond 1,250 GW,” Huang Xuenong, director of the power department under NEA, told reporters at a briefing.

Given an economic slowdown, rise in electricity consumption is expected to slow to about 3.6-4 percent over 2016 to 2020, from an annualized 12 percent in 2011, Huang said, resulting in excess capacity - mainly coal power and hydro power.

Conventional hydro power capacity will reach 340 GW by 2020, up only 6 percent from end-2015, the NEA said, indicating a surplus and a grid connection problem in the southwest.

Analysts, however, believe the planned cap for coal capacity is still quite high.

The government may have to cut the target as manufacturers shift to cleaner fuels and Beijing encourages expansion of renewables, said Zhou Dadi, vice-chair of China Energy Research Society. “We are ... seeing coal-fired power projects are being delayed in some provinces due to overall slower demand.”

“The government targeted numbers would not encourage more investment into coal-fired utilities.”

Total power consumption will reach between 6.8 trillion and 7.2 trillion kilowatt hour (KWh) by 2020, up from 5.69 trillion KWh by the end of 2015.

Reporting by Meng Meng and Beijing Monitoring Desk, additional reporting by Henning Gloystein in Singapore, writing by Josephine Mason; Editing by Himani Sarkar

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