China recently issued a plan to encourage the switch to low-carbon operations by coal plants. The country also announced its plans to award preferential loan guidelines to qualified projects and diversify funding channels. The new action plan also incorporates the construction of new infrastructure and improved technologies related to carbon reduction for coal plants. This will ensure the country’s energy security during the transition to green energy.
The plan was jointly issued by the National Energy Administration as well as the National Development & Reform Commission. Its main objective is to improve financial support directed at low-carbon reformation projects, which will be encouraged to diversify their funding channels via techniques such as applying for tech transformation loans or issuing green bonds.
Preferential loan guidelines and financial support will bolster funding, with more private financing being directed toward the low-carbon reform of coal plants.
The latest data from the National Energy Administration shows that between January and May 2024, total installed power generator capacity in China hit 3.03 billion kilowatts. This represents a 14% increase based on figures recorded in the same period in 2023. Of the total figure, roughly 1.4 billion kilowatts of power were generated from coal-fired generators. This demonstrates the significant role coal plays in the east Asian country’s energy structure.
Despite the fossil fuel’s irreplaceable role, China continues to make efforts in the transition to clean energy. The country’s consumption of green energy made up 26.4% of overall energy consumed, which was 11% higher than overall energy consumed a decade ago.
The action plan highlights that by 2025, China plans to have begun construction of the first group of low-carbon transformation projects. By this time, the country expects that carbon emissions from these projects will have decreased by almost 20% as compared to 2023 figures.
By 2027, the country plans to further expand the low-carbon power generation tech pathway, with considerable reductions in operating and construction costs. It is expected that by then, carbon emissions will have recorded a decline of roughly 50% from figures recorded in 2023.
Professor Cong Yi, who lectures at the Tianjin School of Administration, stated in a recent interview that low-carbon transmission of power generated from coal needed to begin in fields such as electricity transmission, carbon capture and thermal efficiency utilization. Cong added that low-carbon transformation would make the green-energy transition in the country a more moderate and smooth process.
Currently, China remains the largest annual greenhouse-gas emitter, having emitted 27% of total global greenhouse-gas emissions in 2020.
The low-carbon reforms that China is planning could result in coal plants elsewhere that are supplied by firms such as Peabody Energy Corporation (NYSE: BTU) also adopting similar changes in order to reduce their emissions and stay in business.
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