A recently released report from the Center for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) has revealed that despite global efforts to decarbonize, China is moving forward with coal energy. The report shows that China is quickly approving and erecting new coal-fired power plants amid a global climate-change crisis and in spite of the country’s own promises to step away from coal.
China approved an average of two new coal-fired power plants per week in 2022, undermining the country’s coal promises and underscoring its increasing reliance on coal for energy generation. GEM research analyst Flora Champenois stated that China’s actions were a contradiction to the global decline of power generation using coal.
Although the energy source played a crucial role in the industrialization of most of the world, decades’ worth of research has revealed that it was also instrumental in heating up the atmosphere and accelerating climate change.
Champenois noted that China has approved new coal power plants with astonishing speed, explaining that new projects are beginning, gaining permits, obtaining capital and breaking ground in months.
China is currently responsible for close to 30% of the world’s carbon emissions, and the country produces two times more emissions than the United States. The Asian country approved new projects worth 106 gigawatts of capacity in 82 different sites throughout 2022, quadrupling the amount of capacity that received approval in 2021.
Leaders of countries around the world were forced to look to alternative energy sources last year after an incredible heat wave and drought impacted hydropower generation facilities and caused power shortages. Since hydropower generation is the second-largest source of energy in China, reduced output forced power generators to fire up coal-power plants to make up for the shortfall.
Coal consumption increased throughout the year and peaked in August when power plants burnt through 8.16 million tons of thermal coal daily.
The country’s reliance on coal increased from 2021 to 2022 when coal power generation increased by 22% and accounted for 69% of China’s total energy mix. Coal-fired electricity accounted for 67.4% of the total power supply in 2021, and even though authorities shut down hundreds of coal mines, the remaining ones were instructed to produce as much coal as possible due to countrywide energy shortages.
On the other hand, China added around 125 gigawatts of wind and solar capacity in 2022, bringing the total share of renewables to only 2%. The report noted that while the increase was noteworthy, it would not be enough to supply energy demand growth without the help of fossil fuels. If China is to truly reduce its carbon emissions, the report asserts, it would have to start phasing out its “vast coal power plant fleet” instead of growing it.
Looking at things from China’s perspective, it is a tough choice not to ramp up coal production when the country is staring an energy crisis in the face. Hard decisions have to be made, which is why it isn’t surprising that the revenues of coal companies elsewhere, including Warrior Met Coal Inc. (NYSE: HCC), are seeing an uptick at this time when global energy supply chains are under immense strain.
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