As set out in the 13th Five-Year-Plan for Energy of China, the government steps in and cancels the permitting as well as the construction process of coal-fired power plants across the country.

© SGCC, Azure International

The construction of 30 coal-fired power plants has recently been stopped in China. This move shows that Chinese authorities take the overcapacity issue serious now. Those plants in question have a combined capacity of 17 GW. Another 30 large coal plant projects, which are still in the development phase, have also been halted. For those the high-voltage transmission lines from the west of China to the load centers in the east have already been under construction however. Figure 1 shows the affected coal-fired power plant projects.

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Figure 1: Coal-fired power plant projects affected by the stop policy (Source: Greenpeace)

The interference of the Chinese government in those projects means that major losses have to be borne by several players. However, spending money on those coal-fired power plants which are not needed would have been more expensive and cost up to USD 20 billion.

One of the reasons of the Chinese government to step in is also to reign into the carbon-intensive power production. Current research indicates that if those plants would have been built, the Chinese carbon budget would be used up by 2036. That is also why in April roughly 100 GW of coal projects in the permitting stage have been axed.

It seems as if the Chinese government is increasingly trying to tackle the problem of conventional overcapacities and implements the first steps towards a solution.