- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.

Over the last three decades, China’s remarkable economic growth has elevated its status to that of one of the world’s leading economic powers. This economic miracle has brought major challenges to its economy, in particular to China’s energy industry, and subsequently, China has become one of the largest energy consumers and carbon emitters in the world. According to Bloomberg’s New Energy Finance report, to meet China’s increasing energy demand, it plans to build one new coal-fired power plant every week up to 2020.   

China currently consumes approximately one fourth of the world’s primary energy consumption and almost half of the world’s coal. Coal, primarily used for power generation and commercial heat, has seen a rise over the last 40 years particularly in the country’s iron and steel industry.

The motivation for China’s preference for exploiting coal over other sources lies in the fact that coal is widely distributed across the country, is logistically easier to move and its production and trade is not as dependent on geopolitical developments around the world. Due to economies of scale as well as years of expertise gained in coal-fired power generation, China’s coal power plants have become advantageous in enabling Chinese companies to become more competitive through the lowering of their energy bills.

Despite the International Energy Agency’s (IEA) forecasting that the share of coal in the global energy mix peaked back in 2011, and that its share in the energy mix will decrease from 41 percent in 2013 to 36 percent in 2021, the eradication of coal consumption is unlikely to end overnight but will possibly slow down due to technological improvements and innovation obtained in recent years in coal-fired power generation. 

Given the difficulties in accessing natural gas and problems in providing the consistent free flow of renewable energy, China is likely to continue to remain one of the largest coal consumers in the short to medium term. According to the IEA’s projections, in the coming years, China will account for 45 percent of coal production and 50 percent of coal demand. China ranks third after Russia and the U.S. as having the world’s largest total recoverable coal reserves. In 2016, China produced as much as 3.242 million tonnes.

The Chinese government took various measures in recent years to ease energy consumption per unit of GDP. One such measure is the Top-1,000 Enterprises Energy Savings Program aimed at reducing the share of energy consumption in the steel, cement and petrochemicals sectors. Additionally, Chinese authorities set an annual growth rate of 6.5 percent in the 13th five-year plan, covering 2016 to 2020. Considering China’s growth rate was around 9 to 10 percent in the last three decades, lowering growth projections in the coming years can be interpreted as China’s “new normal”.

Following the years of worsening air quality, Chinese citizens have begun to demand better air quality through immediate action in implementing policies, which has also become a priority for Chinese authorities. The main state planner, the National Development and Reform Commission, has been implementing stringent guidelines in domestic mine production with the aim of decommissioning obsolete infrastructure, improving the crippling mine safety records and blocking companies entering the mining industry unless the highest safety measures are taken, thus improving production quality.

Coal-fired power plants are classified into three categories; conventional power plants known as subcritical, super-critical runs with higher capacity with less coal and the most efficient being the ultra-super critical plants.

China has been heavily investing in its power generation as part of its economic revitalization program to move towards the creation of superior capacity with lower coal consumption. China’s coal-fired power plants are more advanced in comparison with many other developed countries, such as the U.S. Currently, out of the top 100 power generating coal-fired plants in China, 92 are supercritical and the remaining are ultra-supercritical, whereas the U.S.’ top 100 most efficient coal-fired power plants are less in number compared to China, with 69 being super critical and 30 subcritical. China’s fleet uses more advanced technology thanks to the recent climate change policy measures and actions aimed at changing the structure of China’s economy from a manufacturing-dominated one to a service-based economy.

China added new capacity to its fleet in 2015. As a sign of the country’s determination to improve overall air quality and upgrade the efficiency of power generation, within the newly developed capacity of over 50,000 megawatts, 48 percent comprised of ultra-supercritical.

To address carbon pollution, the Chinese government set new efficiency standards for coal-fired power plants, and should these necessary requirements not be met, these plants will be faced with closure. In addition, a limit imposed on the industry to operate only 276 days per year was not positively received by the industry and followed by the doubling of coal prices. Consequently, coal production dropped by approximately 8 percent resulting in authorities deciding to revert to the number of operation days to its previous level of 330 days per year. However, this does not mean China plans to eradicate its coal power generation in the coming years.

While renewable energy sources, nuclear energy and natural gas may contribute to overall power generation, capacity from coal-fired power plants could reduce. However, technological improvements in coal-fired power generation with the introduction of the supercritical and ultra-supercritical power plants along with retiring older and inefficient power plants could see that high levels of power generation in China from coal remains but possibly with less coal consumption.

China’s coal industry has benefited from the transformation arising from new technologies and innovation and has chosen to improve overall efficiency levels in its coal-fired power plants to tackle the increasingly degraded air quality. And this has been done through the construction of ultra-supercritical and supercritical technology. Coal, as a strategic energy resource, could keep its share of China’s energy mix in the years to come since alternative technologies have not yet reached a sufficient capacity to replace coal.

Given that China is greening its coal fleet by heavily investing in ultra-supercritical and supercritical technology, Chinese authorities have made a strategic choice by transitioning from an economy based on heavy industry to an economy driven by technology and innovation. 

- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.