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China’s 2020 coal plant newbuild more than offset retirements for rest of world: report

14 April 2021

The coal-fired power plants built in China in 2020 exceeded capacity taken offline in the rest of the world, a new report says.

China added 38.4 GW of coal-fired power capacity, slightly more than the 37.8 GW of coal plants mothballed in all other countries. The increase marks the first net expansion of the global coal fleet since 2015—even as countries like the US get more aggressive about moving to lower-carbon energy.

The data was released 5 April in the 2021 edition of "Boom and Bust," an annual report that tracks the state of the global coal industry, from environmental group Global Energy Monitor (GEM) and its partners.

Despite the overall increase, GEM remained upbeat on the longer-term trend of decline that coal plants are charting worldwide. It said the decisions to stop using coal plants have accelerated as countries and companies carry out plans to take fossil fuels like coal out of the global power system, in keeping with worldwide efforts such as the Paris climate accord.

"In 2020, we saw country after country make announcements to cut the amount of coal power in their future energy plans," said Christine Shearer, who directs the GEM coal program. The world's in-progress coal plant developments are "very likely" the last such plants in the future, Shearer said.

China's outlier status is partly explained by one-off policy exceptions in response to economic shocks from the COVID-19 pandemic. Provincial governments loosened restrictions on new plant permits in order to stimulate investment, while China's central government increased lending for large coal projects. In other words, China's coal gains in 2020 resulted because, not in spite of, the economic tumult of the global pandemic, the report said.

China's net coal additions are all the more striking when compared with trends across the broader Asia region. Last year brought a "collapse of the coal plant pipeline in south and southeast Asia," the report said. Three factors -- cratering electricity demand, general economic contraction, and increasingly difficult financing -- all hindered Asian coal build outside China.

The report found that an aggregate 62.0 GW of coal capacity was canceled, or is set to be canceled, across the countries of Bangladesh, Indonesia, the Philippines, and Vietnam.

James Stevenson, senior director of IHS Markit's Coal, Metals, and Mining practice, noted that the net addition of global coal capacity in 2020 belies longer-term decline trends. "The trajectory is down," Stevenson said, even when accounting for China's robust coal build last year. "We expect a decline in China, eventually."

For the US, and further back than just 2020, the GEM report found that the sector's capacity declined in spite of promises by former US President Donald Trump to revive the long-ailing industry. Trump's tenure as president spanned 2016-2020, and he won the 2016 election after campaign promises to support US coal and related jobs.

More coal capacity was decommissioned under Trump than under former President Barack Obama, the report said, with totals of 52.4 GW and 48.9 GW, respectively. "President Trump's promised coal boom was a bust," the report said.

Current President Joe Biden, who has pledged to decarbonize the US power system by 2035, will need to accelerate today's rate of coal plant retirement. Currently, only one-third of total US coal capacity is expected to retire by 2035 without more ambitious government policy, the report said.

By Will Fleeson, IHS Markit senior research analyst

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