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Coal power overcapacity and investment bubble in China during 2015–2020

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Listed:
  • Yuan, Jiahai
  • Li, Peng
  • Wang, Yang
  • Liu, Qian
  • Shen, Xinyi
  • Zhang, Kai
  • Dong, Liansai

Abstract

Electricity consumption growth in China has experienced radical adjustment from high speed to medium speed with the advent of new economy normal. However, the investment enthusiasm on coal power remains unabated and leads to continuous operation efficiency deterioration in recent years. In this paper, we quantify the rational capacity and potential investment of coal power in China during the 13th FYP period (2016–2020). By employing power planning model and fully considering the power sector's contribution in the 15% non-fossil primary energy supply target by 2020, we estimate that the reasonable capacity addition space of coal power ranges between 50GW and 100GW, depending on the expected range of demand growth. We find that if all the coal power projects submitted for Environmental Impact Assessment (EIA) approval were put into operation in 2020, capacity excess would reach 200GW. Such huge overcapacity will bring forth disastrous consequences, including enormous investment waste, poor economic performance of generators and more importantly, delay of low-carbon energy transition. Finally, policy recommendations are proposed to address this issue.

Suggested Citation

  • Yuan, Jiahai & Li, Peng & Wang, Yang & Liu, Qian & Shen, Xinyi & Zhang, Kai & Dong, Liansai, 2016. "Coal power overcapacity and investment bubble in China during 2015–2020," Energy Policy, Elsevier, vol. 97(C), pages 136-144.
    • Handle: RePEc:eee:enepol:v:97:y:2016:i:c:p:136-144
    DOI: 10.1016/j.enpol.2016.07.009
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    References listed on IDEAS

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    1. Jiahai Yuan & Qi Lei & Minpeng Xiong & Jingsheng Guo & Changhong Zhao, 2014. "Scenario-Based Analysis on Water Resources Implication of Coal Power in Western China," Sustainability, MDPI, vol. 6(10), pages 1-26, October.
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    3. Zhou, Nan & Fridley, David & Khanna, Nina Zheng & Ke, Jing & McNeil, Michael & Levine, Mark, 2013. "China's energy and emissions outlook to 2050: Perspectives from bottom-up energy end-use model," Energy Policy, Elsevier, vol. 53(C), pages 51-62.
    4. Hu, Zhaoguang & Wen, Quan & Wang, Jianhui & Tan, Xiandong & Nezhad, Hameed & Shan, Baoguo & Han, Xinyang, 2010. "Integrated resource strategic planning in China," Energy Policy, Elsevier, vol. 38(8), pages 4635-4642, August.
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