China is the largest builder in the world for coal-fired power stations. It seems that a sea of great change is underway in its policy. The permits granted for new coal power plants in the first half of 2024 fell by almost 80%, according to a report from Greenpeace East Asia. This steep drawdown set tongues wagging if China had reached a point of climactic resolve in reconciling energy security with environment protection.
For the first time ever in China’s history, the capacity to generate wind and solar energy together, now standing at 11.8 terawatts, has outstripped the country’s capacity in coal, pegged at 11.7 terawatts. Renewable energy accounted for a stunning 84.2% of all new grid-connected capacity in the first half of 2024, marking a rising domination of clean energy in China’s mix of new power generation. Even during this transition period, however, 14 new coal plants of a cumulative 10.3 GW of power were commissioned in China. That is a 79.3 percent decrease in the rate of additions of coal plants over a similar period in 2023 and underscores the changing nature of energy in that nation.
Remarkable is the drop in new coal plant permits for a country that until now has been very reliant on coal to meet demand for the generation of electricity. China, up until this point—one of the world’s largest emitters of carbon dioxide, so every baby step it takes with its energy policy—has been dissected for impacts on a globe. Now it is really going to make a world of difference, not only in the future of China but also in international climate goals by slowing coal development.
But Gao Yuhe, a project leader at Greenpeace East Asia, read between the lines of the tone shift while cautioning in another direction about what it all meant over the long haul. “Wind and solar expansion has been strong as coal building slows, but it’s unclear what the slowdown means for the future of coal,” Gao said. Such caution betrays a sense of doubt that the decline in coal approvals represents a kind of strategic rethink or is just a temporary lull.
Gao raised some critical questions in regard to the underpinnings of this reduction in coal permits: ”Are Chinese provinces slowing down coal approvals because they’ve already approved so many coal projects during this five-year plan period? Or are these the last gasps of coal power in an energy transition that has seen coal become increasingly impractical?” Only time will tell.
Renewables on the Rise
One major reason for this drastic dip in coal plant approvals is the rising share of renewables. Rapid growth in wind and solar all over the country is supported by huge government force and decreasing technology costs. By the first half of 2024, combined wind and solar outstripped coal capacity for the first time, marking a significant milestone in China’s energy transition.
Researchers at the Helsinki-based Center for Research on Energy and Clean Air (CREA), on the other hand, found that carbon pollution from the Asian powerhouse had likely already peaked in 2023 with emissions falling by 1% year on year in Q2 2024. That is the first quarterly contraction of the economy since the COVID pandemic and adds to the growing evidence that the country is approaching a lower-carbon future.
However, coal still has a gargantuan role in China’s energy system. The government sees coal plants as necessary for grid stability during peak demand periods. For example, record heatwaves in July 2024 pushed the grid to its limits, requiring additional power from coal plants to avert blackouts. The NDRC continues to reinforce that coal is an important back-up source of energy to fall on when renewables are low.
Challenges and Opportunities Ahead
Although a slowdown on approving more coal plants is good news for clean energy doers, this isn’t by any measure equivalent to a clean policy pivot for China. Greenpeace East Asia has advised the Chinese government to invest in grid infrastructure, which allows for full integration of the growing fleet of wind and solar plants. Without that improved grid connectivity, most of the potential energy generated by renewables could end up being wasted, reducing the impact of China’s clean energy shift.
On the other hand, the future of Chinese coal dependency emerges very questionable. A dramatic drop in new permits for coal plants may suggest that China is coming to the end of that dependency or at least a dramatic slowdown in new coal investments. Equally, this slow down could be a short-term reaction to overcapacity or some other market factor, and new investment in coal may well resume at some point in the future.
There has not been any comment from NDRC about the meaning of the reduction in coal permits on the big picture of China’s strategy about energy. The whole world is watchful to see the next moves it will make, which seem to be a crucial measure of what it means—the one-off occurrence in the reduction of coal plant approvals or the beginning of a sustained shift to a cleaner and greener energy future.
Conclusion
As China cuts new permits for coal power plants nearly by 80% in the first half of 2024, this is looked at as a serious development in its energy landscape. This, teamed with fast-rising renewables, may mean that China is slowly leaving behind coal. The longer-term impact remains to be seen, with grid stability, provincial policies, and future energy needs very much in play. Whether this means this announcement signals the long and definitive shift to cleaner energy or just a pause in the development of coal, global implications are profound.