China’s energy crisis sees the world’s top emitter investing in more coal

Two months of scorching heatwaves and drought plunged China into an energy security crisis.

The energy crisis has seen Beijing shift its political discourse and proclaim energy security as a more urgent national mission than the green energy transition. Now, the government is investing in a new wave of coal-fired power stations to try to meet demand.

In the first quarter of 2022 alone, China approved 8.63 gigawatts of new coal plants and, in May, announced C¥ 10 billion (A$2.1 billion) of investment in coal power generation. What’s more, it will expand the capacity of a number of coal mines to ensure domestic supply.

Over 33 gigawatts of coal power generation, including at least 43 new power plants and 18 new blast furnaces, started construction in China in 2021. This is the highest level since 2016 and almost three times the rest of the world combined.

Then, in 2022, we witnessed the international coal market skyrocket as geopolitical tension from Russia’s invasion of Ukraine and economic recovery from the pandemic boosted global demand. Beijing, in turn, increased domestic coal production with double-digit growth in the first half of 2022.

The current energy crisis is not only an unintended consequence of the drought, but also a result of its long-term net-zero emissions goal. Increased coal import costs and rash control of domestic coal production put China’s energy supply in question, and renewable energy wasn’t ready to fill the gap.

To date, China has 1,074 gigawatts of coal power in operation, but more than 150 gigawatts of new plants have either been announced or permitted.

The China Electricity Council—the industry group for China’s power sector—recommends the country reaches 1,300 gigawatts of coal-fired power in 2030 to meet the rising demand and strengthen energy security. If this occurs, it would see more than 300 new plants built.