Covid-19 Recovery: China Fires Up Coal Power Plant Construction

  • Date: 10/05/20
  • Nikkei Asian Review

Surge in first-quarter approvals possibly related to COVID-19 outbreak

Beijing is expected to focus on investing in infrastructure like coal power generation as it tries to restart the economy in the aftermath of the coronavirus outbreak.   © Reuters

China approved nearly 10 gigawatts of new coal-fired power generation projects in the first quarter, roughly equal to the amount approved for all of last year, amid a broader scramble to jump-start an economy hobbled by the COVID-19 epidemic.

Investment in infrastructure like power generation has played an important part in China’s rapid economic rise, especially in times of economic distress like the global financial crisis of 2008 and 2009. Many expect such spending to play an important role as Beijing tries to restart the economy in the aftermath of the coronavirus outbreak that has brought activity to a crawl, causing the economy to post its first quarterly contraction since modern record-keeping began.

Coal has always been a controversial part of the nation’s power mix. On the one hand, China has plentiful supply of the resource, which it has harnessed to rapidly build up power infrastructure to feed the country’s growing economy. But such energy is notoriously dirty, and overly aggressive building led to oversupply earlier this decade that sent many producers into the red.

Those factors led the government to scale back and even halt many new coal-powered projects in recent years. But that trend went into reverse in the first quarter, when six major new coal-fired projects were approved that could add 9.96 GW of capacity, according to calculations by Caixin.

That was roughly equal to the amount of similar new power projects approved for all of last year. Of the new projects, four were in the coal-rich area of Shaanxi province, one was in South China’s Guangdong Province and one was in Inner Mongolia.

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