Why Is China Building 1000 New Coal Power Plants? Here’s Why

  • Date: 08/04/16
  • Lucy Hornby, Financial Times

China’s proposed investments in long-distance, ultra-high voltage (UHV) power transmission lines will pave the way for power exports as far as Germany, the head of the national power grid said on Tuesday as he launched an initiative for cross-border power connections.

Exporting power to central Asia and beyond falls into China’s “one belt, one road” ambitions to export industrial overcapacity and engineering expertise as it faces slowing growth at home. The plan would allow enormous hydropower dams, coal-fired power plants and wind farms in frontier regions such as Xinjiang to sell into higher-priced markets overseas. The “belt” refers to the land route from Asia to Europe, while the “road”, curiously, refers to the sea route via the Indian Ocean.

Talk of exporting power is a reversal for China, which as recently as 2004 suffered rolling blackouts across its manufacturing heartland. But huge investments in power in the decade since, and the construction of a number of dams, nuclear reactors and coal-fired plants due to begin operating in the next 10 years, mean the country faces a growing surplus.

Liu Zhenya, chairman of State Grid, told reporters that wind and thermal power produced in Xinjiang could reach Germany at half the current cost of electricity there. “There are so many resources, but no market. We need to find it externally.”

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