China to expand its fleet of coal power plants by 10%

  • Date: 16/12/20
  • Bloomberg

Chinese state-owned utilities are betting on coal’s longevity by building new coal-fired power plants, with their fleets set to expand about 10% by 2025. 

Workers sort coal near a mine in Datong, in China’s northern Shanxi province, in November 2015. | AFP-JIJI

The future of coal looks like an ice cream truck parked half a kilometer down a mine shaft in China’s Shanxi province. The yellow and white vehicle is equipped with a 5G router from Huawei Technologies Co. to gather data for the mine’s control center, where technicians monitor high-definition feeds on a screen the size of a two-story house. They’re tracking temperature and methane concentrations while keeping watch over the black lumps zipping along conveyor belts on the way up to waiting trucks.

The data collection would previously have been done by workers down in the pit, but Yangquan Coal Industry Group has managed to eliminate some of those workers and virtualize the least appealing aspect of mine labor. “It will take time, but in the future, miners will wear suits and white shirts,” says Han Weihai, manager of Huawei’s mine projects in Shanxi. “People no longer want to work in a mine, especially young people with college degrees.”

When President Xi Jinping announced in September that China would be carbon-neutral by 2060, he gave coal a four-decade transition period. Or even longer, perhaps, if China’s vast and politically powerful coal industry can find a way to capture the planet-warming pollution generated by burning the fuel, or find other ways around the national policy.

The long transition buys China time to use up its vast coal resources and figure out how to gradually shut down an industry that still employs, directly and indirectly, tens of millions of people. Nowhere shows this high-tech trajectory for China’s coal sector better than the Xinyuan mine.

Next-generation mining jobs there pay as much as 100,000 yuan ($15,000) a year. That’s more than miners of previous generations could have dreamed of making, and for some workers, that’s for sitting behind a desk in a college campus-like facility with a basketball court, pingpong tables and a library. The company organizes outdoor movie nights in the summer and running races in the spring and autumn.

The operation produces about 2.4 million tons of coal a year, less than a tenth of a percent of China’s current demand. That much coal could generate as much as 5 million metric tons of carbon dioxide when it’s burned, even as Xinyuan employs emissions-reducing techniques such as using methane instead of coal in its boilers.

Coal’s long exit is part of a two-speed approach proposed by climate scientists at Tsinghua University. Citing the inertia of energy and economic systems, they proposed allowing coal power plants to continue being built until around 2030, when China will be richer and replacement technologies will have advanced. Then the plan calls for the ongoing transition to solar and nuclear to accelerate sharply.

Easing off coal slowly would reduce abrupt shocks that risk bringing unrest, the Communist Party’s biggest nightmare, by dulling the inevitable pain to China’s army of coal workers. “The industry will cut jobs, but it should be slow and gradual,” says Wang Haigang, Xinyuan’s deputy general manager. His mine had 3,000 workers in 2012, and by 2025 plans to have fewer than 1,000. “It may take a long time, but we’re aiming for a future in which no workers need to work underground.”

Keeping coal alive while reducing the number of miners may also solve a further headache for China, where climate policies governing 1.4 billion people are planned in Beijing but have to be implemented by dozens of local governments. The central government has long struggled with the question of how to get local officials to embrace plans for restructuring industries that many of those officials rely on for income.

New mining technology will allow provincial governments to keep earning money that could be used to develop post-coal industries. That’s happening in Jinzhong, the city above the Xinyuan mine, which in 2018 invested 11.5 billion yuan ($1.8 billion) in a medical research center, an industrial park for logistics companies, and other major projects.

The Shanghai Waigaoqiao Power Generator Company coal power plant | AFP-JIJI
The Shanghai Waigaoqiao Power Generator Company coal power plant | AFP-JIJI

Chinese state-owned utilities are betting on coal’s longevity by building new coal-fired power plants, with their fleets set to expand about 10% by 2025. Just last year, China opened the $30 billion Haoji Railway line, a 2,000-kilometer (1,243-mile) conduit to haul 200 million tons of coal a year directly from central mining basins to energy-hungry regions in the southeast.

But the coal industry and local governments that support it may be too optimistic about the remaining timeline. China needs to stop building coal power plants immediately if it wants to meet the 2060 pledge, according to the Draworld Environment Research Center and the Centre for Research on Energy and Clean Air. That goal would require whittling China’s coal fleet down to 680 gigawatts by 2030, a reversal of the 1,300-gigawatt expansion currently planned.

Before long, an uncomfortable truth could push to the forefront: China’s national target of reaching net-zero emissions might not be compatible with another generation of coal.

The climate researchers and the coal industry envision two parallel universes. In one, the use of fossil fuels is drastically reduced and China pivots quickly to renewable energy. In the other, coal is phased out slowly as new technologies are used to reduce their environmental impact.

China’s coal bosses know their regions may struggle to recover if the first scenario comes to pass. In the northeastern city of Fuxin, locals have been extracting coal since the 1700s. When the Communist Party took over in 1949, leader Mao Zedong made Fuxin central to his efforts to modernize the nation. Working the mines was an economic necessity but also a source of patriotic pride.

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