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China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

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China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

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China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




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Boost health, well-being and prosperity – not economic growth! Updated for 2026

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Increases in gross domestic product (GDP) beyond a threshold of basic needs do not lead to further increases in well-being – this is widely supported by research. We also know that indefinite economic growth is impossible in a finite world.

Yet conventional economic growth driven by escalating material consumption remains a primary goal of government policy around the world.

If we want to see well-being and health improve, policies that promote a greener economy should be pursued. Redefining what we think of as prosperity, encouraging the consumption of green goods and services – and moving away from an emphasis on material consumption – could save governments money, as well as lead to better lives for its citizens.

GDP growth has brought with it substantial improvements on a number of fronts – from medical services to crime detection, better transport and housing and, increasingly, the adoption of renewable sources of energy.

This has helped average life expectancy to rise significantly and under-five mortality rates to fall. But well-being and life satisfaction seem to peak at low GDP, and do not increase as GDP grows.

As the graph shows (right), there is a sharp consumption cliff at low GDP, but after a threshold the affluent uplands bring no further increases in life satisfaction.

The growing costs of affluence

We wanted to understand why this is the case and work out how we can improve society’s health and well-being alongside GDP growth. Our findings were recently published in the International Journal of Environmental Health Research.

They show that material consumption brings with it unintended and costly side-effects. This means that growth that’s focused on improving health and well-being must be pursued, instead of just growth for its own sake.

The irony of increased GDP and living longer is that new health problems and associated costs have accompanied this. We have calculated the costs to health care systems and the economy that arise from modern lifestyles in the UK. (see table, right)

The direct cost of mental ill-health, dementias, obesity, physical inactivity, diabetes, loneliness and cardio-vascular disease (including strokes) is £60 billion each year. The full cost to the whole economy is approximately £180 billion annually (18.6% of GDP). The revenue expenditure of the 248 NHS Trusts in 2011-12 was £102 billion.

Clearly there are huge health savings to be made by reducing the prevalence of these conditions. Prevention is key, instead of waiting to treat conditions and diseases when they occur. This is something Britain’s chief medical officer has emphasised. She estimates that there is a 6-10% annual rate of return on investments made in early life interventions.

The policy dilemma – what’s right, or what’s expedient?

In affluent countries, some efforts have been made to shift individual behaviour toward greater well-being. But generally these have been limited in number, for example legislating for unleaded petrol and smoking bans. Or they only affect small subsets of the population – such as recommendations for regular physical activity and daily consumption of fruit and vegetables.

Policymakers face a dilemma: reducing material consumption to save the planet undermines an economy founded on continuing consumption. Yet continuing material consumption at current rates to sustain the economy is clearly costly and is destroying the planet.

Our research shows, however, that a substantial financial dividend could be released by a greener and healthier economy. Instead of encouraging material growth and consumption, we should consume in a way that is environmentally sustainable. This will not only benefit the planet, but our health and well-being too.

The UN Environment Programme defines a green economy as “resulting in human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.” There are clear health and financial benefits to promoting this.

Encouraging environmentally sustainable consumption instead of all material consumption is an important aspect of creating a green economy. This centres on activities that produces greater well-being such as healthy food, regular engagement with nature, regular physical activity, the use of the power of thought and contemplation, enhancing social bonds and increasing attachment to possessions and places.

We know that social and physical environments can promote good health, and there is growing evidence showing that behaviour at the individual level can make significant contributions to well-being.

For example, regular physical activity such as walking pushes back the onset of dementia and volunteers live longer than non-volunteers. Loneliness has been calculated to be as bad for our health as smoking 15 cigarettes a day, while eating one more fruit or vegetable a day improves health.

It is now clear that health and social inequalities prevent many people from leading healthy lives. We now need to prioritise improving well-being for all members of society by encouraging healthy lifestyles, active travel, creating liveable environments for people to enjoy and increasing social capital for all. A greener economy is a better economy. It might help save the planet too.

 

 

Jules Pretty is Professor of Environment and Society and Deputy Vice-Chancellor at the University of Essex.

This article was originally published on The Conversation. Read the original article.

The Conversation

 

 




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Human consumption driving wildlife loss Updated for 2026

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Human pressure has halved the numbers of many of the Earth’s wild creatures in just four decades, the Worldwide Fund for Nature says.

While the main recorded threat to biodiversity comes from habitat loss and degradation, it found, climate change is a growing concern. Both are driven by unsustainable human consumption.

WWF’s Living Planet Report 2014 says that vertebrate wildlife populations have declined by an average of just over half, with freshwater species suffering a 76% decline, almost double the average loss of land and ocean species.

In a foreword the director-general of WWF International, Marco Lambertini, writes: “This latest edition of the Living Planet Report is not for the faint-hearted.

“One key point that jumps out is that the Living Planet Index (LPI), which measures more than 10,000 representative populations of mammals, birds, reptiles, amphibians and fish, has declined by 52% since 1970.

“Put another way, in less than two human generations, population sizes of vertebrate species have dropped by half.”

The Report is based on the Index, a database maintained by the Zoological Society of London(ZSL).

Industrial-scale killing

According to WWF, the state of the world’s biodiversity “appears worse than ever.” But it is confident in the robustness of its findings:

“This is a much bigger decrease than has been reported previously, as a result of a new methodology which aims to be more representative of global biodiversity.”

The authors calculated the decline by analysing 10,000 different populations of 3,000 vertebrates. This data was then, for the first time, used to create a representative Living Planet Index, reflecting the state of all 45,000 known vertebrates. The consequences, it shows, can be drastic.

Last week conservationists said that elephant poaching was now happening on an unprecedented and “industrialised” scale in Mozambique, after 22 of the animals were killed for their tusks in the first two weeks of September. Numbers of some marine turtles are estimated to have dropped by 80%.

Professor Ken Norris, director of science at the ZSL, said: “The scale of biodiversity loss, and damage to the very ecosystems that are essential to our existence is alarming. This damage is not inevitable but a consequence of the way we choose to live.”

There is wide disagreement about the number of species on Earth. In 2007, when the total was estimated by many scientists at around 1.5 m (it is now thought to be 8.7 m) the number of vertebrate species was put at about 60,000 in the IUCN Red List.

WWF says too that humans are using more resources than the Earth can continue to provide, felling trees more quickly than they can regrow, for example, catching fish faster than they can reproduce, emptying rivers and aquifers – and emitting too much carbon for natural systems to absorb.

Boundaries crossed

The Report devotes a section to the idea of the Ecological Footprint, the sum of the ecological services that people demand which compete for space. For more than 40 years, it says, humanity’s demand on nature has exceeded what the planet can replenish, principally through climate change.

“Carbon from burning fossil fuels has been the dominant component of humanity’s Ecological Footprint for more than half a century, and remains on an upward trend. In 1961, carbon was 36% of our total Footprint; by 2010, it comprised 53%.”

WWF urges respect for “planetary boundaries” beyond which humanity will “enter a danger zone where abrupt negative changes are likely to occur.”

It says “three planetary boundaries appear to have already been transgressed: biodiversity loss, and changes to the climate and nitrogen cycle, with already visible impacts on the well-being of human health and our demands on food, water and energy.”

The Report argues for the diversion of investment away from the causes of environmental problems and towards solutions, and for “ecologically informed” choices about how we manage resources.

Next year world leaders are due to conclude two critical global agreements: the post-2015 development framework, which will include Sustainable Development Goals intended to be met by all countries by 2030; and a UN treaty leading to effective action to cut greenhouse gas emissions.

 

 

The report: Living Planet Report 2014.

Alex Kirby writes for Climate News Network.

Also on The Ecologist

 




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