ecarbonisation upgrades to China's coal power plants will accelerate according to a 7 July government action plan. "Coal power still has a role to play in ensuring electricity supplies for a certain period of time," it stated.
From DIALOGUE EARTH
Despite China's renewables push, coal power is expanding to ensure reliable energy, operational flexibility, and heat, write three experts
ecarbonisation upgrades to China's coal power plants will accelerate according to a 7 July government action plan. "Coal power still has a role to play in ensuring electricity supplies for a certain period of time," it stated.
For years, China has been expanding its renewable-power generation faster than any other country. It accounted for roughly 63% of the world's new wind and solar capacity in 2023, and 40% of cumulative installed capacity. In June, the International Energy Agency predicted that by 2030, China's installed renewable capacity would approach 3,200 gigawatts (GW), or 2.5 times the 2022 level.
But neither the speed nor scale of this expansion has halted the growth of coal power. In April, a report by Global Energy Monitor found China had approved 200 GW of new coal power since 2022. The percentage growth in national coal consumption in 2023 exceeded the global figure, attracting widespread attention from the international community. There are three reasons for this, and they relate to three underlying challenges. First, other sources of energy cannot yet satisfy growing power demand. Second, there is a shortage of sources of electricity that are clean but also able to provide operational flexibility. Third, the development of technology to provide heat from clean energy is lagging.
This article will explore the situation and possible solutions, using Shandong as an example. The north-eastern province has China’s largest installed solar capacity, and second-largest installed coal-power capacity and electricity demand. It also needs more heat for its residential and industrial sectors than any other province. Currently, it gets most of this from combined heat-and-power plants fired by coal.
Ensuring supplies: Huge and growing demand for electricity
In 2023, 9,220 terawatt hours (TWh) of electricity were used across China, 6.7% more than in 2022. This was about twice as much as in the United States (4,267 TWh) and 3.5 times the European Union (2,696 TWh), according to data analysed by European think-tank Ember. Usage in Shandong alone was 797 TWh, or 1.5 times that of Europe’s biggest electricity user, Germany (514 TWh).
Electricity usage in the US and developed EU nations is holding steady, or even falling. In China, it is still growing, by an average of 5.7% a year between 2013 and 2023, according to Ember. This compares to growth of 0.4% a year in the US, and falls of 0.7% a year in the EU as a whole and 1.5% in Germany. China saw year-on-year growth in electricity use of 8.1% in the first half of this year, with growth for the whole year expected to be 6.5%, according to China Electricity Council. This increase would be more than Germany's current total electricity consumption.
Such high growth, and from such a high starting point, means non-coal sources of power – renewable, nuclear and gas included – cannot satisfy the increase in demand: China still needs a small amount of new coal power to bridge the gap. About 314 GW of new, non-coal installed capacity (accounting for over 85% of all newly installed capacity) was added in 2023, according to China Electricity Council. Wind and solar accounted for the lion's share of that (almost 300 GW). Still, that was not enough to meet growth in demand of 576 TWh. So, 40 GW of coal power was also installed in 2023. That translated to a 290 TWh increase in coal-generated electricity, meeting half of the overall growth in demand.
Peak regulation: A lack of flexible resources
By the end of June this year, China's wind and solar power accounted for around 40% of installed generating capacity and around 20% of electricity generated. Both figures have more than doubled over the past five years. This means the grid needs additional flexibility to cope, because renewable generation fluctuates with the weather. In Shandong, the rapid expansion of solar has transformed the electricity system from concentrated and stable to distributed, fluctuating, and requiring more active management.
Unlike the US and EU, China has fewer gas-fired power stations that can quickly adjust output and reliably respond to peaks in power demand. They also emit less CO2 per unit of power generated than coal plants. According to Ember, gas power accounted for only 5% of China's installed capacity in 2023, far below the US (42%), UK (36%) and Germany (14%). Germany has 82 GW of solar backed by 34 GW of gas whereas Shandong has 60 GW and 0.6 GW respectively. The province has little choice but to rely on its 100 GW of coal power to provide flexibility, with those plants stopping and starting dozens of times a month to meet demand.
China is speeding up its deployment of batteries and pumped-storage hydropower to provide clean-energy flexibility. However, the former have limited storage capabilities, and the latter involves long construction periods. These technologies will not replace coal as a provider of flexibility in the near- or mid-term. So, this January, China's National Development and Reform Commission published guiding opinions on adding peak regulation and storage capacity, as well as smarter dispatch mechanisms. The first point addressed more flexibility upgrades for coal power, with all changes to the existing fleet to be completed by 2027.