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China sets high target for coal power capacity cuts

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18 August 2017

China sets high target for coal power capacity cuts

Report summary

China is pushing harder than ever before to cut excess coal power capacity, to prevent the imminent risks from overcapacity reaching a critical point. A series of measures have been announced to tighten up enforcement and support – with outdated coal-fired power plants ordered to close and new projects put on hold or even cancelled. The latest government-issued list targets 106 GW to be cancelled or deferred and 5 GW to be decommissioned. With a similar list issued in January, the total suspended capacity could reach 190 GW. Coal-rich provinces such as Shanxi and Inner Mongolia will bear the brunt. In this campaign, environmental policies are playing a bigger role in determining the scale of capacity rationalisation. Nevertheless, how to manage the financial fallout as a result of the mass suspensions could prove a key challenge to the supply-side reform’s agenda. 

Table of contents

    • China has extended its capacity cut effort into coal-fired power...
    • the latest move sets a high target and calls for more stringent enforcement
    • Environmental policies have a bigger influence on capacity cuts
    • Tackling the financial fallout could remain a key challenge
      • Coal economics sensitivities to coal prices and utilisation levels

Tables and charts

This report includes 4 images and tables including:

  • Evolution of China’s coal power capacity cut policies since 2016
  • Total announced capacity cut and deferral since 2016
  • China will cap its 2020 coal-fired power capacity below 1,100 GW
  • China sets high target for coal power capacity cuts: Image 4

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    China sets high target for coal power capacity cuts

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