China to re-examine its position on coal

After a nationwide power outage, the republic is exploring ways to avoid a repetition

The republic suffered an awkward and disastrous blackout, along with a construction crisis involving a conglomerate. It was a roller coaster ride from rock-bottom coal supply to excess inventory which traded at losses.

Looking to natural gas and liquefied natural gas (LNG)
With an objective to avoid another episode, policymakers were said to be reassessing how it deals with coal, simultaneously enabling gas in the energy transition as a bridging fuel with half the emissions. They were also exploring keeping coal plants as backup power sources instead of complete decommissioning — plus having suitable technologies and ready funds to withstand the intermittency of renewable energies in the event of reaching a threshold. The subject was recently debated at an industry forum “The Underlying Logic of the New Power System”.

Chen Zongfa, Deputy General Counsel with China Huadian Corporation questioned, “Coal-fired power plants require upgrading and retrofitting. However, where would the financing be from? Since 2007, 294 gigawatts (GW) of coal-fired power capacity were phased out. Was it reasonable to phase out that much power capacity, and executed in a proper way?” The company is China’s largest state-owned power generator that was severely impacted by the volatile coal and power rates.

The republic accounts for some 40 per cent of annual CO₂ emissions. It was said to have some of the world’s largest solar and wind generation capacity, totalling 581 GW as of October 2021. Unfortunately, it neither guaranteed sufficient and stable power supply, nor effectively substituted coal-fired power generation.

Xu Xiaodong, Senior Consultant with China Electric Power Planning & Engineering Institute, a government-backed think tank noted, “What’s the new energy system? In my view, it should provide everyone with stable power supplies despite having no sunlight or wind. We cannot get rid of coal-fired power in a long period, because we need it as the ballast that ensures energy security. Nevertheless, we will target shortening this duration and meet the climate pledges in time.”

Xu projected the country’s demand for coal to peak around 2025, with natural gas in 2040. He added that natural gas can partially substitute coal for power supplies. Xu nonetheless assured that the republic’s dependence on natural gas and LNG reached 50 per cent, and is expected to hit the 60 per cent mark in the next few years.

Marine Online News Team
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