By Jackie 2019-11-27 13:56:41
In 2017, China became one of the world's largest lenders of foreign clean energy investment and established a global leading position in promoting the domestic decarbonization agenda. However, there is a tension between the financing of clean energy and the state's continued investment in fossil fuels, especially coal power.
China's Major Coal-fired Power Projects Invested Worldwide
China is still an agnostic of fuel sources in the international market, effectively exporting its increasingly surplus thermal power generation capacity and expertise to the world. According to the July 2018 Global Coal-Fired Power Plant Tracking Plan, each coal-fired power plant currently under construction was analyzed one by one. The results show that China Finance is playing an increasingly important role in supporting and funding new coal-fired power plants in the international market. Important role. Of the 399 gigawatt (GW) coal-fired power plants currently under construction outside China, Chinese financial institutions and enterprises have promised or will provide funding for more than a quarter of the coal-fired power plant capacity (102GW).
These funds come from financial institutions around the world, including the World Bank, most multilateral development banks, and export credit agencies (ECAs) of OECD countries. In addition, many global private financial leaders have begun to consider thermal coal as a bad investment, with increasing asset risk (for example, Standard Chartered Bank in the UK, Generali in Italy and Japan Life in Japan, etc.).
Although the Chinese government has said it will restrict coal power loans, China has not formally restricted investment in coal power. On the contrary, as other banks take active measures to limit the financing of coal power, Chinese financial institutions are gradually becoming the last lenders of coal power.
Our main findings:
US $ 21.3 billion will be used for coal power installations in more than 30GW in 12 countries, and an additional US $ 14.6 billion for over 71GW in 24 countries will be proposed, for a total of US $ 35.9 billion for 102GW coal power projects in more than 27 countries.
The country with the largest amount of financial support for coal power installations in China is Bangladesh, followed by Vietnam, South Africa, Pakistan and Indonesia. Of the total installed capacity of 102GW, about 76GW is in a state before construction.
The 102GW coal power project accounts for more than a quarter (26%) of global coal power capacity and more than one third (35%) of coal power capacity outside China and India.
Many coal power project proposals involve large-scale projects such as expensive imported coal terminals or domestic coal mining with dedicated railway infrastructure. When the cost of electricity from renewable energy sources is lower than coal power generation, these projects cause high coal costs, Long-term structural dependence.
Chinese companies often act as general contractors in projects and are increasingly becoming co-managers and owners of projects, which underscores the central government's emphasis on financial returns from large-scale project development. Of the 102GW of global coal-fired installed capacity supported by China's finances, 30GW is jointly owned by Chinese companies.
China's role as an investor and developer of coal power mainly involves state-owned enterprises, and private entities rarely participate. The largest financial institutions are China's policy banks: China Development Bank and China Exim Bank, followed by Chinese commercial banks such as Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC). The largest number of companies involved are large state-owned enterprises, including State Grid Corporation, a Chinese utility monopoly, China Energy Engineering Corporation, an infrastructure group, state-owned power investment company, and China Huadian Corporation.
Most of the capabilities under construction belong to ultra-supercritical technology (38%), followed by supercritical technology (35%) and subcritical technology (23%). In contrast, between 2001 and 2016, 58% of power plants invested by Chinese policy banks were manufactured by subcritical technologies. However, China's finance still supports a large number of sub-critical and super-critical power plants, lagging behind the highly regulated market norms.
As other countries no longer support coal, funding for these projects has made China increasingly isolated. Although Japan and South Korea are the second and third financial supporters of global coal power plants, the Japanese Prime Minister and national power giant Marubeni have publicly stated that they intend to gradually withdraw from coal power with Japanese insurance companies First Life and Japan Life, At the same time, South Korea no longer allows new coal power plants and intends to increase coal taxes and transition to renewable energy. In terms of international financing of future coal power plants by state-owned policy banks, China leads the world with 44GW of installed capacity, followed by South Korea with 14GW and Japan with 10GW.
IEEFA states that China should reconsider funding for coal exports, coal-fired power plants, and related railway and port infrastructure. The International Energy Agency (IEA) believes that by 2022, renewable energy will account for 60% of the world's new power generation capacity, and will occupy a dominant position in the next 20 years. According to IEEFA estimates, China ’s “Belt and Road” (BRI) program has boosted China ’s $ 8 billion export of solar photovoltaic equipment, helping China surpass the United States and Germany as the world ’s largest exporter of environmentally friendly products and services. As the world gradually abandons fossil fuel-based production capacity, it makes sense for China to continue to consolidate its leading position in the global renewable energy development field.