The Chinese province of Guangdong will ban new coal-fired power capacity either through constructing new plants or expanding existing facilities. According to the Guangdong Development and Reform Commission, the policy is part of a broader crackdown on energy-intensive industries. Guangdong is one of China’s most industrialized provinces, and its move highlights the decarbonization pace of the country’s power sector. It is also expected to encourage other regions to follow suit, industry analysts said.
In addition, GDRC said that it would carry out an investigation on “two highs” projects under construction and would stop those which fail to meet the requirements and obtain necessary environmental permits. “Two highs” refers to projects in eight sectors, including coal-fired power, chemicals, petrochemicals, coal-to-chemicals, coking, building materials, iron and steel, and non-ferrous metals, with high carbon emissions and energy consumption of more than 10,000 tons of standard coal equivalent.
More importantly, GDRC will also prohibit construction and expansion of crude oil processing, steel, cement, chemical pulping, plate glass, and raw leather tanning projects outside the national plan in the Pearl River Delta area. The agency also noted that it plans to promote the decommissioning of existing coal-fired power plants after their service period expires.
Installed power generation capacity in Guangdong totalled 142 million kilowatts as of 2020, or 6.4% of the nation’s total. The province has the largest gas-fired nuclear power generation capacity in China. It consumed roughly 29 Bcm of natural gas in 2020, making it the second-biggest gas-consuming province in China after Jiangsu. Coal consumption by the power industry accounted for 33% of Guangdong’s overall energy demand in 2020, below the national average. Meanwhile, the province’s non-fossil fuels use accounted for 29% of its total consumption last year, above the national average.
Guangdong and some other Chinese provinces have implemented power rationing in some key sectors in recent weeks to conserve fuel stocks before the winter heating season and amid soaring coal prices. Under Guangdong’s power rationing, electricity supply to industrial users is cut four or five days a week. The policy is expected to prompt a shift to other fuels like renewables and gas.
