China Electricity Supply and Demand Report calls for coal expansion despite repeated decline in plant utilization rates

Oct 26, 2020

In July, the State Grid Energy Research Institute published its China Electricity Supply and Demand Report 2020. While the first quarter saw a sharp decline in consumption due to COVID-19, a rise in consumption by 1.5-3.5 percent compared to 2019 is expected by the end of 2020. It expects an installed wind capacity of 250 GW and a PV capacity of 240 GW by the end of the year. Utilization hours of coal power plants are estimated to fall by 80 hours to 4210 hours, likely exacerbating existing profitability woes of coal power plants and extending them to even more plants. However, despite this generally negative economic outlook for coal power and despite existing overcapacities, the report still calls for building capacity strongly by 2025. The reason is an assumed increase in power demand. Three provinces are named as being at risk of a supply shortage: Hunan, Henan, and Jiangxi. These provinces are adjacent to regions with the same grid and considerable surplus capacities that could be used to balance out these shortages. This demonstrates the ongoing challenge of creating an integrated regional electricity market that traverses provincial borders. Moreover, the resulting carbon dioxide emissions of these planning decisions are not accounted for – so far, they are not playing a role in making long-term investment plans.


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Sino-German Climate Partnership III

Project country
Political Partners
German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU); Ministry of Ecology and Environment of the People's Republic of China (MEE); National Energy Administration of the People's Republic of China (NEA)
Implementation Partners
Energy Research Institute of the National Development and Reform Commission of the People's Republic of China
09/2017 – 09/2020

Germany and China signed the Memorandum of Understanding on Cooperation in Combatting Climate Change and initiated this bilateral dialogue as "Sino-German Climate Partnership". The project has been established to support the cooperation between the German Ministry of Environment, Nature Conservation and Nuclear Safety (BMU) and the Chinese Ministry of Ecology and Environment (MEE). The new phase of the project starts in 2018 with close alignment to the restructuring at the Chinese government. In this phase, the project aims to advance the policy dialogue and cooperation with the Chinese partners domestically as well as within the international context of climate change. Part of the work will be supporting the development and implementation of China's medium- and long-term low-carbon development strategies, hence by supporting the Chinese government in strengthening the climate governance system. Domestically the SGCP project supports the policy dialogue on climate change (Sino-German Working Group on Climate Change) and enhances the exchange of German experiences and best practices, this includes strengthening capacities for the development of integrated climate and energy action plans as well as adaptation concepts for cities. On international level the SGCP project enhances the knowledge of both patterns about best practices in regard of climate policies and their implementation. For new cooperation topics identified by the Working Group on Climate Change, the project acts as an incubator for IKI development. As interface for information management, it serves a as a hub for exchange between partners of the IKI within and outside China, especially within the UNFCCC process.