Chinas coal overcapacity crisis

China is currently building more coal power plants than it needs

895 GW 205 GW 405 GW

existing coal capacity* coal capacity coal capacity
used less than under construction planned
half of the time

*as of July 2016

Existing capacity fulfils Half a trillion US$

power generation requirement could be wasted
until 2050 on coal plants under construction and planned

Why is Chinas 13th Five-Year Plan doesnt add up for coal generation
coal capacity
at risk? 13 FYP
Low Declining Early Coal
low-carbon
power capacity plant stranded
capacity
Chinas power 10% demand factors retirements assets
targets
demand to
growth 3%
is slowing
down. per year

Annual power generation growth 5%

In 2015 alone China built: 4%
3%
2 coal plants 2%
per week 1%

1 football
pitch of solar
panels
every hour Operating
Operting & Under
plants construction

1 large
wind turbine
every hour 45%
59 142

-174 -362 -99 -288 -22 -210 -129 -46

Power market reforms
Capacity factor

& national ETS

can halve the gross profitability 50%
36
of the existing fleet.
-249 -437 -182 -370 -112 -300 -40 -228 -152
Based on CTI 2020 reform scenario
55%
$US10 15% fall in
t/CO2 coal power
carbon price tariffs -311 -499 -250 -438 -186 -374 -120 -308 -52 -240

27 GW Needed Unneeded
GW GW GW GW
cash-flow capacity capacity
negative
895 GW

140 GW
with gross profit Additional capacity beyond existing plants is only required by 2020 if power generation growth
of US$5/MWh
or less exceeds 4% per year and coal plants are run at a capacity factor of 45% or less.

arbon Tracker
Initiative
Source: Carbon Tracker report Chasing the Dragon? Chinas coal overcapacity crisis and what it means for investors, Nov 2016
Designer: Margherita Gagliardi