The projects, worth an estimated 430 Yuan ($62 billion) and having a combined installed capacity of more than 100 gigawatts were spread out in provinces and autonomous regions including Xinjiang, Inner Mongolia, Shanxi, Gansu, Ningxia, Qinghai, Shaanxi and other northwestern regions, according to Reuters.
In a document issued on January 14, Caixin is reporting that the DEA says the move is in line with the central government’s efforts to produce power from renewable sources such as wind and solar and wean the country off coal. The move was also made in an abundance of caution over concerns that mild demand for electricity could create a power glut.
The frenzy of investments in coal power is the result of Beijing’s 2014 decision to delegate the approval of thermal power facilities to provincial authorities. As Caixin put it, local leaders are quick to approve these big projects, thinking they will improve the local economy. But this often leads to supply gluts and other inefficiency problems.
NEA head Nur Bekri has been concerned about the construction craze for some time, warning earlier this month that there may still be more across-the-board cuts in the energy sector. This latest round of cuts is not new. In September 2016, Beijing blocked 15 coal power projects with a total planned installed capacity of 12.4 GW in nine provinces
“Stopping under-construction projects seems wasteful and costly, but spending money and resources to finish these completely unneeded plants would be even more wasteful,” said Greenpeace in a statement.
The London-based independent think tank, Carbon Tracker released a report on China’s energy needs in November. They said that China does not need any new coal-fired power plants at this time. Their study showed China had 895 GW of operating coal-power capacity, or 2,689 plants, and they are only being used about half-the-time, as of July last year.
The report also pointed out that while electricity consumption rose in 2016 by 5.0 percent, the spike was due to increased use of cooling devices during the third quarter. It was during this time that the temperature shot up to its highest levels since 1961.