China's coal rush faces conundrum｜Greenpeace

China’s coal rush faces conundrum China is highly depended on coal as the primary source of energy that accounts for around 70% of the country’s total primary energy consumption. According to the ‘China Energy Statistical Yearbook 2012’, China consumed over 3.43 billion tons of coal in 2011, half of which was burned by the power sector.

China is the world’s largest consumer of coal by a wide margin. BP Statistical Review of World’s Energy estimates that China burned 50.2% of all the coal consumed in the world in 2012. The second biggest coal consumer, the United States consumed over 11.7%, followed by India consuming 8%.

Energy efficiency and economic development policies can strongly influence how much energy growth is needed to fuel the economic growth, and how the increased energy demand is met.

Many believe that China’s coal demand will keep on rising to feed the world’s 2 nd biggest economy, and Beijing has approved plans for massive expansion of coal plants in the country’s coal-rich northwestern areas. However, Greenpeace East Asia believes two factors may constrain China’s coal rush and cool the country’s demand for coal: frequent air pollution crises which have triggered public outcry for curbing coal burning, and the shrinking water resources in northwestern China.

The biggest coal power in the world

The main force behind China’s rapid growth in coal combustion in the past decade has been its growing economy, and in particular very large investments in factories and infrastructure, which have driven electricity demand in tandem. According to a new coal power plants database compiled by Greenpeace East Asia, 2355 coal power plants (Table 1, Chart 1) with a total installed capacity of 752 gigawatts (GW), were operated in China by the end of 2011, more than the combined total capacities of the US and the EU. Jiangsu, Guangdong, Shandong, Inner Mongolia and Henan make China’s top 5 provinces in terms of installed coal-fired power generation. Their combined installed capacity reached 295GW in 2011, dwarfing the 189 GW capacity of the EU.

Chart 1. 2355 operated coal power plants in China by end of 2011

On top of this, Greenpeace East Asia’s coal power plants database estimates that 570 new coal power plants (Table 1, Chart 2), with a total installed capacity of 650GW, are proposed, commissioned or under construction in China. If realized, there would be up to 2900 coal power plants with installed capacity of up to 1400GW around China (Chart 3). Together these ongoing and upcoming projects will increase current generation capacity by 86% and account for 40% of global coal power plant expansion.

Chart2. 570 Proposing coal power plants in China

Chart 3. 2925 coal power plant in total in China

The planned capacity appears radically over-size compared with actual demand for coal-fired generation. Since the beginning of 2012, the average running hours of coal-fired power plants has dropped as coal-fired generating capacity has greatly outrun demand. According to National Energy Administration, the running hour of thermal power plants have dropped to 4965 hours in 2012, 340 hours less than 2011. This can be attributed to lower power demand growth and increasing output growth from hydro, renewable energy and gas. If coal-fired generation capacity keeps growing, unutilized capacity will grow with it, making it much harder for China to shift to cleaner energy sources.

More coal, more air pollution, more premature deaths One major problem caused by coal-fired power generation in China is air pollution. The “2010 Global Burden of Disease Study” found that outdoor air pollution contributed to 1.2 million premature deaths in China in 2010 alone. Another study by Peking University found that more than 8,000 people died prematurely in four Chinese cities due to PM2.5 pollution. Greenpeace East Asia’s “Tracing back the smog” report identifies coal-fired power plants as the largest contributor to outdoor air pollution in the Beijing-Tianjin-Hebei region. Environment Statistical Yearbook 2011 issued by China’s Ministry of Environment Protection shows that thermal power is the key source of waste gas emission, account for 36.9%, 44.6% and 16.9% of national total emissions of SO2, NOx and soot respectively.

To assess the health impacts of coal power plants’ air pollution emissions in the whole country, Greenpeace commissioned state-of-the-art air pollution modeling from Dr H. Andrew Gray, a US based air pollution modeling expert. Air pollution emissions for the modeling were taken from the Greenpeace Chinese coal power plants database that combines the available information from China Electricity Council, China National Bureau of Statistics and Ministry of Environmental Protection, company CSR reports and other sources, to provide the most detailed picture of China’s power plant emissions to date. The health impacts assessment covers key impact categories like premature deaths from lung cancer, stroke, heart disease and chronic respiratory disease, children and adults suffering from asthma, and hospital admissions, etc. caused by PM 2.5 from both operated and proposed coal power plants in China.

The key results are:

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In 2011, the 2355 operated coal power plants have caused an estimated 260,000 premature deaths (Table1, Chart 4), 320,000 children suffering from asthma, 61,000 adults suffering from asthma, 340,000 hospital admissions and two million doctor visits. The premature deaths number is 20 times more than the 13,200 premature deaths caused by coal power plants in US in 2010.

Chart 4. Health impacts of operated coal power plants in China (Unit. Premature death per 10km*10km)

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It is projected that the 570 new proposed coal power plants would cause 32,000 premature deaths (Table1, Chart 5), 39,000 children suffering from asthma, 7,400 adults suffering from asthma, 42,000 hospital admissions and 250,000 doctor visits. These numbers are very conservative, as full compliance with new air emission standards was assumed for all new plants.

Chart 5. Health impacts of new proposed coal power plants in China (Unit. Premature death per 10km*10km)

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The proposed 302 new coal power plants in the top six provinces are projected to cause 19,800 premature deaths in total, accounting for 62% of the whole country’s premature death caused by new coal power plants (Table 1): 6,100 premature deaths in Inner Mongolia, 4,200 in Shaanxi, 2,700 in Ningxia, 2,600 in Gansu, 2,400 in Anhui and 1,900 in Shanxi.

Coal consumption forced to peak in key regions

The air pollution crisis in key regions of China has triggered public concern and government action to restrict coal demand in China. In September 2013, China’s cabinet (the State Council) has announced a detailed “The Airborne Pollution Prevention and Control Action Plan” to cut fine particle PM2.5 pollution, the plan prohibits the approval of new coal-fired power plants except for combined heat and power (CHP) projects in three key regions including the Beijing-Tianjin-Hebei area, Yangtze River Delta and Pearl River Delta. This was followed by the Ministry of Environmental Protection (MEP) leading other five central government departments in releasing a detailed Beijing-Tianjin-Hebei and surrounding region air pollution action plan, setting for the first time an ambitious timeline for achieving absolute reductions in coal consumption in Beijing, Tianjin, Hebei and Shandong of 83 million tons by the end of 2017 compared to 2012. In addition, Shanghai released its own plan to peak and decline coal consumption by end of 2017. These plans show that China is at a turning point, with ambitious targets being introduced for cutting coal consumption in the most developed and polluted regions. And, in December 2013, over 100 cities in China has been suffering through choking smog will force more regions joining to peak

coal consumption.

Water: the bottleneck for coal rush in Northwestern China

Faced with limitations in developing coal-fired power generations, China is eyeing its coal-rich Northwest for power to fuel the world’s 2nd largest economy. China’s 12th Five-Year-Plan of Energy approved 16 giant coal power bases in Shanxi, Inner Mongolia, south-west China and Xinjiang with a combined capacity exceeding 600GW (Chart 6).

Chart 6. 16 approved giant coal power bases in China’s 12th Five-Year-Plan

Most of these new projects are based in northern and northwestern provinces, with 302 of them based in the six provinces of Inner Mongolia, Shaanxi, Gansu, Ningxia, Anhui and Shanxi. Together these projects register a total installed capacity of 394GW, account for 61% of China’s total proposed capacity and surpasses the US’ existing generation capacity of coal power plants in 2011.

However, with water scarcity worsening in China, especially Northwestern China which has more than half of the country’s coal reserves, the outlook of these mega power bases are in question.

The Greenpeace East Asia report “Thirsty Coal” commissioned from Chinese National Academy of Sciences shows that at least 10 billion cubic meters of water - equivalent to about one fourth of the annual total water volume of the Yellow River - will be consumed by the 16 giant power bases in China in 2015, risking severe water crises in the country’s arid Northwest.

WRI’s Aqueduct Water Risk Atlas evaluated the coal-water nexus in China, finding that the six provinces with 60% of the total proposed coal-fired generation capacity only have 5% of China’s total water resources, and in some of the arid areas coal-fired power generation is grabbing water entitled to domestic, agricultural and industrial users.

Financial sector sees Chinese demand for coal cooling

In addition to the air pollution and water risks that will significantly curb coal demand and expansion, financial reports have noted several factors pointing to weakening coal demand in China. In September, Citi Research’s report, “The Unimaginable: Peak Coal in China”, which noted that “significant shifts in China’s economy and power sector are now under way that demand a reassessment of Chinese coal’s perpetual climb”.

The weak market and plummeting prices of coal both in China and globally has already called into question the viability of investment in coal business. A report from investment bank Goldman Sachs also concluded that the window for thermal coal investment is closing.

China needs to move faster away from coal expansion To sum up, air pollution and water shortage are the two key reasons for Chinese government to

move away from coal investment and reduce the country’s reliance on coal in its energy strategy.

Although the Chinese government has clear and concrete air pollution reduction targets to ban new coal power plants, cut excess capacity from steel & iron, and cement sectors, the current action plan only focus on cutting excess industrial capacity, not really touching on adjusting energy mix. If the massive uncontrolled coal expansion plan is realized in Northwestern China, due to the outstanding mobility of airborne pollutants, it will cause huge health impacts in the next 30-40 years, and offset current effects of air pollution control. It will also magnify severe water crises in the country’s arid Northwest, where the coal projects will be built. Therefore, Greenpeace believes that China should immediately curb the expansion of coal burning, reduce reliance on coal in their energy mix, invest in renewable power generation to the maximum extent and use the clean energy to replace coal-fired power plants.

Table 1. Detailed information on each province’s coal power plants including capacity and health impacts Operated in 2011

Proposing

Sum

Provinces

P r e m a t u r e d e a t h

No Anhui

105

Installed capacity/MW 30750

Beijing Fujian Gansu Guangdong Guangxi Guizhou Hainan Hebei Henan Heilongjiang Hubei Hunan Jilin Jiangsu Jiangxi Liaoning Inner Mongolia Ningxia Shandong Shanxi Shaanxi Shanghai Sichuan Tianjin Hong Kong Yunnan Zhejiang Chongqing Sum

11 45 23 90 73 34 10 156 109 84 77 56 61 235 44 101 129 28 387 121 56 23 92 29 2 30 111 33 2355

3098 23734 12967 52027 11146 20316 5456 38063 49325 16865 20010 19781 17042 65465 15435 31582 64602 17156 63112 44210 23678 14834 15718 10697 6610 10225 41011 7076 751990

No 34

Installed capacity/MW 39608

1 9 34 27 15 20 2 6 31 13 13 6 10 25 7 9 129 28 29 28 49 3 9 3 NA 5 19 6 570

75 10560 51454 27490 13637 23174 1400 5845 18492 25755 12919 9740 9710 16435 7112 5512 163501 41245 26867 30140 67564 2807 12714 2750 NA 4800 13775 4620 649701

No

Operated

Proposing

Sum

139

Installed capacity/MW 70358

11764

2430

14194

12 54 57 117 88 54 12 162 140 97 90 62 71 260 51 110 258 56 416 149 105 26 101 32 2 35 130 39 2925

3173 34294 64421 79517 24783 43490 6856 43908 67817 42620 32929 29521 26752 81899 22547 37094 228103 58401 89979 74350 91242 17641 28432 13447 6610 15025 54786 11696 1401690

1004 2745 6573 5823 1766 6415 391 15239 29861 1399 8599 5000 1616 23223 4268 4660 21373 9467 28380 24278 12853 4370 6184 3669 276 2136 10456 2930 256720

4 298 2563 721 382 1798 10 328 1504 123 852 439 158 955 293 114 6075 2720 1399 1872 4177 128 1062 146 NA 247 474 452 31726

1008 3043 9135 6544 2147 8214 401 15567 31366 1522 9452 5439 1774 24179 4562 4774 27448 12188 29780 26149 17030 4499 7246 3816 276 2384 10931 3381 288446

Methodology and background information Greenpeace combined the coal power plants database base on open public information, the original data is from WRI’s Global Coal Risk Assessment and Platts. The database includes coal power plants operated in 2011, being proposed, commissioned or under construction. We did not include the feet with installed capacity less than 6MW, and the feet in Xinjiang, Tibet and Qinghai are not in our database.

The study used a sophisticated atmospheric dispersion model (CALPUFF) to simulate the longterm regional transport of air pollutants emitted from coal-fired power plants. The resulting

increase in ambient pollutant concentrations were estimated over an annual cycle of meteorology. Health impacts were then calculated using the concentration-response functions adapted from the WHO Global Burden of Disease 2010 project (Lim et al. 2012) –the most recent and authoritative look into preliminary deaths caused by PM2.5 in China and globally.