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China suspends coal power projects to avoid overcapacity

China‘s National Energy Administration (NEA) has ordered the suspension of 85 coal-fired power projects in its latest effort to limit development to the capacity set out in the government’s 2016-2020 five-year plan.

The projects in 13 provinces and cities have a combined capacity of over 100 GW. If completed, they would bring the nation’s total installed capacity to 1250 GW, breaching the cap of 1100 GW set in the plan. à‚ 

Investment in the projects totalled around RMB430bn ($62bn) and construction had already begun on some projects.

The five-year plan aims to reduce the share of coal power to 55 per cent of China’s total generation capacity by 2020. To this end, in March the NEA halted construction of new coal-fired power projects in 15 regions where capacity was in surplus, while in April it introduced a so-called ‘traffic light’ controls system based on an analysis of capacity by region.

In November the Carbon Tracker Initiative (CTI) reported that although many of China’s coal-fired plants were running at less than half their capacity due to falling power demand, 205 GW in new capacity were under construction and 405 GW were planned.

In February 2015, before the plan, analysis firm GlobalData predicted that China’s installed coal-fired power capacity could reach 1367 GW by 2020.à‚ China’s current installed coal-fired capacity is around 920 GW.