The pace of coal-fired combined heat and power plants (CHPPs) commissioning in China decelerated significantly this year. In 2023, 48.1 GW of coal-fired CHPPs were connected to the grid, and in H1 2024 – only 8.6 GW, which became the minimum half-year metric for the period of over 20 years. On one hand, the contributing factor is intensification of the competition with low-carbon energy sector, where material cost reduction occurred over the last decade. In 2012, the levelised cost of energy generation by on-shore wind farms in China was USD 0.08 per 1 KW*h, and in 2022 it was USD 0.03 per 1 KW*h (in real terms) according to the International Renewable Energy Agency (IRENA). The similar indicator for solar panels decreased from USD 0.21 down to USD 0.04 per 1 KW*h over the same period.
Such cost-cutting became one of the factors of drastic facilitation of RES commissioning rates. According to Rystad Energy, in 2023, 293 GW of wind and solar power plants were commissioned cumulatively, while in mid-2010s their annual commissioning rate hardly exceeded 50 GW. At the same time, China more than doubled its investment into nuclear reactors construction during 2019-2023 – from USD 6.4 bn up to USD 14.0 bn respectively (in real terms). According to IAEA, in 2019-2023 10 nuclear reactors were commissioned with their cumulative net capacity making 10.2 GW. As a result, by today China moved to the third position globally by the installed capacity of nuclear power plants (NPPs) (54.2 GW vs 61.4 GW in France and 97.0 GW in the US).
The intended shutdown of long-term operational coal-fired CHPPs was an important factor for Chinese power generation sector. According to Global Energy Monitor, 124 GW of coal-fired CHPPs were disconnected from the grid in China during the period from 2000 to H1 2024, which is over 10% of the overall capacity of currently operating CHPPs. However, solid fuel is still dominating in the energy mix: in 2023, 60.7% of electricity in China was generated by coal-fired power plants, and only 15.5% – by wind and solar power plants, one of the reasons for that being the dependency of RES on weather conditions. The share of all other energy sources including NPPs and hydropower plants made 23.8%.
