China's drop in new thermal power pinned on economy, war on pollution

BEIJING, April 30 Wed Apr 30, 2014 4:30pm IST

BEIJING, April 30 (Reuters) - China added nearly 40 percent less coal- and gas-fired power capacity in the first quarter than it did a year ago mainly due to stronger pollution controls and slower economic growth, a senior government advisor said on Wednesday.

China, the biggest global emitter of gases that cause climate change and plagued by air quality that causes half a million deaths a year, consumes nearly half the world's coal.

But recent data released by the National Energy Administration (NEA) showed that newly installed coal and gas power capacity in China fell 38.9 percent in the first quarter compared to the same period last year, a sign that the share of fossil fuels in the energy mix are slowly coming down.

New renewable energy and nuclear capacity grew in the same period. Since the beginning of last year, non-fossil fuels have accounted for nearly 60 percent of new power capacity.

"The reduction in coal-fired capacity is due to the economic slowdown," Li Junfeng, director general at government think-tank the National Center of Climate Change Strategy, told Reuters.

"But the reduction is also a result of the crackdown on air pollution," Li told Reuters.

China's GDP grew by 7.4 percent in the first three months of the year, a notable drop from levels seen in the last decade.

In a bid to curb smog levels in the nation's main urban centres, the government has banned construction of new coal plants in the Beijing-Hebei-Tianjin region in northern China, and in the Yangtze and Pearl river deltas.

Coal capacity makes up most of China's thermal fuel power generators.

According to Li, 75 percent of the investments in the power sector last year flowed to non-fossil fuel projects, including hydro, solar and nuclear plants.

"Over the past several years, the share of thermal generation ... has been declining steadily. With the slowdown in economic growth and the requirements for air quality improvement, investment in thermal generation could decline further," said Wang Wanxing, the utility programme director of think-tank The Energy Foundation.

Government data shows that coal-fired power generation continues to grow in absolute terms - 4.7 percent in the first quarter - as China continues to consume more and more energy.

But in comparison, nuclear power rose by 16.3 percent year-on-year in over the same period, hydro by 9.7 percent and wind by 9.5 percent.

China hopes to bring coal's share of total energy consumption to below 65 percent this year, two years ahead of schedule, and continues to shut down old, inefficient coal plants and factories to mute energy waste.

Last year, coal's share of the energy mix was 69.6 percent, the first time it had dropped below 70 percent in 35 years. (Reporting by Stian Reklev and Kathy Chen; Editing by Tom Hogue)

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