Incentives to build more coal-fired power plants are almost non-existent.
China’s move to ease its new power plant ban and allow for more coal-fired power plants is not expected to cause a flurry of construction as policies and investments are expected to shift towards renewables, according to a report by Bloomberg.
Many of the nation’s largest power companies are under a state drive to develop more clean energy projects, according to Morningstar Inc., which expects growth in coal-fired capacity to lag other sources.
“The profitability of coal-fired power plants is so low, there’s no incentive for them to build more,” said Morningstar analyst Jennifer Song. “China as a whole has set consumption targets for renewable energy sources. We can see those large power groups also have quotas to build more renewable projects.”
Businesses and governments are tracking China’s efforts to transform its energy mix as its massive scale could shape global trends and spur a faster transition toward renewable energy.
In its battle against pollution, China has spent more on renewable energy than any other country and led a campaign to burn gas instead of coal. Yet it’s still pumping money at home and abroad into coal-fired generation, and it’s forecast by the International Energy Agency to continue to consume about half the world’s coal through 2023.
Read the full report here.
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