The Chinese government has ordered the vast majority of its provinces to stop permitting new coal power projects.
According to a statement from the National Energy Administration (NEA), 28 of China’s 31 mainland provinces do not currently have the right financial or environmental conditions to greenlight new coal capacity.
This represents an update to the government’s ‘traffic light’ system, designed to tackle the country’s coal overcapacity crisis — that we reported on last year.
24 provinces were issued red lights, 4 earned the orange light (which this year is much stronger) while only two were given the green light.
This follows Beijing’s decision earlier this year to cancel more than 100 coal power projects — including many that were already under construction.
It also comes as China’s coal consumption has fallen for the third year running.
A closer look at the latest ‘traffic light’ evaluation suggests China may be preparing to drive its coal industry out in the water-starved regions in the west.
According to a Greenpeace analysis of the NEA documents, a number of provinces suffering from severe water stress are being not recognized as such.
The government claims its ‘resource constraint indicators’ are based on air pollution, water resources, and coal consumption.
But several of the regions awarded green lights in this category are grappling with the water crisis, according to data from the World Resources Institute.
Many of these provinces, mainly in the west and north, have seen devastating droughts leading to drinking water problems for people and livestock; crop yields have failed with the lack of water; locals report problems in daily life; desertification looms large.
We reported earlier this year that the permits for new coal plants in 2016 have declined 85% compared to 2015, but that the new permits are concentrated in areas of high water stress.
Data from the last two-quarters (the end of 2016 and beginning of 2017) show this trend is continuing same trend going forward.
Over 70% of the projects in the permitting pipeline are in extremely water-stressed areas, so-called over withdrawal zones, where the water is withdrawn from a basin exceeds its capability to renew.
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