After years of complaints from conservationists, China appears to be heading for an inter-agency showdown over building new coal-fired power plants.
In a stunning report released on January 29, the government’s Central Environmental Inspection Team (CEIT) criticized the National Energy Administration (NEA) for authorizing new coal-fired energy projects at a time when the President Xi Jinping pledged to redouble efforts to combat climate change.
The findings of the oversight team’s investigation were reported by the Ministry of Ecology and Environment (MEE) and posted to the MEE and NEA websites in what appeared to be a very unusual type of attack. “Denunciation and shame” against a government agency.
“Never before has a high-level central government agency been inspected and openly criticized for multiple ‘failures’ related to energy development,” environmental website carbonbrief.org said.
CEIT investigators accused the NEA of failing to place environmental protection “at a high level”, leading to uncoordinated decisions on project approvals.
“The new coal-fired power generation capacity in key areas for air pollution has not been strictly controlled, which has led to what should be built not being built. which shouldn’t be, “Reuters said citing the report.
Inspectors cited divisions within the NEA and the inability to implement “Xi Jinping’s reflections on ecological civilization.”
“Some comrades of the National Energy Administration believe that the most important thing in the energy sector is to secure the supply.” These officials have raised concerns that environmental requirements will increase costs for the industry, inspectors said.
Other officials have reportedly said the industry was “not yet qualified” to meet environmental requirements. Still others argued that the problems in the energy sector were caused by other agencies or localities, CEIT said.
The result is that “coal-fired electric installations continue to increase in 12 provinces (and provincial-level municipalities), and the energy industry is more intensely distributed in key areas for the prevention and control of air pollution, ”the report says.
CEIT ordered the NEA to formulate a “rectification plan” and submit it to the Communist Party of China (CPC) Central Committee and the Cabinet-level State Council within 30 working days.
The deadline appears to coincide with the start of China’s annual legislative sessions in early March and the possible presentation of the government’s 14th five-year plan for 2021-2025. The timing may indicate that decisions regarding the NEA have already been made.
In a Carbon Brief interview, Daniel Gardner, a history professor at Smith College and an expert on Chinese environmental affairs, suggested that the agency’s existence may be at stake.
“This is strong and unambiguous censorship by the NEA, which makes me wonder if the ground is being set up to reduce its authority or, perhaps, even to eliminate completely the agency and shift its administrative responsibilities elsewhere, ”Gardner said.
By publicly breaking the whip of the NEA, the watchdog group also underlined its authority as a direct report to Deputy Prime Minister Han Zheng, a member of the powerful Politburo.
The NEA has been the target of several crackdowns on corruption. Most notably in 2019, Nur Bekri, described as an architect of China’s coal policy, was sentenced to life imprisonment for corruption after leading the NEA from 2014 to 2018.
But the CEIT report and the sequence of events may raise questions about who is really responsible for decisions about building new coal plants.
The NEA is subordinate to both the State Council and the National Development and Reform Commission (NDRC), the main planning agency of the central government.
The green light for new coal projects may have been the product of government policy rather than the exclusive responsibility of the NEA.
“This is mainly a problem at the NEA / NDRC level, but also at the provincial and local levels, which is a classic policy problem in China,” said Mikkal Herberg, director of energy security research at the National Bureau. of Asian Research, based in Seattle. .
The MEE does not have the power to force policy change without outside support, like that of CEIT inspectors, Herberg said. Power also rests with the NDRC, but so do policy conflicts,
“The NDRC’s number one priority above all else is always jobs and economic growth, especially during the pandemic year,” Herberg said via email.
So when things are going well, environmental goals are usually watered down or ignored when they really hamper growth, ”he said.
The conflict over political goals has been going on for years.
In a report released this month, the Global Energy Monitor (GEM) and the Center for Research on Energy and Clean Air (CREA) said that last year, “China built more than three times as much new capacity. more coal-fired power generation than any other country in the world. combined – the equivalent of more than one large coal-fired power plant per week. “
In the history of coal-fired plant approvals over the past decade, environmental groups have been warning since 2014 about the consequences of the central government’s decision to delegate approval authority for new projects to provincial and local governments in order to speed up development by reducing red tape. .
The NDRC subsequently tried to slow the wave of approvals as generator overcapacity increased and utilization rates fell to 50 percent or less.
Charcoal as a stimulant
But reports from the past year have highlighted the government’s policy of allowing more coal projects to move forward in the interest of local employment and boost the economy.
Conflicts between development and environmental policies came to a head with Xi’s surprise announcement in September that China would speed up its emissions reduction schedule, peaking before 2030 and achieving “net zero” carbon neutrality before 2060.
The progress of the past year has been hampered, first by China’s drive to secure economic recovery from the COVID-19 crisis, then by an unusually cold winter and high demand for energy.
Total energy consumption increased 3.1% last year to 7.5 trillion kilowatt hours (kWh), while thermal power generation capacity increased 4.7% to 1245 gigawatts (GW ), according to NEA data reported by Reuters.
Despite Xi Jinping’s recent promises to reduce carbon emissions, “the growth in the development of coal-fired power plants has been made possible by lax central government oversight, including the easing of restrictions on the construction of new coal-fired power plants. and permits in most Chinese provinces, ”the GEM report said.
It is not known whether the CEIT crackdown will lead to project cancellations.
Despite excess capacity, China has 247 gigawatts (GW) of new coal-fired power generation under development, with 88.1 GW under construction and 158.7 GW proposed for construction, GEM said.
The new projects are likely to prolong overcapacity for decades, turning factories into “stranded assets” that cannot pay a return on their investment.
In a November report, CREA estimated that China’s coal-fired power plant operating fleet would need to be reduced by 38 percent by 2030 in order to meet Xi’s net zero target.
“Instead, coal and power interests are pushing to increase the country’s coal fleet in the 14th Five-Year Plan …, potentially adding more than 200 GW of new coal-fired power for an estimated investment of $ 200 billion (1.28 trillion yuan), “says the GEM report.
Ultimately, conflicts over economic and environmental policies converge at the upper echelons of party and government.
“I suspect that Xi and Han … have become uncomfortable with the really bad outlook on increasing coal production and coal-fired power generation that has been highlighted by the increasingly active climate community inside and outside China, ”said Herberg.
“I would expect a bunch of coal power projects to be canceled soon,” he said.
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