Growth slows for China's coal-fired power sector

China commissioned 23.4 GW in thermal power capacity during the first half of 2015, new reports show.

Most of the new capacity is coal-fired, with gas- and biomass-fired plants accounting for less than one quarter of the total amount.

However, China’s power production from its thermal fleet fell in July to 365.8bn kWh, 3.1 per cent less than in the same month in 2014. According to analysts, the usual summer generation increase, driven by increased residential demand, has been counterbalanced by weak demand in the industrial sector.

Overall, capacity utilization at the nation’s thermal power plants stands at just under 50 per cent.

China’s pollution reduction efforts combined with its climate targets, including a planned annual 0.7 per cent reduction in coal use per unit of generated power, have put pressure on major cities and industrial regions to cut their coal power production, creating financial problems for power producers and oversupply issues for the nation’s coal mining sector.

In July, production from China’s coal mines was cut in order to avoid further losses due to low prices. Output fell by 3.1 per cent on 2014, to 307m tonnes, while over 70 per cent of coal mining companies posted losses in H1 2015 according to figures from the National Development and Reform Commission.

In line with its climate agreements, China has banned new coal power plants in its three key industrial regions around Beijing, Shanghai and Guangzhou, which host one third of its operational coal-fired capacity. Beijing's planning authority aims to replace its four existing coal plants with gas-fired plants by 2017.

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