Risk of Overcapacity for Coal-Fired Power Needs to Be Abated. National Energy Administration “Slams

　　The original link：http://news.315.com.cn/20160426/100685941.html

On April 25, National Energy Administration announced on its website that the meeting held previously on phone and television aiming to promote an orderly development of coal-fired power will implement 4 previously-released documents by National Development and Reform Committee (NDRC) and National Energy Administration that are associated with developing coal-fired power.

Director of National Energy Administration Nuer Baikeli pointed out at the meeting that guidance of the national electricity planning would be strengthened. The coal-fired power projects approved by provinces (autonomous regions and municipalities) should be included into the electricity development program made in accordance with the goal of the country’s total volume control. For those not included must not be approved. The provinces with power surplus after balanced and measured in electricity volume, and the key areas for air pollution prevention and control shall not be allowed in principle for arrangement of newly-added coal-fired power planning and construction scale.

25 Provinces received a red warning in the coal-fired power construction and planning

In order to eliminate excess capacity of coal-fired power, NDRC and National Energy Administration had previously issued four relevant documents - "Notice on promotion of an orderly development in China’s coal-fired power", "Notice on establishment of a risk warning mechanism for coal-fired power planning and construction, and on issuance of risk warning for 2019 coal-fired power planning and construction", "Notice on further improving backward capacity elimination work in coal-fired power industry" and "Work program on supervision of coal-fired power project planning and construction”.

Nuer Baikeli said the orderly development of coal-fired power needs to be guided by planning in order for the power construction, by adapting actively to clean energy restructuring and optimizing the growth of clean coal-fired power, to avoid vicious competition and excessive development.

He further said it needs to guide a rational development of coal-fired power by establishing a risk warning mechanism. The current research has studied establishment of a risk warning mechanism for coal-fired power planning and construction, based on the economical efficiency of coal-fired power construction, local coal-fired power installed capacity adequacy and resource constraints. The mechanism will make a risk warning at three levels in accordance with red, orange and green.

The risk warning indicators for coal-fired power planning and construction include construction economical efficiency indicators, installed capacity adequacy indicators and resource constraints indicators, with each indicator divided into red, orange and green for early warning. The final warning result uses the highest level among the three indicator warning results. For red warning, local governments should suspend approval of coal-fired power project, and enterprises shall be careful in making decisions on project construction. Projects in construction need to make a reasonable timing order fro construction and being put into operation.

National Energy Administration has released the 2019 risk warning alert by province on coal-fired power planning and construction. It is suggested that based on the warning level, local governments and power generation companies shall scientifically control the coal-fired power project planning and construction to avoid excessive installed capacity.

Previously, Head of Power Division at National Energy Administration Han Shui explained and said it should speed up eliminating backward capacity in coal-fired power industry and promote industrial structural optimization by seizing the favorable opportunity currently with more loose supply and demand for power. The results of 2019 warning, issued this year, show that 25 provinces acrossChinareceived a red warning, the most severe one in the warning degree.

Accelerating eliminating backward coal-fired power capacity

According to National Energy Administration, it needs to raise the standards on coal-fired power elimination, and strengthen eliminating backward capacity. In accordance with the elimination standards, policies, measures and work requirements that have been made clear in the "Notice on further improving the work of backward capacity elimination in coal-fired power industry", it needs to accelerate eliminating backward capacity, promote transformation and upgrading of coal-fired power, and improve quality and efficiency.

In the actual implementation, "three batches" need to be realized to push orderly forward the coal-fired power planning and construction. The provinces with redundant power after balanced and measured in electricity volume shall adopt the measures of "cancelling a batch, suspend approving a batch and suspend building a batch”, to appropriately slow down the existing inclusion planning and approval for the planning and construction of coal-fired power projects in construction. The coal-fired power projects in old revolutionary base area and contiguous poor area are excluded.

It needs to cancel the unapproved coal-fired power projects in 2012 and the unapproved coal-fired power projects included into the planning before 2012, with the corresponding scale rolled into the local power volume balance in future, which will be gradually re-arranged after 2018 by combining power supply and demand situation. 13 provinces (autonomous regions) including Heilongjiang, Shandong, Shanxi, Inner Mongolia, Jiangsu, Anhui, Fujian, Hubei, Henan, Ningxia, Gansu, Guangdong and Yunnan shall suspend approving coal-fired power projects for self-use by the end of 2017, except for thermoelectricity projects for livelihood.

For the coal-fired power projects for self-use, 15 provinces (autonomous regions) including Heilongjiang, Liaoning, Shandong, Shanxi, Inner Mongolia, Shaanxi, Ningxia, Gansu, Hubei, Henan, Jiangsu, Guangdong, Guangxi, Guizhou and Yunnan shall suspend construction of the projects having not yet started building by the end of 2017, except for thermoelectricity projects for livelihood. The projects in construction need to appropriately adjust the construction period for a good production pace.

Director of NDRC Energy Research Institute Han Wenke thinks that the backward capacity of 20 million kilowatts need to be eliminated during “The 13^th Five-Year Plan”, proposed in the documents, is mainly for the backward units, not for the new ones. So 20 million kilowatts is an achievable objective after research and measurement.