In China about 150GW of new coal plants will likely be completed over the 2016- 2018 time frame. The plants are being built because lower coal prices (half what they were) and relatively fixed tariffs, low capital costs and outstanding thermal efficiency make the plants look very profitable – but only if they get enough capacity utilization.In the very short term power demand in China has started growing again, and some heavy industries including aluminium (the largest consumer of electricity) are seeing higher prices, incentivising higher production.In the medium term, even with electricity consumption growth of 4% in China, perhaps at the higher end of a reasonable range, it’s likely there will be significant oversupply of generation. Oversupply will be increased by the ongoing build out of new renewables. This will lead to strong pressure on industry profits.
Source: Thinking global: China’s coal-fired energy conundrum : Renew Economy
Categories: Electricity, Energy