China's Restrictions on Development of Coal-Fired Power Capacity

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In 2016, China's National Energy Administration and National Development and Reform Commission began issuing a series of restrictions on coal-fired power development in the country. The restrictions followed a large permitting boom that began when control over permitting was devolved from the central government to the provinces in late 2014.

The table below lists the series of measures that define the scope of the restrictions.

Table 1. Summary of Restrictions on New Coal-Fired Power Capacity

Date	Policy No.	Rule	Link
March 17, 2016	NDRC Energy [2016] 565 / 发改能源 [2016] 565号	China's National Development and Reform Commission (NDRC) released guidelines for regulating coal power development to crack down on the severe and growing coal power overcapacity crisis. The guideline states: 1) cancel permitting for unqualified coal power projects, 2) 13 provinces and regions should “strictly control” new coal capacity and delay the approval of new projects until after 2017, 3) a slightly longer list of provinces - 15, with considerable overlap - were told to put off construction of approved coal projects that had not yet broken ground. 13 provinces that should suspend new approvals through 2017: Anhui, Fujian, Gansu, Guangdong, Heilongjiang, Henan, Hubei, Inner Mongolia, Jiangsu, Ningxia, Shandong, Shanxi, and Yunnan. 15 provinces that should half initiation of new construction through 2017: Gansu, Guangdong, Guangxi, Guizhou, Heilongjiang, Henan, Hubei, Inner Mongolia, Liaoning, Jiangsu, Ningxia, Shaanxi, Shandong, Shanxi, and Yunnan.
March 17, 2016	NEA Electricity [2016] 42 / 国能电力 [2016] 42号	Traffic light system: along with the NRDC guidelines, China's National Energy Administration (NEA) released the Coal Bubble Alert System on the same day, dubbed the ‘traffic light’ system. The System introduces a coal power planning risk management mechanism for provinces based on three factors: 1) the profitability of their coal-fired generation, 2) their existing coal capacity, and 3) their "resource constraints," such as water availability and air quality. Based on these three factors, each province was assigned a color to signify the viability of their coal pipeline. Red means no new coal projects should be permitted. Orange indicates local governments and coal companies should tread carefully. And green indicates space for new coal. The notice designated 26 provinces as red light areas, one as orange (Hubei), and three as green (Jiangxi, Anhui and Hainan).
March 17, 2016	NDRC Energy [2016] 565 / NEA Electricity [2016] 42	Exemptions to NRDC 565 and NEA 42: Combined heat and power (CHP) plants for residential heating and power, projects in "coal power bases" exporting power to other provinces, and projects supporting poverty reduction in revolutionary areas and poor areas are exempted from the guidelines.
April 2016	NDRC Energy [2016] 855 / 发改能源 [2016] 855	Phase out outdated coal power capacity: NDRC and NEA guidelines to accelerate the retirement of outdated coal-fired plants that use older, dirtier technology. There was 28 GW outdated coal-fired power capacity phased out in the 12th Five-Year-Plan (2010-2015) period. The national target for outdated coal power retirements for the 13th FYP period (2016-2020) is 20 GW. All provinces should set a retirement target for the 13th FYP by evaluating for retirement all small units ranging from 50 MW to 300 MW capacity that cannot meet emission and energy consumption limits after retrofit.
September 13, 2016	NEA Electricity [2016] 244 / 国能电力 [2016] 244	NEA cancels 15 new coal projects (totaling 26 units, 12.4 GW) in nine provinces.
October 10, 2016	NEA Electricity [2016] 275	NEA released supplementary guidelines to those released in March 2016. The supplementary guidelines suspended construction that began in 2016 or later to all provinces that have a red light under the traffic light system, if the plants are for province "self-use" (i.e. the power will be used within the province and not exported outside the province). It also ordered projects in coal power bases that were designed to export power to other provinces to "scale down" to about half of the planned capacity within 2020. CHP plants for residential heating and power are exempted, as well as projects in poor areas and national demonstration projects.
October 16, 2016	NEA Electricity [2016] 282 / 国能电力 [2016] 282	NEA targets to retire 5 GW outdated coal power capacity in 2016.
November 7, 2016		China's 13th Five-Year Plan placed a cap on coal power capacity of 1,100 GW in 2020. About 150 GW of approved and under construction coal power projects will need to be cancelled or postponed to meet the 1,100 GW cap by 2020.
January 16, 2017		To help meet the coal capacity limit set out in China's 13th Five-Year Plan, NEA sent letters to 13 provinces to enforce the suspension of over 100 specific coal plants under planning or construction, totaling nearly 100 GW of capacity. In the letters, it said the projects included should be postponed to the 14th Five Year period (2021-2025). The NEA also put “scale control” limits on the amount of coal capacity that can be exported from particular power base areas, expanding on the October 10, 2016 NEA 275 policy.
April 20, 2017	NEA Electricity [2017] 106 / 国能电力 [2017] 106	China's NEA updated its March 2016 "traffic light" system. Under the update, 24 provinces were issued a red light, four orange (Anhui, Henan, Hubei, Jiangxi), and two green (Hainan, Hunan).
August 3, 2017	NDRC Energy [2017] 1404 / 发改能源 [2017] 1404	In July the NEA released the "Guideline of Supply-Side Reform of the Coal Power Bubble". The Guideline included a draft list which slowed down or halted 185 coal-burning units across 21 provinces, totaling 107 GW. 114 coal units (65 GW) are ordered to slow down the construction progress during 2017 to 2020, and are not allowed to connect to the grid in 2017. In addition, 71 coal units (42 GW) were halted indefinitely for regulation violations. The list partly overlapped with the projects listed in the January NEA letter to 13 provinces.
September 26, 2017	NDRC Energy [2017]1727 / 发改能源 [2017] 1727	After political negotiations over the plants listed in NRDC 1404, NEA released an updated list of postponed and halted coal projects. The new list contained 151 units totaling 93 GW.
August 7, 2017	NEA Electricity [2017] 45 / 国能电力 [2017] 45	NEA targets to retire 4.7GW of outdated coal power capacity in 2017.
May 31, 2018	《2021年煤电规划建设风险预警》	China's National Energy Administration (NEA) updated its ‘traffic light’ system. In 2018, six provinces were issued a green light (Anhui, Hainan, Hubei, Hunan, Jiangxi, and Shaanxi), and three provinces (Liaoning, Hennan, and Sichuan) were issued an orange light.
March 27, 2019	《国家能源局关于发布2022年煤电规划建设风险预警的通知 国能发电力〔2019〕31号	China's National Energy Administration (NEA) updated its ‘traffic light’ system. In 2019, 15 regions were issued a green light (Chongqing, Guangdong, Guangxi, Guizhou, Hainan, Hubei, Hunan, Jiangxi, Qinghai, Sichuan, West Inner Mongolia, Yunnan, and the non-major areas of Hebei North, Hennan, and Shaanxi). Two provinces (Fujian and Liaoning) were issued an orange light. All others are red.
February 26, 2020	国家能源局关于发布2023年煤电规划建设风险预警的通知	China's National Energy Administration (NEA) updated its ‘traffic light’ system. In 2020, 19 regions were issued a green light (Chongqing, Fujian, Guangdong, Guangxi, Guizhou, Hainan, Hubei, Hunan, Inner Mongolia, Jiangxi, Liaoning, Qinghai, Sichuan, Yunnan, and the non-major areas of Hebei North, Hennan, Shanxi, Shaanxi, and Shandong). Three provinces (Heilongjiang, Jilin, and Xinjiang) were issued an orange light. All others are red.

Scale Control in Inner Mongolia, Ningxia, Shanxi, Shaanxi, and Xinjiang

China's central planners in the National Energy Administration created controls on particular "sending out" locations that feed ultra-high voltage (UHV) long-distance power lines. There are six such locations: Inner Mongolia (Xilingol), Inner Mongolia (Ordos), Shaanxi, Ningxia, Shanxi, and Xinjiang. Overall, the effect of the policies is to scale down the amount of coal-fired capacity in the regions by about half of the planned capacity, with development ceased on all excess capacity through 2020.

As of June 2018, all power bases appear to be meeting the scale control limits except for four, listed in the table below, totaling 9,300 MW of excess coal-fired capacity:

Transmission Line	Power Base	Province	Capacity allowed (MW)	Capacity moving forward (MW)	Excess capacity (MW)
Western Mongolia-Tianjin	Ordos	Inner Mongolia	3300	5280	1980
Shanghai Temple-Shandong	Ordos	Inner Mongolia	4000	6000	2000
Yuheng-Weifang	Northern Shaanxi	Shaanxi	2660	4000	1340
Eastern Ningxia-Zhejiang	Eastern Ningxia	Ningxia	5300	9280	3980

Projects that may violate the restrictions

The following projects appear to be moving forward in permitting, construction, or operation despite being told to either postpone or stop development by China's National Energy Administration and/or China's National Development and Reform Commission.

Henan province

• Henan Xin'an power station IV, 2 x 600 MW - Construction on the power station began in August 2016. In October 2016 the NEA released NEA Electricity [2016] 275, which states red light provinces, such as Henan, should suspend construction that began in 2016 or later. A July 2017 article in Xin'an County News reported construction on Xin'an IV coal plant was ongoing, although Planet satellite images through March 2018 show limited construction progress.

Inner Mongolia

• Chuangyuan Smelter power station Units 4-6 - the units were ordered in September 2017 to stop development indefinitely due to permit violations, however satellite photos show construction continued on units 4-6 immediately after the suspension, and has continued through June 2018.

• Huolinhe Zhanute power station unit 5 - Based on satellite data through May 2018, unit 5 continued to operate after ordered to stop operations indefinitely for permit violations in September 2017.

Shaanxi

• Linyou Waste Coal power station Units 1-2 - These units were on a list of units told to postpone development indefinitely in September 2017 for regulation violations, however Planet satellite photos from July 2017 to May 2018 suggest construction is ongoing at a rapid pace, with the coal plant near completion.

• Shangluo power station, 2 x 660 MW (Units 1-2) - Shangluo power station Units 1-2 are among the coal-burning units ordered to stop construction indefinitely in September 2017 due to permit violations. Satellite photos from July and November 2017 show that construction continued after the suspension, and has continued through June 2018.

Shandong

• Shandong Weiqiao Group - In 2018, China's Environmental Protection Inspection Group 3 issued a report saying Shandong Weiqiao Group illegally built 45 coal power units in Shandong since 2013. In May 2018, the Shandong Provincial government responded to the inspection report with a plan to address the violations. According to the province, 33 of Weiqiao's 45 illegally built coal power plants had since completed the necessary procedures to receive environment clearance and continue operating; 12 units did not complete any procedures and should stop construction and operation immediately: the eight-unit Weiqiao Zouping-1 power station and the four-unit Weiqiao Zhanhua power station.

• Huadian Laizhou power station, Units 3-4 - Construction on units 3-4 began in May 2016. In October 2016 the NEA released NEA Electricity [2016] 275, which states red light provinces, such as Shandong, should suspend construction that began in 2016 or later. A January 2018 news article stated construction is ongoing at the power station.

• JV County Fengyuan Cogen power station, 2 x 350 MW (Units 5-6) - The project's EIA was rejected by the Shandong Provincial EPA in January 2017. Despite lacking a permit, in April 2017 there was news that construction had begun on the power station. In August 2017, the project was fined 300,000 RMB (US$45,000) for its violation of EIA procedures. Planet satellite imagery through April 2018 suggests the plant is nearing completion. Its sponsor Haoyu Materials Group was also fined by the Provincial EPA in 2014 and again in 2016 for pollution problems at its facilities.

• Xinyuan Aluminum power station, 9 x 660 MW, Units 1-9 - All nine units of this power station were constructed without a permit. Units 1-6 were commissioned in 2015-6, and units 7-9 are under construction. In September 2017 and May 2018 China's MEP ordered owner Xinfa Group to stop all operation and development at the plant for permit violations, but Planet satellite images through June 2018 show the plant continues with both operation and construction.

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