Power Sector Transition in Shanxi

Introduction

Shanxi Province, located approximately 120 km west of Beijing with an area slightly larger than the US state of Georgia, has for decades been the epicenter of China’s coal industry, as well as unconventional natural gas resources in the form of coalbed and coalmine methane. Coal output rose to 1.38 billion tons in 2023, 29% of the national total and about one sixth of global output, with non-conventional methane output reaching 14.9 billion cubic meters, tops in China.

Shanxi, China is the primary source of the world’s coal mine methane emissions. The province emits roughly the same amount of coal mine methane (13.1 Mt) as the rest of the world combined (13.8 Mt). This translates to approximately 32% of China's total coal mine methane emissions.

Government and industry have already achieved significant initial results, with the province consistently ranking among China’s top five for both wind and solar generation in recent years. Combined wind and solar generating capacity and power generating have increased by 18 percent and 11 percent respectively 2021-2023 to 49.9 GW and 81.73 billion gigawatt-hours (gWh), accounting for 37.5 percent of generating capacity and 18.3 percent of actual power generation.

In the last five years, the annual growth of wind and solar energy is 24.16% and 63.22%, respectively. Furthermore, Shanxi has also planned to reutilize various space to increase the renewable energy capacity. The province will solarize its highway to add 300 MW with a total investment of around 1.4 billion yuan.

In addition, in January of 2024 China broke ground on a 55 billion yuan (USD$7.7 billion) green energy project on an old coal mining site. The project, located in Shanxi, will have 6 GW of wind and solar capacity as well as 3.4 GWh of energy storage. Plans are for this hub to be connected to Beijing via the Datong-Tianjin ultra-high voltage power line.

Symbolic Importance

Shanxi Province is endowed with some of the most abundant energy resources in China, which include coal, coalbed methane, and natural gas. In 2021, the coal production in Shanxi reached 1.193 billion tons, In 2022, the coal production in Shanxi increased to 1.307 billion tons, and is expected to reach 1.365 billion tons in 2023. The reserve capacity of unconventional natural gas accounted for 37% of the national total in 2022, which ranked as the second highest in China. Presently, Shanxi remains a crucial province for the export of fossil fuel resources. The region is home to numerous coal mines, leading to a substantial industrial and economic reliance on the fossil fuel extraction sector.

In addition to shipping the fossil fuels themselves all over China, Shanxi is also a significant electricity exporter, with external shipments rising to over 35 percent of the nearly 450 billion kWh generated in the province 2023, and extending to 23 of the country’s 31 provincial level entities. (The neighboring national capital region of Beijing – Tianjin – Hebei, the Yangzi Delta region to the southeast and the provinces due south, to all of which Shanxi is well-connected by high voltage transmission lines are the most significant customers.) Fossil fuels, in particular coal, made this possible, accounting for nearly 75% of Shanxi’s power generation in 2023.

However, the extraction of fossil fuel resources in Shanxi Province has had adverse effects on the environment and public health. Coal mining operations have led to the pollution of groundwater and surface water, rendering them undrinkable due to various harmful substances. The soil has accumulated heavy metals that pose risks to both communities and the ecosystem. Moreover, the presence of elevated levels of smoke, dust, and sulfur dioxide in the air within coal mining areas continues to be a significant concern. These impacts are long-term and are currently recovering at a slow pace, raising concerns for public health and the well-being of the region.

In Shanxi, there are also 5,479 poverty-reduction solar stations. These stations are largely concentrated in the 10 least-developed counties, and create revenue for low-income families. They are owned and operated by the villages, created 1.96 billion yuan of net income in 2020.

The energy transition is a critical opportunity for the polluted province to reverse course. Shanxi boasts significant solar and wind energy resources, with some areas already hosting operational solar and wind farms. Shanxi’s unique position of proximity to major load centers to which it is linked by well-developed transmission facilities, combined with plentiful coal power backup, offers a promising prospect for the extensive development of wind and solar energy integrated into the existing grid infrastructure.

Current System Description

Current Power Capacity Mix

As of year-end 2023, the installed capacity in Shanxi province was as follows:

Energy Source	Installed Capacity (MW)	Percentage
Coal	72,063 MW	54.2%
Natural Gas, Heat, and Steam Recovery	7,887 MW	5.9%
Hydro	2,251 MW	1.7%
Solar	24,905 MW	18.7%
Onshore Wind	24,997 MW	18.7%
Biomass	938 MW	0.7%
Total	133,041 MW	99.9%

By the end of 2022, the installed capacity in the operating system was 120.8GW, with 71,067MW from coal-fired power plants that took up 58.8% of the total. According to provincial government data, the solar installed capacity reached 17.73GW by February 2023, accounting for 14.6% of the total installed capacity and increasing by 20.12% compared to the previous year.

From January to May 2023, electricity generation from solar energy totaled 10.177TWh, marking an increase of 11.48% compared to the previous year. Wind energy contributed 23.371TWh during the same period, reflecting an increase of 26.53% compared to the previous year.

The pie chart below illustrates the electricity generation in Shanxi for 2023. Fossil fuel energy dominated as the primary source of electricity, with coal alone accounting for 333,620 GWh, or 74.8% of the province's total. Onshore wind contributed 12.2% to the mix, while solar and hydropower made up 6.2% and 0.9%, respectively. “Other Thermal” includes gas, waste heat, gas and pressure, and biomass.

Electricity Generation Mix in Shanix Province, in GWh, for 2023. Source.

Time Series: Shanxi Province Renewable Energy Capacity and Output

Year	Wind Capacity (MW)	Wind Output (MWh)	Solar Capacity (MW)	Solar Output (MWh)
2020	19,560	26,570	13,090	15,860
2021	21,233	46,920	14,577	18,948
2022	23,178	46,638	16,957	21,904
2023	24,997	54,240	24,905	27,490

Prospective Power Capacity

By July 2023, the prospective installed capacity in Shanxi province from GEM's database is as below:

Energy Source	Announced	Pre-construction	Construction	Total
Coal	4,000 MW	20,120 MW	1,400 MW	25,520 MW
Hydro	2,700 MW	18,600 MW	1,500 MW	22,800 MW
Solar	2,365 MW	14,485.4 MW	7,315 MW	24,165.4 MW
Onshore Wind	520 MW	4,041 MW	1,729 MW	6,290 MW

No prospective oil and gas plants were identified in GEM's Global Oil and Gas Plant Tracker (February 2024 release).

Renewable Energy in Shanxi

Renewable Energy Targets, and Major projects

In 2019 the World Bank reported that, "[China] piloted competitive auctions for 13 GW of solar PV to reduce costs of solar PV, and Shanxi province participated the most in the national solar PV auctions."

According to the Shanxi Province 14th Five-Year Plan, at the end of the 14th five-year round, which is 2025, the "clean energy" in the generation mix will reach 30%.

The Datong Solar Power Top Runner Base is poised to be one of the largest solar farms in the world once complete, at up to 3GW.

Table 1: Main goals for the development and utilization of renewable energy in 2025, Shanxi Province

Source: Shanxi Province 14th Five Year Plan

Table 1

Energy Type	2020	2023 (actual)	2025
1. Proportion of provincial electricity consumption originating from renewable energy
1.1 Renewable Energy	18.8%	39.1%	28.7%
1.2 Renewable Energy exclude hydropower	16.8%	37.4%	24.9%
2. Installed Capacity - predicted accordingly
2.1 Wind	19,740 MW	24,997 MW	30,000 MW
2.2 Solar	13,090 MW	24,905 MW	50,000 MW
2.3 Biomass	640 MW	938 MW	1,000 MW
2.4 Hydropower	2,240 MW	2,251 MW	2,240 MW
2.5 Percentage of the provincial total capacity	30%	39.8%	50%
3. Storage	1,100 MW		6,000 MW

In January 2023, the Shanxi government published its Action Plan of Technology Support for Carbon Dioxide Peaking 2020-2030(山西省科技支撐碳達峰碳中和實施方案（2022—2030年）).. The goal of reaching 80GW of solar and wind capacity is reiterated, with a target of 50% rooftop solar installations on new buildings. Additionally, the plan outlines a goal of achieving 120 GW of renewable energy capacity by 2030. To meet the penetration of the increased renewable energy, the province will deploy 100GW of storage capacity.

In February 2023, Shanxi Province published the Shanxi Province Promotes the Development of Distributed Renewable Energy Three-year Action Plan (2023-2025)(山西省推进分布式可再生能源发展三年行动计划(2023—2025年)). The plan outlines solar targets for different sectors by 2025, including 500MW from agricultural facilities, 1,500MW of distributed solar from transportation-related facilities, 1,000MW of rooftop solar from public buildings, and 1,000MW of distributed solar demonstration projects on various rooftops. For the wind energy target, the plan aims to achieve 1,000MW from vacant and idled lands by 2025.

Shanxi encourages New Energy Sources to establish storage capacity for participation in the electricity trading market. By 2023, New Energy Source Projects in Datong, Shuozhou, Xinzhou, and Yangquan cities are required to deploy 10%-15% of storage capacity concurrently with the installed capacity.

In 2020, the first distributive solar on the highway service area in Shanxi, with an installed capacity of around 0.4MW, was connected to the grid, generating 0.65GWh annually. By the end of 2020, the total generation from distributive solar on highway facilities reached 13GWh for the year.

Additionally, most cities in Shanxi province formulated their renewable energy targets at the city level:

Datong City

In 2021, New Energy Sources in Datong City reached 6,280 MW, constituting 42% of the provincial total. This equals 830 GWh of electricity generation, representing 17.3% of the provincial total. Solar energy had the highest installed capacity among these sources in Shanxi. The 14th Five-Year Plan published by Datong City outlines its energy target for 2025 in more detail:

Energy Sources	2021	2025(target)
Coal production	Reduce coal production by 31.4 million tons	Coal production capacity: 130 million tons, Coal production amount: 120 million tons
Fossil Fuel installed capacity		10,000MW
New Energy Sources installed capacity	6,280MW	Solar: 10,000MW Wind: 6,000MW

Datong previous coal mine surface subsidence areas

Datong previous coal mine surface subsidence areas - National advanced technology photovoltaic demonstration base(山西大同采煤沉陷区国家先进技术光伏示范基地) with 200.72km2 scale of land and 1,000MW operating capacity in total.

Coal Mine Area	Solar Project	Installed Capacity(MW)	Status
Datong previous coal mine surface subsidence areas - National advanced technology photovoltaic demonstration base (山西大同采煤沉陷区国家先进技术光伏示范基地)	Shanxi Datong Yungang Coal Subsidence Area solar farm	50	Operating
	Shanxi Province Datong Gaoshanzhen Xiaoyaotou solar farm	100	Operating
	Shanxi Province Datong Yungang Gaoshan Nanyanglu solar farm	100	Operating
	Shanxi Province Datong Yungang Mayingwa solar farm	50	Operating
	Shanxi Province Datong Yungang Sandaogou solar farm	50	Operating
	Shanxi Province Datong Yungang Wutaiwan solar farm	50	Operating
	Shanxi Province Datong Yungang Xinwangzhuang solar farm	100	Operating
	Shanxi Province Zuoyun Caojiagou solar farm	100	Operating
	Shanxi Province Zuoyun Mingyang solar farm	50	Operating
	Shanxi Province Zuoyun Qinjiashan solar farm	100	Operating
	Shanxi Province Zuoyun Shuiyao solar farm	100	Operating
	Shanxi Province Zuoyun Tashan Jiajiagou solar farm	100	Operating
	Shanxi Province Zuoyun Dianwanzhen Dongtiaojian solar farm	50	Operating

Luliang City

The operating installed capacity from Luliang City accounted for 10.3% of the provincial total in 2021. Following the publication of the Shanxi Province 14th Five-Year Plan on energy targets, Luliang City also projected its renewable energy needs until 2025 to align with the provincial goals:

Energy Type	Installed capacity in 2020	Target of Installed Capacity in 2025
Coal	6,739MW(68.06%)	10,220MW(39.19%)
Solar	2505MW(25.3%)	7,691MW(29.5%)
Wind		6,521MW(25.05%)

• Major renewable energy project in the city: Shanxi Province Jiaokou Shuitouzhen solar farm (山西省吕梁市交口县300MW光伏平价项目) with 300MW in operation.

Taiyuan City

The City published the "Taiyuan City’s “14th Five-Year Plan” Energy Development Plan (2021-2025)" to formulate the energy targets in 2025:

Energy Source		2020	Targets in 2025
Coal		5,210MW	5.830MW
Gas		2,010MW	1,720MW
New Energy Sources	Wind	340MW	1,200MW
	Solar	520MW	1,600MW
	Hydro	28.8MW	30MW
	Biomass	149MW	200MW

In 2020, there were 53 coal mines, collectively producing 73.85 million tons of coal annually. The goal for 2025 is to reduce the number of coal mines to 50 while maintaining a production of 72 million tons per year. Of these 50 mines, 41 will be actively producing coal, contributing to a total production of 63 million tons per year.

To support the coal mines, the plan includes the implementation of a 110 kV transmission network in the coal mining area. Additionally, there will be an expansion of transmission capacity with the addition of one 35 kV substation and six 10 kV substations, with a combined loading capacity of 4.43 megavolt-amperes (MVA).

Yuncheng City

In 2020, the installed capacity from renewable energy in the city reached 41.2%. The city published its 14th five Year Plan in the same year and mentioned the renewable energy target by 2025:

	2020	2025(target)
Solar	1,400MW	2,000MW
Wind	2,000MW(19.2% of the city's total generation)

Yangquan City

Yangquan is the poorest and the smallest city in Shanxi, and it is one of the earliest cities in the province to engage in the coal mining industry. The city's economy has long been dominated by coal. From 1949 to 2019, the city exported 2.1 billion tons of coal to other provinces. Due to its extensive history of coal extraction, Yangquan is currently facing coal exhaustion, leading to a large area affected by coal mining subsidence. Meanwhile, the city exhibits significant potential for solar energy. The government has, therefore, implemented a solar deployment policy in the coal subsidence area. In 2023, the installed capacity of unconventional energy in the city reached 2,219 MW, constituting over 30% of the total installed capacity. Wind and solar are the primary sources of these unconventional energy types.

Yangquan City's Renewable Energy Target in the 14th Five-Year Plan5:

Energy Source	2025(target)
Wind	1,400MW
Solar	6,000MW

Yangquan City previous coal mines surface subsidence areas

Yangquan City previous coal mines surface subsidence areas - National advanced technology photovoltaic demonstration base, 2016 projects(山西阳泉市采煤沉陷区 - 国家先进技术光伏发展示范基地, 2016年项目), with 4569.91km2 scale of land and operating capacity of 950MW in total.(Global Energy Monitor: 800MW)

Coal Mine Area	Solar Project	Installed Capacity(MW)	Status
Yangquan City previous coal mines surface subsidence areas - National advanced technology photovoltaic demonstration base 2016 projects (山西阳泉市采煤沉陷区国家先进技术光伏发展示范基地2016年项目)	Shanxi Province Yangquan Hedizhen Xiaogou solar farm	100	Operating
	Shanxi Province Yangquan Hedizhen Xiaoxizhuang solar farm	100	Operating
	Shanxi Province Yangquan Pingding Longzhuang solar farm	50	Operating
	Shanxi Province Yangquan Pingding Shimenkou solar farm	100	Operating
	Shanxi Province Yangquan Yijingzhen solar farm	50	Operating
	Shanxi Province Yangquan Yuxian Jiajianao - Zhaojianao solar farm	100	Operating
	Shanxi Pingding Shimenkou Three Gorges solar farm	100	Operating
	Shanxi Province Yangquan Pingtanzhen solar farm	50	Operating
	Shanxi Province Yuxian Sunjiazhuang Liujiapo solar farm	100	Operating
	Shanxi Province Yuxian Xianrenxiang Donghuili solar farm	50	Operating

Changzhi City

From January to October 2022, electricity generation from "New Energy Sources" totaled 2,846 GWh. The installed capacity reached 2,310 MW, equivalent to 19.2% of the total capacity in Changzhi City. The energy goal is to increase the capacity from "New Energy Sources" by 10,529 MW during the 14th five-year (2021-2025) period. By 2025, it is anticipated that solar and wind energy will account for 50% of the electricity generation in Changzhi City.

New Energy Sources	2022	2025(target)
Installed Capacity	2,310MW	10,529MW
Electricity Generation	2,846GWh	50% from solar and wind

Shuozhou City

Energy target in 14th Five Year period

Energy Source	2020	2025(target)
Total	15,109.2MW	32,000MW
Coal	9,250MW(61.22%)	16,000MW(50%)
Wind	4,963.2MW(32.85%)	16,000MW(50%)
Solar	842MW(5.57%)
Biomass	54MW(0.36%)
Storage		3,000MW(3.6GWh)

In 2020, coal production in Shuozhou city reached 173 million tons per year. Currently, there are 64 coal mines in Shuozhou, with an annual production of 196 million tons, making it the third-largest coal production city in China and the foremost in Shanxi Province. The city is aiming to achieve a production target of 200 million tons per year by 2025.

Major renewable energy projects in the city are

• Shanxi Shanyin Mined-Out Area Management Solar/Storage/Hydrogen complex(山阴县100MW采煤沉陷区生态综合治理+光伏储氢基地项目) with 100MW in pre-construction stage.
• Shanxi Pingshuo Mining Area solar farm (中煤平朔集团有限公司平朔矿区 200MW光伏发电项目) with 160MW in pre-construction stage.

Jinzhong City

The installed capacity from "New Energy Sources" will be doubled in 2025, reaching 40% of the total capacity in Jinzhong City.

The major renewable energy project in the city is Shanxi Lingshi Yuqing Mined-Out Area solar power plant (灵石庆余采煤沉陷区100MW光储+矸石山生态治理一体化项目工程(EPC)总承包项目) with 100MW in construction.

Xinzhou City

The city has set a target to add 1,000 MW of newly installed capacity from distributed renewable energy sources by 2025. This capacity will be allocated across various sectors, with a focus on distributed solar power:

Energy Source	Deployment Location	2025(target)
Solar	Agricultural Facilities	50MW
	Transportation Facilities	100MW
	Newly constructed public building	50MW
	Roof-top demonstration sites in Yuanping City, Wutai County, and Yifu District in Xinzhou City	110MW
Wind	Idle lands in agricultural towns	110MW
	replacement and upgrade of old wind farms within the city.	200MW

Jincheng City

Jincheng City stands at the forefront of China's coalbed methane sector, boasting the nation's most significant production of anthracite and coalbed methane.

Potential of Renewables

The specific photovoltaic power output in Shanxi province is estimated to be 3.34 - 4.59 kWh/kWp, according to Global Solar Atlas. Shanxi, China, Global Solar Atlas, Retrieved on Sep 25 2023.

Potential impacts from renewables expansion

Projects like the Datong Solar Power Top Runner Base are controversial, with rumors of force Uygur labor being used. Hundreds of cases of forced child labor for electronics production come from Henan, Shanxi, and Sichuan provinces, as recorded by the U.S. Bureau of International Labor Affairs in 2022.

Fossil Fuel in Shanxi

Fossil Resources and Retirement

In the first half of 2023, enterprises in Shanxi achieved a coal production of 678 million tons, accounting for 29.48% of the nation's total coal production. This marks the third consecutive year that they have held the top position in coal production in China. Shanxi and Inner Mongolia collectively produce more than half of China's total coal output, with Shanxi's coal mine capacity reaching approximately 1,226 Mtpa. Interestingly, Shanxi lacks proposals for mega-scale coal mining projects that are seen elsewhere across the country, and Inner Mongolia is on track to surpass Shanxi as the country's largest coal producer.

In 2022, Shanxi then signed long-term contracts with 620 million tons of thermal coal in total to supply 24 provinces.

The historical trend on the production of coal in Shanxi is as the chart below. Today, according to Global Coal Mine Tracker, there are 679 operational coal mines producing 1.3 billion tonnes in 2023, while two are cancelled, six mothballed, and six shelved, but still 46 coal mines are proposed. 80% of proposed coal projects in Shanxi are under construction.

China's Coal Production in Shanxi Province from Jan 1993 to Nov 2023

In January 2023, the Shanxi government published its Action Plan of Technology Support for Carbon Dioxide Peaking 2020-2030 (山西省科技支撐碳達峰碳中和實施方案（2022—2030年）) In this provincial plan, several targets for coal reduction and the energy system were outlined:

1. By 2025, the provincial government aims to reduce the average coal consumption rate for electricity supply to at least 300g of coal per kWh at the provincial level. (The national average rate was 302.3g/kWh as of July 2023)

2. By 2025, the plan includes phasing out old, inefficient coal mines, increasing the average production for each coal mining well to 1,750 thousand tons per year, and reaching a total number of coal mines of 820 (there were approximately 703 in Shanxi as of the end of December 2021)

By 2025, Shanxi plans to establish five carbon-neutral coal mines with a 20% reduction in emissions compared to the 2020 level, ultimately achieving zero emissions by 2030.

Coalbed Methane

Shanxi contains rich fossil fuel resources, including coalbed methane. As of 2020, the cumulative proven reserves of coalbed methane in the region stood at 660.128 billion cubic meters, representing 90.94% of the national total.

In June 2023, the production of coalbed methane in Shanxi reached 880 million cubic meters, accounting for 81.5% of the total coalbed methane production in China during the same period. Up to the first half of 2023, the accumulated coalbed methane extracted in Shanxi reached 5.24 billion cubic meters, setting a new historical record for that period.

Presently, Shanxi maintains an annual coalbed methane production of at least 20 billion cubic meters, catering to both provincial demand and export as natural gas.

By 2025, Shanxi aims to have extracted 20 billion to 25 billion cubic meters of coalbed methane, according to the province's 14th five-year development plan for 2021 to 2025.

Impacts from fossil fuel

The extraction of coal resources can lead to a deterioration in both the quantity and quality of groundwater, while open-pit mining can result in pollution affecting land, rivers, vegetation, households, and more. In 2015, field research conducted using remote-sensing images in Shanxi revealed that the heavily subsided area covered 1,099 km², abandoned coal mines spanned 3,362 km², and the subsidence area alone accounted for 960 km².

In the closed coal mines area, there is an issue of water leakage, and the water resources within these coal mines contain various chemical substances. An analysis of the Xishan Mining area indicated that the pH value ranges from 2.28 to 5.26, sulfate ion (SO42-) levels range between 1,002 to 13,000 mg/L, iron (Fe) concentrations vary from 213 to 457 mg/L, and manganese (Mn) levels fall within the range of 23.2 to 34.3 mg/L. Overall, the data reveals that the water is highly acidic and contains elevated levels of iron, manganese, and sulfate ions, raising concerns about its suitability for drinking water purposes.

In 2015, the pollution from coal mines impacting rivers had shown improvement compared to the situation a decade earlier, when polluted water bodies spanned a length of 3,753 km in 2005. However, in 2015, there were still 32 water bodies comprising a total of 344 km of surface water systems experiencing issues such as water losses and interrupted flows.

Heavy metals tend to accumulate in the soil in regions surrounding coal mines due to various factors, including emissions from coal combustion, dust emissions, spontaneous combustion of gangue piles, leaching, and the discharge of water from mined-out areas as a result of extraction activities. Soil quality analysis conducted in different coal mine regions within Shanxi revealed elevated values of certain heavy metals, with concentrations of As, Cd, Cr, Hg, and Pb ranging from 6.75 to 23.50 mg/kg, 0.108 to 0.450 mg/kg, 83.7 to 112.0 mg/kg, 0.080 to 0.720 mg/kg, and 17.9 to 31.7 mg/kg, respectively. These concentrations significantly exceeded the average environmental background soil values in Shanxi, indicating substantial pollution and cumulative effects resulting from coal.

In 2018, the coal mining and refining industry in Shanxi emitted a total of 8,400 tons of smoke and dust, along with an annual release of 56,000 tons of sulfur dioxide (SO2). Detrimental substances such as smoke, dust, and SO2 originating from coal mines continued to be a concern. Monitoring data from the Xishan Mining area indicated concentrations of carbon monoxide (CO) ranging from 18.13 to 167.00 mg/m³ and sulfur dioxide (SO2) densities between 1.56 to 42.00 mg/m³. Pollution remained concentrated in specific areas, despite ongoing intervention and recovery projects. The rate of recovery to environmental background values in these regions was notably slower compared to non-coal mining areas. Coal dust has been linked to pulmonary diseases, and greater exposure to coal pollution can cause silicosis, COPD, and other lung diseases.

Employment

Current employment from the fossil fuel sector

In August 2023, the number of coal mine workers in Shanxi was estimated to be around 230,000

Regarding the coal industry, Shanxi province employed over 900,000 workers in 2022. According to the Shanxi Low-Carbon Energy Development 2023 report from the Shanxi Coshare Innovation Institute of Energy & Environment, coal industry workers in Shanxi constitute more than a third of the national total. The number is five times higher than the figures in Inner Mongolia and Shaanxi, which are the second and third coal production provinces after Shanxi.

Coal Industry Workers in the Top Three Coal Production Provinces in China. Figures are cited from Shanxi, Inner Mongolia, Shaanxi Yearly Statistic Book 2018-2023

According to Global Energy Monitor, Shanxi province alone will likely lose a quarter of a million mining jobs by midcentury. Adequate alternatives for coal miners will be necessary, with projected unemployment in regions like Shanxi rising. These coal workers, half of which are over the age of 45 and 60 percent of which possess a junior middle school level of education or less, may struggle to find other employment.

Prospective employment from the renewable energy sector

Shanxi is one of the first few provinces to pilot a spot market with fluctuating prices for energy. In the past, energy prices were fixed, but now a new profession called "power trader" has emerged to calculate supply and demand and analyze market and weather conditions and find cheap or profitable sources of energy. It's much like trading stocks, but with energy instead.

Land availability

The total area of Shanxi is 156,700 km2; of that, 64,800 km2 is coal-bearing strata. In 2015, the coal mines-related area was 182.4 km2; of that, abandoned and closed coal mines were 11.8 km2.

From Global Energy Monitor's data, the coal mines in Shanxi that have been closed, mothballed, or shelved have a total land size of 81.18 km2. These retired coal mine spaces may have the potential to deploy renewable energy facilities.

Coal Resources Distribution in Shanxi Province, Shanxi Environmental Science Academe, 2018, published on China Coal

Coal Mines locations and areas in Shanxi, China.(Source: Global Coal Mine Tracker, Global Energy Monitor, 2023)

Still, there are 46 proposed and 679 active coal mines in Shanxi. The total land sizes of the proposed and active coal mines are 1,543.22 km² and 9,924.04 km², respectively.

Status	Coal Mine	Land Size (km²)
Cancelled	Shanxi Zhengbang Coal Mine	3.4267
	Shanxi Xinfeng Coal Mine
Mothballed	Shaqu No. 1 Coal Mine	70.72 km²
	Shenda Yuanning Coal Mine	5.4026 km²
	Shuozhou Shijieyu Coal Mine	6.3 km²
	Yicheng Baozi Coal Mine	7.72 km²
	Zhengxing Coal Mine	10.47 km²
	Shanxi Datong Xingwang Coal Mine
Shelved	Nanwan Coal Mine
	Shanxi Yongxing Surface Coal Mine
	Shanxi Langxing Surface Coal Mine
	Xucun Coal Mine
	Zhengfeng Coal Mine
	Zhengming Coal Mine

Civil Society Engagement

• Shanxi Coshare Innovation Institute of Energy & Environment(山西科城能源环境创新研究院) is a non-profit organization in Shanxi collaborating among governments, enterprises, academics, and social organizations on facilitating industrial green development and fulfilling carbon neutrality.
• Jinqing(山西青年环境文化交流中心／晋青) was founded in 2002 by a group of young environmental participants in Shanxi. The organization aims to support a coal phase-out future with just transition and increase environmental protection awareness and initiatives for civil society.

Governmental information

Related governmental policies and papers

In 2019, the General Office of the Chinese Communist Party and General Office of the State Council published the "Opinions on Pilot Projects for Comprehensive Reform of Energy Revolution in Shanxi"(关于在山西开展能源革命综合改革试点的意见). The paper aimed to utilize energy resources in Shanxi, including green energy, unconventional natural gas, and coal, to serve as the demonstration site for national energy development.

Since 2022, the Shanxi government published several papers on energy development. This includes:

• Shanxi Province’s Implementation Opinions on Carbon Peaking and Carbon Neutralization(山西省关于完整准确全面贯彻新发展理念切实做好碳达峰碳中和工作的实施意见) The primary objectives of this paper are as follows:

1. Achieve non-fossil fuel energy consumption of 12% by 2025 and 18% by 2030.
2. Attain a 50% installed capacity and 30% electricity generation from new and clean energy sources by 2025.
3. Ensure that the installed capacity reaches at least 60% from such sources by 2030.
4. Target a wind and solar energy installed capacity of 120 GWh by 2030.
5. Deploy a storage capacity of 10 GW by 2025, aligned with the expansion of new energy sources.
6. During the 14th Five-Year Period (2021-2025), initiate the construction of 10 pumped storage hydropower facilities
7. Complete 10 new energy project substations with a capacity of 500 kV by 2025.
8. Aim for a peak load reduction capacity of 5%-10% by 2030.

• Shanxi Province Carbon Peak Implementation Plan(山西省碳达峰实施方案)

• Implementation Plan for Carbon Peaking in Industry, Energy, Urban and Rural Construction Fields in the 1+N” Policy System(”1+N”政策体系中的工业、能源、城乡建设等领域碳达峰实施方案)

• Action Plan of Technology Support for Carbon Dioxide Peaking 2020-2030 (山西省科技支撐碳達峰碳中和實施方案（2022—2030年）

• Shanxi Province 14th Five-Year Plan

• In 2023, Shanxi Province passed the "Shanxi Province Regulations on the Promotion of Clean and Efficient Coal Utilization," marking the first-ever local regulation in China dedicated to enhancing coal efficiency and utilization.

Relevant governmental ministries and political coalitions

The Shanxi Provincial Energy Administration was founded in 2018 and governance under the People's Government of Shanxi Province.

Transmission

Current transmission resources

In terms of transmission investment, China is a global leader and spent USD$80 billion on its power grid in 2023.

In 2020, the total electricity consumption for the State Grid Shanxi Electric Power Company's operational area was 2,341 billion KWh, with a maximum provincial grid load of 3,643 MW. As of the end of 2020, the length of transmission lines at 35 KV and above was 57,511 KM, and the substation (converter) capacity was 193,646 MVA (KW).

±800kV Yenmenguan(雁门关) Converter Station is the only Ultra-High Voltage Direct Current (UHVDC) Station in Shanxi by 2023.

Shanxi State Grid comprises ultra-high voltage lines with 1000KV as the core, and 500KV as the backbone, forming the foundation of the "Three vertical and four horizontal" grid structure. Additionally, the grid incorporates 200KV lines that operate across seven districts, and 100KV lines provide support within the grid structure. Shanxi State Grid includes four transmission lines exporting electricity to other provinces. The total capacity connected to the state grid amounts to 12.1 TW, and the export capacity reaches 30.62 GW. In the first half of 2023, the province exported a total electricity generation of 7315.2TWh and ranked as the second-highest province in China.

In 2022, three 500KV substations were established in Minghai Lake, Shuozhou City, to address the issue of insufficient transmission capacity for New Energy Sources in the region.

Shanxi Province has formulated the "West to East Power Transmission Plans," consisting of seven optimization and adjustment projects. In May 2023, the Shanxi Yushe—Jinzhong transmission project was successfully completed. This transmission project originates from the 500KV substation in Yushe and terminates at the 1000KV substation in Jinzhong. It mirrors the successful model of transmitting electricity from Shanxi to the Jingjinji Metropolitan Region, encompassing all areas in Beijing, Tianjin, and Hebei, utilizing ultra-high voltage lines. The remaining "West to East Power Transmission Plans" are expected to become operational in 2024 and will play a vital role in supplying both coal and renewable electricity generation to the Jingjinji Metropolitan Region.

In 2023, the first solar and storage-powered microgrid commenced operations in Lingxi Village, Lingquan County.

On a sunny day in March 2023, the available solar capacity reached 13.8 GW, equivalent to 42.11% of the electric load in the province. This demonstrates the enormous renewable energy potential present in Shanxi.

New transmission

Action Plan of Technology Support for Carbon Dioxide Peaking 2020-2030 (山西省科技支撐碳達峰碳中和實施方案（2022—2030年）) published in January 2023 outlined to build 10 500kv substations for new energy sources in 2025, and the peak shaving capacity of the power grid reaches 5% of the peak load in 2025 and 5%-10% by 2030.

In Shanxi, there are villages located at the end of the distribution networks of 10Kv. These areas are also under conditions of poor transportation access and high forest coverage rates, which make it difficult to expand the grid to these sites. In order to raise electricity access in Shanxi, the government selected 126 villages with a total of 392 households to build Solar Storage Micro Grids. The purpose is to support the electricity demand of these villages and monitor the operation to better improve a carbon-free electricity grid.

The new transmission project, "West Electricity to East," in Shanxi, comprises seven 500 kV lines and two ultra-high voltage expansions. This construction aims to alleviate the high energy demand in the Jing-Jin-Ji region. Upon completion, it will mark the first provincial transmission system primarily supported by ultra-high voltage in the world.

Social and environmental impacts of new transmission

Shanxi is a key energy base, ensuring national energy security as the crossroads for the trans-regional power transmission lines "West to East," "North to South," and "Three Connections and Four Direct Connections." These massive transmission lines meet at the Shanxi Power Grid.

Transmission decision-makers in Shanxi worry that the transition from coal to renewables will be challenging on Shanxi's existing power grid, which is not flexible enough to "absorb" the variability of wind and solar.

Ownership

Shanxi is a province with abundant energy resources. In the "Top 500 Energy Companies Ranking in China" of the total revenue published by China Energy News, Shanxi claimed a remarkable presence with 50 companies listed, securing the highest number of companies from any province in the country.

Major owners of current fossil capacity

Jinneng Holding Shanxi Electric Power Co. Ltd is the largest parent company overseeing a combined capacity of 12,320MW in Shanxi. This includes three operating coal power plants, namely the Changzhi power station, Hejin power station, and Shanxi Houma power station, with a total capacity of 4,320MW. Additionally, the company has two power plants in the pre-permit stage, the Beixinyao power station and the Tongmei Datang power station, with a total capacity of 6,000MW.

Major owners of prospective renewables

For solar energy, China Guangdong Nuclear Solar Energy Development Co. Ltd is the largest owner of solar farms in Shanxi, with ownership of 10 operating and pre-construction solar farms, totaling 850MW in capacity. The largest owner of wind farms in Shanxi is Shanghai Sineng Investment Co. Ltd, which owns four operating wind farms and has partly announced or under-construction projects, with a total capacity of 520MW.

The massive Datong Solar Power Top Runner Base is owned by Panda Green energy.

Finance

Potential providers of wind/solar finance

China spent USD$220 billion on solar PV in 2023 and is expected to spend approximately USD$680 billion on clean energy in 2024. About 60% of all energy assets are owned by the Government of China, and public finance is generally more prevalent in China than in other emerging and advanced economies.

In China as a whole, photovoltaic companies (including production facilities) raised 380 billion yuan between 2019 and 2022. This was through capital markets, initial public offerings, private placements, and convertible bonds. From 2020 to July 2023, 164 investment and financing deals were completed in the industry, with prominent investors like IDG Capital, China International Capital's investment management arm, Hillhouse Capital and state-owned National Green Development Fund. In Shanxi, the local government plays a big role, with about 20 billion to 30 billion yuan of the 6 GW mega project budget of 56 billion yuan coming mainly from local government financing vehicles (LGFVs).

In April 2023, the Shanxi Province Wind Equipment Industrial Coalition(山西省风电装备产业联盟) was founded. Taiyuan Heavy Industry Co., Ltd. entered into agreements with six enterprises, including Huadian Shanxi Energy Company Limited and Jiangsu Jiuding Group Co. Ltd., with a total investment of 2.1 billion RMB (approximately 294 million USD at the September 2023 exchange rate) for the development of wind farms.

Under Shanxi's comprehensive reform of the energy industry, State-owned enterprises are urged to offer at least 10 percent of project equity to attract private investment. Also in 2023, Shanxi issued 30 measures to boost private investment for several areas, including access to energy.

Other

The total investment in energy industrial, green transition, and energy revolution projects in Shanxi Province amounted to 50.65 billion RMB (approximately 7.91 billion USD at the September 2023 exchange rate), constituting 14.9% of the total investment in the province. By July 2023, 88.6% of these projects have started construction.

In 2023, Shanxi successfully conducted its first Green Certificate Electricity Trading. This trading initiative involved 5,900 certificates generated from solar energy, equivalent to 5.9GW of capacity. The introduction of this trading system is expected to attract increased investment in renewable energy projects within the province.

Articles and resources

• Shanxi Provincial Energy Administration
• State Grid Shanxi Electric Company