China will continue to build coal-fired power plants until 2027

China plans to continue building coal-fired power plants until 2027 in regions where they are needed to meet peak electricity demand or stabilize the power system. This is stated in the published government directives on the modernization of the coal power system, Reuters reports.

The guidelines issued by the state planner and energy regulator state that newly built coal-fired power plants should have carbon emissions that are 10-20% lower per unit of capacity than the 2024 fleet. In addition, the directives call for the modernization of some existing facilities to meet these conditions.

Newly built and modernized coal-fired power plants should also be able to adjust their capacity to meet peak demand.

Such a course could call into question China’s commitment to gradually reduce coal use in 2026-2030. However, the directives state that new coal projects are a backup source to renewable generation.

As a reminder, China is expanding its emissions trading system to include the steel, cement, and aluminum industries. This means that another 1,500 companies will have to buy carbon credits to cover their emissions. This will bring the total amount of carbon dioxide emissions covered to 8 billion tons, which is more than 60% of the country’s total. Launched in 2021, China’s emissions trading system previously covered only the power sector,