Publication Type
Journal Article
Version
acceptedVersion
Publication Date
1-2023
Abstract
Coal-fired power plays a critical role in China's compliance with the Paris Agreement. This research quantifies China's stranded coal assets under different coal capacity expansion scenarios with an integrated approach and high-precision coal-fired power database. From a top-down perspective, firstly, the pathway of China's coal-fired power capacity consistent with the global 2 degrees C scenario is outlined and then those stranded coal-fired power plants are identified with a bottom-up perspective. Stranded value is estimated based upon a cash flow algorithm. Results show that if coal capacity stabilizes during 2020-2030, China will only incur a sizeable yet manageable stranded asset loss (USD 55 billion, 2020-2045). However, a continued increase of coal-fired capacity, of another 200 similar to 400 GW, would significantly enlarge the loss by 2.7 similar to 7.2 times. Further, once commissioned coal-fired power would form a resource lock-in effect. Thus, it will miss a short-term opportunity to develop new energy sources and induce a long-term need to invest in coal-fired power negative emission technology. Therefore, halting the construction of new coal-fired plants is a low-cost and no-regret option for China. Key policy insights Even with the largest coal-fired power capacity in the world, China still has the chance to decommission the coal-fired power units gradually at a relatively low cost. Continuing to build new coal-fired power units in China will increase the risk of stranded assets, especially for North China Grid and Northwest China Grid. Taking immediate action to stop building new coal-fired power units would be the low-cost and no-regret option for China. The local financial sector needs to work with the energy sector to gradually withdraw from the coal sector and support clean and renewable energy.
Keywords
Coal-fired power, stranded assets, China, Paris Agreement
Discipline
Energy Policy | Environmental Sciences | Numerical Analysis and Scientific Computing
Publication
Climate Policy
Volume
23
Issue
1
First Page
11
Last Page
24
ISSN
1469-3062
Identifier
10.1080/14693062.2021.1953433
Publisher
Taylor and Francis
Citation
ZHANG, Weirong; ZHOU, Yiou; GONG, Zhen; KANG, Junjie; ZHAO, Changhong; MENG, Zhixu; ZHANG, Jian; ZHANG, Tao; and YUAN, Jiahai.
Quantifying stranded assets of the coal-fired power in China under the Paris Agreement target. (2023). Climate Policy. 23, (1), 11-24.
Available at: https://ink.library.smu.edu.sg/sis_research/6969
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Additional URL
https://doi.org/10.1080/14693062.2021.1953433
Included in
Energy Policy Commons, Environmental Sciences Commons, Numerical Analysis and Scientific Computing Commons