China's coal power construction continues to boom, with 37 GW of new capacity approved in the first half of 2023 and 10 GW already under construction. Most of these projects do not meet central government requirements for new coal permits, and the majority are in provinces with sufficient generating capacity to meet peak demand. This suggests weak enforcement of policies limiting new project permits. China has already added 152 GW of coal power capacity since the start of the current spree in early 2022, compared to the previous two five-year plans. Coal power capacity could increase by 23% to 33% from 2022 levels, either through massive increases in generation and emissions or through drops in plant utilization, leading to financial losses and potential asset stranded. Without immediate permit suspension, China will not be able to reduce coal-fired power capacity during the 15th five-year plan (2026-30) without subsequent cancellation of already permitted projects or massive early retirement.
