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As U.S. Shutters Coal Plants, China and Japan are Building Them

China and Japan have plans to build massive amounts of coal-fired power plants, while the United States is not only not building new coal-fired power plants, but it is also shuttering many of its existing coal-fired power plants because of Obama Administration policies. China is building one coal-fired power plant every 7 to 10 days, while Japan plans to build 43 coal-fired power projects to replace its shuttered nuclear units. The United States, on the other hand, cannot build new non-CCS coal-fired power plants and is shuttering existing coal fired power plants. These existing coal-fired power plants retiring in the United States are among the cheapest source of electricity generation in this country. To replace these plants with new generating capacity will cost the nation and thus taxpayers and consumers billions of dollars.

Japan

According to a Japanese environmental group, the Kiko Network, there are 43 coal-fired power projects under construction or planned to be built to replace the loss of nuclear power capacity shuttered due to the accident at the Fukushima nuclear plant. The Fukushima nuclear power plant accident prompted Japan to shutter most of its nuclear power capacity — some of which had been damaged by the tsunami and earthquake that hit Japan in 2011.[i] In 2010, before the accident at the Fukushima plant, nuclear power generated 14 percent of Japan’s electricity, but after the accident in 2012, nuclear power generated only 2 percent of Japan’s electricity. The tsunami and earthquake killed 19,000 people, and destroyed 150,000 buildings.

Due to the shuttering of its nuclear units, Japan was forced to import coal, natural gas, and oil to make up for the lost nuclear power. According to the Energy Information Administration, Japan spent about $270 billion, or around 58 percent more, for fossil fuel imports in the three years following the Fukushima accident. Japan’s trade balance reversed from a 30-year trade surplus, which was $65 billion in 2010, to a deficit that reached $112 billion in 2013. Despite the lower oil prices in the second half of 2014 helping to lower Japan’s trade deficit, the country still has to import fossil fuels to keep its power system going.[ii]

In 2014, Japan issued its latest energy policy that emphasizes energy security, economic efficiency, and emissions reduction. Based on this policy, the country intends to develop the most advanced generation technologies using fossil fuels, strengthen the share of renewable and alternative energy sources, and reduce its dependency on oil in the transportation sector. Japan is the third largest oil consumer and net importer of crude oil and petroleum products in the world behind the United State and China.

In that light, Japan is financing $1 billion in loans for coal-fired plants in Indonesia and $630 million in loans for coal-fired plants in India and Bangladesh.[iii] Japan is using climate finance funds for the projects since these new coal-fired plants are less polluting than older coal-fired plants and therefore qualify as clean energy. Japan believes that the promotion of high-efficiency coal-fired power plants is one of the “realistic, pragmatic and effective approaches” to deal with climate change.[iv]

China

China added 39 gigawatts of coal-fired capacity in 2014 — 3 gigawatts more than it added in 2013. That is equivalent to three 1,000 megawatt units every four weeks.[v] At the peak, from 2005 through 2011, China added about two 600-megawatt coal plants a week, for 7 straight years.  And, China is expected to add the equivalent of a new 600-megawatt plant every 10 days for the next 10 years. These new coal plants that China is constructing are more efficient and cleaner than their old coal-fired plants.[vi]

China consumes more than 4 billion tons of coal each year, compared to less than 1 billion tons in the United States and 600 million tons in the European Union. China surpassed the United States to become the largest global carbon dioxide emitter in 2007, and it is on track to double annual U.S. carbon dioxide emissions by 2017. By 2040, China’s coal power fleet is expected to be 50 percent larger than it is today and these power plants typically operate for 40 years or more.[vii]

Source: http://www.climatecentral.org/blogs/chinas-growing-coal-use-is-worlds-growing-problem-16999

Recently, China has announced that it will shutter its last 4 coal-fired power plants in Beijing that are old and emitters of smog-causing criteria pollutants.[1] Air pollution in Beijing averaged more than twice China’s national standard last year. China will replace the old coal-fired plants with four gas-fired stations with capacity to supply 2.6 times more electricity than the coal plants.[viii]

China’s dilemma is that it does not have much producible natural gas resources of its own.[2] As a result, it had plans to build 50 coal-to-gas plants far from the cities and use the synthetic gas to power electric generating plants in the smog-filled cities thereby reducing air pollution. China currently operates two coal-to-natural-gas demonstration projects, with 48 other plants under construction or in the planning stage. When and if completed, those plants would produce 225 billion cubic meters of coal-fueled synthetic natural gas each year. However, China has now indicated that it will complete the construction of just 4 approved coal-to-natural-gas plants but will not approve new projects until 2020, keeping its coal-based synthetic natural gas production capacity to 15 billion cubic meters at the end of the decade.[ix] China has found challenges in the projects that have been completed due to both the large amount of water consumed and the environmental emissions from the plants, among other issues.[x]

Despite China’s entry into renewable energy and the massive hydroelectric projects it has, the country generates 70 percent of its electricity from coal and will continue to use coal as its major generating fuel to supply electricity to its population and to manufacture its exports. In fact, China approved the construction of more than 100 million metric tons of new coal production capacity from 5 large scale coal mines in 2013 – six times more than a year earlier.[xi]

United States

While Japan and China are building coal plants, President Obama’s EPA has proposed two rules that will ensure that no new coal plants be built and that will shutter many of the existing coal-fired plants by 2030. These rules are to be finalized sometime this year.

EPA’s regulation on carbon dioxide emissions from existing power plants mandates a reduction in carbon-dioxide emissions of 30 percent from 2005 levels by 2030. Each state is given a mandated reduction that ranges from 11 percent in North Dakota to 72 percent in Washington, using a baseline established by the EPA. States can meet the reductions by using a combination of four building blocks. No matter which building blocks the states use, however, electricity rates are expected to increase significantly.

According to a study by NERA Economic Consulting, electricity costs will increase by $366 billion between 2017 and 2031, and 43 states can expect double-digit rate increases each year. Utah, Wyoming and Montana—states dependent on coal– will see their rates increase by 20 percent, 18 percent and 16 percent, respectively, each year. Other states can expect to see average rate increases of about 10-15 percent.[xii] Besides these rate increases, the North American Electric Reliability Corporation (NERC) sees the rule as a significant reliability challenge due to the need to construct new generating and transmission capacity in a constrained time period.[xiii]

These proposed rules are on top of existing EPA rules that are already closing coal-fired power plants. EPA’s Mercury and Air Toxic Standards (MATS) requires that coal-fired power plants incorporate maximum achievable control technologies to control the emissions of acid gases, toxic metals, and mercury by April 2015 with a provision that allows state environmental permitting agencies to grant one-year compliance exemptions. It is estimated that 54 gigawatts of existing coal-fired capacity will be retired due mostly to this rule and additional 49 gigawatts will be retired due to EPA’s ‘Clean Power Plan’ by 2020, making a total of 103 gigawatts of coal-fired capacity removed off the grid by 2020.[xiv]

It is no wonder that NERC is concerned when EPA regulations will be taking a third of the nation’s coal-fired generating capacity off the grid. This is especially true considering that coal-fired plants worked overtime to heat homes and businesses during a deep freeze last winter. American Electric Power, for example, reported 90 percent of its coal plants slated for retirement under pending EPA rules were operating to meet peak demand.[xv]

And while China is opening new massive coal mines, coal mines in the United States are being closed and workers laid off due to EPA regulations and competition from low cost natural gas. For example, a major Appalachian coal mining company is laying off 214 workers in West Virginia and blaming the lost jobs on President Obama’s environmental policies.[xvi]

Conclusion

President Obama pledged the United States to reduce its greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025 to answer his concerns about global warming. The Administration also indicated that meeting that target would also set the stage for the United States to push toward far deeper cuts — perhaps exceeding 80 percent by 2050.[xvii] To reach those reductions, EPA is promulgating rules that will destroy our coal industry and the reliability of our electric grid. While U.S. consumers will see affordable energy disappear, other countries will be building coal-fired plants to keep their lights on and to improve their economies.


[1] Criteria pollutants are particle pollution (often referred to as particulate matter), ground-level ozone, carbon monoxide, sulfur oxides, nitrogen oxides, and lead.

[2] China has a large amount of natural gas in shale formations, but its geology makes it difficult to produce.

[i] Daily Caller, Japan Defies Obama—Plans on Building 43 Coal Plants, April 9, 2015, http://dailycaller.com/2015/04/09/japan-defies-obama-plans-on-building-43-coal-plants/

[ii] Energy Information Administration, Japan, January 30, 2015, http://www.eia.gov/countries/cab.cfm?fips=ja

[iii] Fuel Fix, Japan uses climate cash for coal plants in India, Bangladesh, March 26, 2015, http://fuelfix.com/blog/2015/03/26/japan-uses-climate-cash-for-coal-plants-in-india-bangladesh/

[iv] The Guardian, UN Green Climate Fund can be spent on coal-fired power generation, March 29, 2015, http://www.theguardian.com/environment/2015/mar/29/un-green-climate-fund-can-be-sphttp://fuelfix.com/blog/2015/03/26/japan-uses-climate-cash-for-coal-plants-in-india-bangladesh/ent-on-coal-fired-power-generation

[v] Energy Desk, New coal powered plants in China—a (carbon) bubble waiting to burst, February 23, 2015, http://energydesk.greenpeace.org/2015/02/23/comment-new-coal-power-plants-china-carbon-bubble-waiting-burst/

[vi] New York Times, China Outpaces U.S. in Cleaner Coal-Fired Plants, May 10, 2009, http://www.nytimes.com/2009/05/11/world/asia/11coal.html?_r=1&

[vii] Climate Central, China’s Growing Coal Use Is World’s Growing Problem, January 27, 2014, http://www.climatecentral.org/blogs/chinas-growing-coal-use-is-worlds-growing-problem-16999

[viii] Bloomberg, Beijing to Shut All Major Coal Power Plants to Cut Pollution, March 23, 2015, http://www.bloomberg.com/news/articles/2015-03-24/beijing-to-close-all-major-coal-power-plants-to-curb-pollution

[ix] Climate Wire, China plans major slowdown of new coal-to-gas projects in bid to cut emissions, December 17, 2014, http://www.eenews.net/climatewire/stories/106001069

[x] Seattle Times, China rethinking plans to build coal-to-gas plants, December 25, 2014, http://www.seattletimes.com/nation-world/china-rethinking-plans-to-build-coal-to-gas-plants/

[xi] Reuters, China approves massive new coal capacity despite pollution fears, January 7, 2014, http://www.reuters.com/article/2014/01/07/china-coal-idUSL3N0K90H720140107

[xii] NERA Consulting, Potential Impacts of the EPA Clean Power Plan, October 16, 2014, http://www.nera.com/publications/archive/2014/potential-impacts-of-the-epa-clean-power-plan.html

[xiii] Wall Street Journal, Why States Should Boycott the Federal Clean Power Plan, April 21, 2015, http://www.wsj.com/articles/why-states-should-boycott-the-federal-clean-power-plan-1429659225

[xiv] Institute for Energy Research, Assessing Emerging Policy Threats to the U.S. Power Grid, February 2015, https://www.instituteforenergyresearch.org/wp-content/uploads/2015/02/Threats-to-U.S.-Power-Grid.compressed.pdf

[xv] npTelegraph, ‘Clean Power could mean blackouts, April 8, 2015, http://www.nptelegraph.com/opinion/todays_column/clean-power-could-mean-blackouts/article_ba7038dc-9637-5ebf-9016-3c9ed2b58503.html#.VSV1u1xHulw.twitter

[xvi] The Hill, Coal company lays off hundreds, blames Obama policies, April 15, 2015, http://thehill.com/policy/energy-environment/238902-coal-company-lays-off-hundreds-blames-obama

[xvii] Politico, Barack Obama pledges greenhouse gas emissions cuts, March 31, 2015, http://www.politico.com/story/2015/03/obama-greenhouse-gas-emissions-116544.html