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China’s emphasis on energy security favors coal power

The government’s emphasis on energy security is contributing to a burst of coal power construction across China, in regions with ample coal capacity to meet peak and balance variable renewables. This appears to be driven primarily by the desire of provincial officials to lock in more infrastructure investments now, while coal plants are encouraged. As the coal overcapacity problem worsens, financial losses at coal plants are driving the push to adopt a specific capacity payment for coal plants. The capacity payment policy announced in November 2023 could provide further incentive to build more coal capacity, which might eventually lead officials […]

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