- China has announced a total of 52 coal-based power projects since 2014, but only one of them has got operationalized till now.
- The Green Belt and Road Initiative Center (GBRIC) reported, “At the same time, 25 of the projects announced since 2014 had been shelved and eight ended up cancelled.”
- The energy sector forms the very core of Xi Jinping’s flagship Belt and Road Initiative (BRI), which is expected to reach $1.2–$1.3 trillion by 2027 in terms of spending.
Beijing’s coal crisis is too big and if you thought that it is limited to China, you are certainly wrong. The Communist nation is also losing billions of Dollars in its Belt and Road Initiative (BRI). Several countries that are a part of the BRI have closed down many Chinese coal-powered thermal power projects in their territories over concerns like lack of professionalism and ineffective implementation.
How big is China’s overseas coal power industry
The energy sector forms the very core of Xi Jinping’s flagship Belt and Road Initiative (BRI), which is expected to reach $1.2–$1.3 trillion by 2027 in terms of spending. Energy spending accounts for 44 per cent of all BRI spending. Moreover, most of the Chinese energy financing goes into nonrenewable sources. In 2018, 40 per cent of Chinese energy lending was concentrated in coal-based power plants.
In fact, China is a big patron of unclean energy. In BRI countries, the Communist nation has pumped in $45 billion of coal-fired power projects. China is the biggest culprit of impeding the global fight against climate change that claims to be part of, as it has relentlessly financed and built coal-based power projects around the world as a part of the BRI.
The ten largest financiers of coal-powered thermal projects around the world are Chinese banks. In fact, the Chinese banks have financed 70 percent of the world’s coal-fired power projects if we count both domestic and international projects. As of 2016, China was involved in a total of 240 coal-powered plants in BRI countries, a number which is expected to have grown exponentially till now.
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Why are overseas coal plants crucial for China?
China imports good-quality coal with high calorific value for its domestic power sector. Yet, China is itself the largest producer of coal in the world, and in 2019, it accounted for 46 per cent of the fossil fuel’s global output.
Till last year, China was using Australian coal to generate electricity and manufacture steel. Now, after a fallout with Australia, China is looking at other sources like Russia and South Africa. So, where will all the Chinese coal go? For Xi Jinping, thermal power investments in BRI countries form a good source to export Chinese coal. China’s BRI coal projects have helped create new markets for the Chinese coal mining industry.
Chinese financiers too remain unsure about the potential of renewable and clean energy in developing countries, which further explains China’s tendency to invest heavily in the coal-based power sector.
China’s coal-fired power plants in BRI countries shutting down
Billions of dollars have been pumped in by China, but the coal power projects in BRI countries haven’t really taken off. HK Post reported, “more than USD 65 billion of Chinese-backed coal-fired power plants have been either shelved, mothballed or cancelled since 2014, with more projects seeing delays in construction.”
China has announced a total of 52 coal-based power projects since 2014, but only one of them has got operationalized till now. The Green Belt and Road Initiative Center (GBRIC) reported, “At the same time, 25 of the projects announced since 2014 had been shelved and eight ended up cancelled.”
Many China-funded coal power projects have either been written off or cancelled or shelved. As per HK Post, Chinese coal-fired projects have been affected in countries like Zimbabwe, Russia, Cambodia, Egypt, Botswana, Vietnam, Nigeria, Ghana, Romania, Tanzania, Indonesia, Bangladesh, Mongolia, Oman, Malawi, Bosnia and Herzegovina, Mozambique, Sudan, Zambia, Sri Lanka, Greece and Pakistan.
In Zimbabwe, China-funded coal projects worth USD15.4 billion got scrapped. Similarly, in Russia projects worth USD 12.5 billion got shelved. To worsen China’s woes, inefficiency and lack of professionalism in the execution of projects is not the only problem. China is also facing protests from indigenous communities and environmentalists. Last year, some NGOs joined hands in Turkey and pushed back against Chinese banks investing in coal-based power projects.
Going ahead, China is going to face further issues. The Communist nation is facing a crippling coal deficit and power shortage crisis. Now, China is trying to source coal from any part of the world at any possible cost. Moreover, the Communist nation is likely to preserve local coal production and this is going to impede China’s readiness to export coal to BRI nations for setting up coal-fired thermal plants.