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World coal plant construction fell significantly in 2016, according to report

22 March 2017

Construction of new coal plants fell sharply last year according to a report published on March 22 by environmental groups Greenpeace and the Sierra Club, and research company CoalSwarm. The report claims that 2016 saw a 48% drop in pre-construction activity, a 62% drop in construction starts, a 19% drop in ongoing construction, and a 29% drop in completed projects.

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According to the report, called Boom and Bust 2017: Tracking The Global Coal Plant Pipeline, in January 2017 there was 570 gigawatts (GW) of coal power capacity in pre-construction, down from 1,090 GW in January 2016.

Projects under construction came to around 273 GW, 19% lower than in Jan. 2016, and those put on hold surged by 164% to 607 GW from 230 GW.

In China and India, where industry once forecast unending, exponential growth in coal demand, 68 gigawatts of construction is frozen at over 100 project sites.

"Globally, more construction is now frozen than entering construction in the past year ... The main cause of the shrinkage in the coal plant pipeline was the imposition of unprecedented and far-reaching restrictive measures by China's central government," the report says.

To tackle air pollution and curb excess supply, China has pledged to close 800 million tonnes of outdated coal capacity by 2020. It has already exceeded its 2016 goal to eliminate 250 million tonnes of coal capacity.

Over 300 GW of Chinese projects in various stages of development have been put on hold until after 2020, including 55 GW already under construction, the report says.

India also experienced a slowdown in coal plant development due to the unwillingness of banks and other financiers to provide more funds.

The International Energy Agency (IEA) said in December that growth in coal demand globally would slow over the next five years due to lower consumption in China and the United States and as renewable energy sources gained ground.

India, however, would see the fastest increase in demand, with IEA forecasting an average annual growth rate there of 5% by 2021. This now seems not to be happening.

The Sierra Club, a US-based environmental group, says 35 GW had been retired in the US and 29 GW in the EU over the last two years’ alone.

“Once a project has started construction, there is a massive economic incentive to complete it. The fact that projects are now being halted underscores how dire the situation is for the coal sector,” it said on its website.

“The good news is that, despite his blustering rhetoric, Donald Trump cannot change reality. The coal industry is collapsing, with clean energy overtaking coal across the US In 2015, solar and wind accounted for two-thirds of new generating capacity across the country, with the (Republican-voting) states of Texas, Oklahoma and Kansas leading on wind.”

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