State planner: China will continue to build coal plants until 2027.

According to guidelines released by the government on Monday for upgrading the coal power grid, China will continue to build coal-fired plants in areas where they are required to meet peak demand or stabilize the grid.

This policy could raise questions regarding China's commitment in phasing out coal usage during the period 2026-2030, even though it states that new coal projects are a backup for renewable energy whose output is dependent on sun and wind conditions.

According to the guidelines issued by the state planners and energy regulators, newly constructed coal plants must have carbon emissions 10-20% less per unit of electricity output than those in the 2024 fleet. Existing coal plants may also need to be upgraded to meet these conditions.

Coal plants that are newly built or upgraded should be able adjust their output safely and reliably to meet peak demand.

This plan is a response to a report released by the China Coal Association, which said that China's coal demand would peak in 2028. Other forecasts had said that China's consumption of coal could peak as early as this year.

The association stated that the increased coal use in the power and chemical sectors will support a slight increase in consumption this year, which will offset declining demand in the steel and construction material industries. (Reporting and editing by David Holmes; Colleen howe)

(source: Reuters)