Government shareholders, wasted resources and climate ambitions: why is China still building new coal-fired power plants?

Figures & data

Table 1. Key data points for pro forma coal plant model (see SM Table A3 for expanded table and sources).

Component	Unit	Plant-level (financial)	Country-level (economic)
Capacity	MW	1,000
Coal energy content	MWh/ton (metric)	18.84
Plant efficiency	%	48%
Construction period	years	3
Capital cost	US$ / MW	517,366	401,657
Inflation rate	%/year	2.1% (1.5% on tariff)	–
Discount rate	%/year	6%	8%
Domestic financing	% of financing	100%
Loan tenor	years	20	–
Operating life	years	30
Load factor	%	48%
Coal fuel cost (delivered)	US$ / ton	76.52	72.57
Initial operating costs	US$ / MW-year	11,549	9,816
Weighted average T&D costs	US$ / MWh	–	30.0
Electricity tariff received	US$ / MWh	47.12	–
% industrial users	%	–	62%
Weighted average WTP	US$ / MWh	–	87.9
Local pollution taxes	US$ / MWh	0.05	0.26

Table 2. Selected sensitivities.

Factor	Unit	Base case value	Sensitivity	EIRR	Equity FIRR
Base Case				19.1%	8.4%
Plant life	years	30	40	19.1%	8.9%
Lower off-taker tariff	US$/MWh	47.12	−10%	“	−0.5%
Higher WTP for electricity	US$/MWh	87.90	+10%	25.0%	“
Higher CapEx (financial)	US$/MW	517,366	+10%	17.5%	6.8%
Higher coal price	US$/ton	76.5	+10%	16.7%	2.4%
Higher T&D costs	US$/MWh equivalent	30.0	+10%	16.8%	“
Higher tax on local pollution (financial)	US$/MWh	0.05	0.47	“	7.8%
Higher social cost on local pollution (economic switching value)	US$/MWh	0.26	13.1	8.0%	“
Lower load factor	%	48%	−20%	15.3%	3.8%
Higher load factor	%	48%	+20%	23.4%	13.3%

Table 3. Summary of climate policy scenarios.

	Start year	Shadow carbon price (SCP) (US$/tCO2, $2020)		Load factor restriction (LR) (%)
		“Modest ambition SCP scenario”	“Higher ambition SCP scenario”	“LR stated policies scenario”	“LR below 2C scenario”
Base Case	2021	0	0	48%	48%
Five Year Plan
15th FYP	2026	15	15	43%	41%
16th FYP	2031	20	30	36%	31%
17th FYP	2036	25	45	25%	18%
18th FYP	2041	30	60	18%	13%
World Bank
Lower bound SCP	2020	40 (+2.25%/ year)		48%
Upper bound SCP	2020	80 (+2.25% year)		48%
Coal Power Moratorium
2030 Moratorium	2030	–	–	0%
2035 Moratorium	2035	–	–	0%

Figure 1. Economic NPV at 8% under different shadow carbon price scenarios.

Figure 2. Economic NPV at 8% under different LR policy and moratorium scenarios.