China's energy transition continues: the world's largest coal consumer for energy production is aiming to become a leader in the renewable energy market. The latest move by the National Energy Administration demonstrates as much, having decided to halt the construction of 104 new coal plants. The stop will affect 13 provinces across China, for a total of 120 GW of newly installed capacity. 47 coal plants were already under construction, accounting for a total of 54 GW.

The decision was also taken on the basis of the government's new five-year plan for energy production in China: the latter caps installed capacity at 1,100 GW, rather than the 1,250 previously envisaged. Expansion will nonetheless continue, given that China today has 920 GW of installed coal-fired capacity. Figures that nonetheless place the Chinese giant among the top producers of energy from fossil fuels (the United States has 305 GW of installed capacity, while Italy still has 12 operational plants).

Fewer coal plants, with the crisis also playing a part

Coal's decline in China began as far back as the end of 2013, recording a reduction of 1.5 per cent over the 2014–2015 two-year period. Last November, at least 30 new plants were closed before they had even been built, while at least a thousand mines across the country are expected to be shut down. Partly driven by a fall in industrial production on one hand and a supply surplus on the other, coal has begun its descent. Not to mention the enormous problems the country faces with smog and air pollution, particularly in major cities — pollution that led the government to decide on the temporary closure of many plants.

Investments in renewables

But the five-year plan also envisages a decisive push towards renewable energy. By 2020, China plans to install 130 GW of new capacity, coming in particular from solar and wind. An investment of around 340 billion euros that is expected to create 13 million jobs. By 2020, 27 per cent of energy production will come from renewables, while 55 per cent will still be coal-fired.

The fact remains that, since ratifying the Paris Agreement, China appears to have decided to take decisive action to reduce CO2 emissions and honour the commitments made: keeping global temperatures below 2 degrees centigrade. This was recalled by President Xi Jinping himself, during his address to the World Economic Forum in Davos: "all signatories must honour the agreements." The intended recipient of the message can only be one.