New coal plants in China soar despite President Xi’s pledge to ‘strictly control’ dirtiest fuel
China ramped up coal power capacity last year, according to new analysis, despite a pledge to “strictly control” the dirtiest fossil fuel.
The country added 47.4 Gigawatts (GW) of new coal power in 2023, more than double the amount added by the rest of the world combined.
It raises concerns that gains in clean power, including by China, are being undermined by the persistent use of coal, the worst energy form for climate change and air pollution.
Analysts say China may not use all the capacity it has built.
Beijing has promised to reduce coal consumption from 2026, and said its polices align with the international Paris Agreement on climate.
But the surge drove an increase in global coal by 2% last year, the first uptick since 2019, though other countries were responsible too, Global Energy Monitor (GEM) said.
The global rise comes two years after countries promised at the COP26 climate conference in Glasgow to “transition away” from coal.
GEM said it could just be a “blip”.
But Tina Stege, climate envoy for the Marshall Islands, which are battling rising sea levels, said fossil fuel support is “unacceptable”.
Professor Piers Forster, interim chair of the UK government’s Climate Change Committee, called it “worrying”.
While extra capacity may not end up being used, “without strong regulation and polices that prevent it from being used, 2023 will not be seen as just a blip and future emissions rise will be inevitable”, Prof Forster said.
Does China need more coal power?
China’s coal spree is “very out of line” with a promise made by President Xi in 2021 to “strictly control” new coal power, said Flora Champenois, GEM coal programme director.
It also threatens a Chinese Communist Party target to shut down 30GW of coal power by 2025 – with only 9GW retired in the last few years.
“This coal boom – in terms of new coal plants coming online, new permits being awarded, new construction starting, no signs of a slowdown, no signs of retirement on the horizon – does not align with the commitment to strictly control coal,” Ms Champenois told Sky News.
But the new coal plants do “not necessarily mean that China is going to increase an equivalent scale of CO2 emissions,” said Qi Qin, China analyst for Research on Energy and Clean Air, who also wrote the report.
That’s because China is “increasing its renewable power capacities by [the same] scale too”, she said.
China has recently built more solar power than the rest of the world combined, and is on track to meet a 2030 clean power goal five years early.
The surge is partly fuelled by power shortage fears after a 2022 drought shrivelled water supplies for China’s hydropower.
But it already has more coal power than it needs, said Ms Qin, but a rigid grid system makes it hard for provinces to share power, meaning many are building their own coal plants.
Chinese President Xi Jinping visiting a coal yard Pic: Xinhua News Agency,
‘Blip’ or ‘unacceptable’?
Seven other countries added new coal power in 2023 too, GEM found.
Those were Indonesia, India, Vietnam, Japan, Bangladesh, Pakistan, South Korea, Greece, and Zimbabwe.
But GEM also partly blamed the global net increase in coal power on rich countries stalling plant closures amid the energy crisis in 2022.
Marshall Islands climate envoy Tina Stege, said: “We can’t afford blips.”
She told Sky News: “Since the start of the year, my country has been reeling from one climate-induced emergency to another, with flooding from king tides and drought affecting communities throughout the islands.”
Coal power, still the single largest source of emissions globally, must be “phased out as soon as possible” to avoid “catastrophic sea level rise and [save] lives and livelihoods”, she said.
She called it “unacceptable” the world has hardly started on shifting the trillion dollar subsidies for the fossil fuel industry to clean alternatives.
A spokesperson from the Chinese embassy in London said China will go from peaking emissions to carbon neutrality “in the shortest span of time ever in the world”.
“Our climate policies and objectives are fully consistent with the long-term temperature goal of the Paris Agreement.
“Today, close to half of the world’s installed [solar PV] capacity is in China, over half of the world’s new energy vehicles run on roads in China, and one-fourth of the world’s increased area of afforestation is in China.”
They added: “We are also working to cultivate large-scale new growth drivers in green infrastructure, green energy, green transportation and green lifestyle.”
Business
IMF upgrades UK growth forecast but issues fresh warning on national insurance cuts and debt
The International Monetary Fund (IMF) has said the UK economy is heading for a “soft landing” but reiterated its message to Jeremy Hunt that he should not have cut national insurance at the last two fiscal events.
In its annual check-up on the state of Britain’s economy, the Washington-based Fund also warned of a black hole in the public finances, with £30bn of spending cuts or tax rises needed to stabilise the national debt.
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The fund raised its forecast for gross domestic product growth this year from 0.5% to 0.7%, saying: “The UK economy is approaching a soft landing, with a recovery in growth expected in 2024, strengthening in 2025.”
It now expects inflation to come down to close to 2% in the coming months, and the Bank of England to cut interest rates by as much as three-quarters of a percent this year, and then another percentage point next year.
The chancellor welcomed the fund’s article IV report, saying: “Today’s report clearly shows that independent international economists agree that the UK economy has turned a corner and is on course for a soft landing.
“The IMF have upgraded our growth for this year and forecast we will grow faster than any other large European country over the next six years – so it is time to shake off some of the unjustified pessimism about our prospects.”
However, the IMF – which has warned the government explicitly in the past not to cut taxes too fast in the face of rising spending projections in future – said that the two 2p national insurance contribution (NIC) cuts at the last two fiscal events were a mistake.
“In light of the medium-term fiscal challenge,” the report said. “Staff would have recommended against the NIC rate cuts, given their significant cost.”
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The fund’s staff also believe that the government is not on track to meet its main fiscal rule, which commits it to cutting the national debt in five years time.
It believes net debt will carry on rising towards 97% of GDP in the following years, instead of falling back to 93% of GDP, as the Office for Budget Responsibility has forecast.
The fund’s double-edged report comes amid improving news for the UK.
Data released two weeks ago showed the country ended its short-lived recession with faster-than-expected growth in the first quarter of the year.
The Office for National Statistics is also expected to announce tomorrow that inflation dropped down close to the Bank of England’s 2% target in April.
That may enable the Bank to begin cutting interest rates from their 5.25% level in June or August.
The fund’s report contained a number of other recommendations for economic policy in the UK, including that the Bank of England should commit to more press conferences to explain its decisions, and that the government should consider imposing road charges to replace the revenue lost from fuel duty as electric cars become more predominant on UK roads.
Superdry is preparing to run an emergency four-week sale process if creditors block its founder’s plans to inject up to £10m of his own money into the fashion chain in a bid to stave off insolvency.
Sky News has learnt that the accelerated M&A process would be launched if a restructuring plan is not approved by creditors in the coming weeks.
Under the proposed survival plan, Julian Dunkerton would stump up either £8m in an open offer available to other shareholders or £10m in a placing that would only be accessible to him.
The share sale would precede Superdry’s delisting from the London Stock Exchange.
The restructuring plan would need to be approved by creditors, including landlords, in the coming weeks.
According to a document circulated to creditors in recent days and seen by Sky News, rejection of the restructuring plan would be followed by a four-week sale process for Superdry, with the likely outcome of a pre-pack administration deal.
Sources said that Mr Dunkerton’s willingness to inject such a substantial chunk of his own fortune into the company reflected his confidence in the company’s turnaround prospects.
Superdry’s shares have slumped to a series of record lows in recent months amid dire trading and a failed sale process.
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Last month, Sky News revealed that M&G, the asset manager which owns Superdry’s flagship store in central London, was weighing a challenge to its rescue plan.
M&G is believed to have been alarmed by the absence of their participation in a mechanism to allow creditors to benefit from any future recovery in the retailer’s performance.
The restructuring plan will not entail immediate shop closures but will impose sizeable rent cuts on landlords of dozens of Superdry outlets.
Sources said the firm is also planning to pull out of a number of overseas markets, including the US.
On Tuesday morning, shares in the company were trading at around 6.7p, giving the indebted company a market capitalisation of less than £7m.
It recently agreed an increased borrowing capacity with Hilco Capital, one of its existing lenders, while it also owes tens of millions of pounds to Bantry Bay.
Mr Dunkerton, who in 2019 returned to the company having previously been ousted, owns just under 30% of the shares.
In recent months, Superdry has raised cash by offloading its brand in regions including India and Asia-Pacific.
Superdry declined to comment.
Business
South West Water: Surge in profits for parent company of utility responsible for fixing contaminated supply in Devon
The parent company of South West Water has insisted it is focused on returning safe water supply to Brixham in Devon as it announced an 8.6% increase in underlying operating profits to £166.3m.
Around 17,000 households in the Brixham area have been told to boil their drinking water since last week following an outbreak of cryptosporidiosis which left hundreds of people ill.
The condition, which can lead to vomiting and diarrhoea, is caused by a water-born parasite, and South West Water has said it was most likely triggered by animal faeces entering a damaged pipe.
Pennon Group, the listed company which owns South West Water, Bournemouth Water and Bristol Water, said normal service had been returned to 85% of customers as it announced its annual financial results.
“Whilst the results we are announcing today are based on our performance for the last financial year, we are 100% focused on returning a safe water supply to the people and businesses in and around Brixham,” said Susan Davy, the group chief executive.
“Normal service has returned for 85% of customers, but we won’t stop until the local drinking water is returned to the quality all our customers expect and deserve. Our absolute priority continues to be the health and safety of our customers and our operational teams are working tirelessly around the clock to deliver this.”
The company also revealed it is paying out about £3.5m in compensation to customers affected by the parasite outbreak in Devon.
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‘Robust’ results – but firm defends money for shareholders
Describing financial results which include a 10% increase in revenues to more than £907m as “robust”, Ms Davy said dividend payments to shareholders, increasing by 3.8% to 44.37 pence per share, had been reduced to cover the cost of a £2.4m fine for multiple pollution incidents.
“At a time when media, public and regulatory scrutiny is high, it is important we do what is right for all. In the context of the wider group performance, we have carefully considered Ofwat’s new dividend guidance for water businesses. We have… adjusted the final dividend quantum by £2.4m, equivalent to the South West Water Court fine in 2023/24, signalling we are listening, clearing the way for long-term shareholder value.”
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Pennon Group’s net debt rose by 10% to £5.18bn, a debt ratio of more than 63%, and capital expenditure rose by almost 80% to £642.4m.
Water companies are currently negotiating with regulator Ofwat over their spending and revenue plans for the next five years, and South West Water has proposed a 20% increase in customer bills.
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