You are here: Home » News-IANS » Business-Economy
Business Standard

China's support for coal erodes clean energy leadership: IEEFA


IANS  |  New Delhi 

China's continued support for coal power across Asia erodes its clean energy leadership, US-based Institute for Energy Economics and Financial Analysis (IEEFA) said on Tuesday.

While financial institutions around the world are moving away from coal to limit exposure to increasing stranded asset risks, it said global renewable energy champion China was simultaneously funding over a quarter of coal plants currently under development outside the country.

Its new report, 'China at a crossroads: Continued support for coal power erodes China's clean energy leadership', examines the country's expensive subsidisation of largely imported coal plant investments across 27 countries.

Report co-author and IEEFA Energy Finance Consultant Melissa Brown said that funding coal plant projects leaves China and the 27 countries reliant on Chinese coal financing increasingly exposed to bad economic outcomes as nations move away from coal.

The IEEFA report finds that Chinese financial institutions, both the development finance institutions and state-controlled banks, have committed or offered funding for over a quarter (102 gigawatts GW) of the 399GW of coal plants currently under development outside China, including investment in export coal mines, coal-fired power plants and the associated rail and port infrastructure.

Bangladesh has the most proposed coal-fired capacity and funding from China, totalling over $7 billion for 14GW of capacity, followed by Vietnam, South Africa, Pakistan and Indonesia.

"These countries and more are instilling both a long-term dependence on volatile fossil fuel imports, and a dependence on China through coal plant joint ownership and or strategic arrangements plus excessive foreign financial leverage, precisely at the time when prices for solar, wind and energy efficiency costs are falling below imported coal power," co-author Christine Shearer said.

The report finds that most coal funding outside China is being provided by public Chinese banks that back Chinese state-owned enterprises to build the plants with a largely Chinese workforce.

"Those countries accepting Chinese coal finance are getting a bad deal from Chinese public institutional lenders as the total costs are prohibitive when compared to investment in deflationary renewable energy alternatives," Shearer said.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, January 22 2019. 17:30 IST