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How China is cleaning the highly-polluting coal power sector

China's Transition to Low Emission

China, with the world’s largest coal-based power plant capacity, has made a remarkable transition to a low emission pathway. Since 2012, sulphur dioxide (SO2) emissions from its thermal power sector declined by 38 per cent and nitrogen oxide (NOx) by 42 per cent. The country’s success holds crucial lessons for India.

Cleaning the Sector

China has been systematically working to clean the sector. In 2006, the government decided to reduce national emissions of SO2 by 10 per cent. To achieve the target, the government promoted the installation of flue-gas desulphurization (FGD) units in thermal plants. Between 2006 and 2010, FGD penetration in the sector increased from 30 per cent to 87 per cent. By 2015, FDG penetration reached 93 per cent.

New Emission Norms

In 2011, China set a target to reduce national NOx levels by 10 per cent and introduced new emission norms for the coal-based power sector. To meet the national NOx targets, the government pushed the installation of selective catalytic reduction and selective non-catalytic reduction units. By 2015, more than half the plants had installed the devices.

The new emission norms for coal-based power plants slashed NOx limit by 78 per cent and SO2 levels by 50 per cent. The norms also introduced a more stringent standard for highly-polluted regions. In addition, several regions, including Beijing, have voluntarily adopted norms that are stricter than the national levels. In 2015, Beijing adopted the world’s lowest emission levels for its power plants. A year later, it decided to shut all the four coal power plants and shifted to natural gas for electricity.

Planned Success

China has also ensured policies to ensure that power plants are adequately compensated for making investments in cleaner technologies. China introduced differential tariffs way back in 2004, under which low emission generation is rewarded with an additional tariff. For supporting investments in pollution control devices, the government also provides subsidised grants and loans to plants.

In addition, the Chinese government has issued technical guidelines to assist the installation of pollution-control devices. The government has also introduced the new Environmental Protection Law, 2015, that has increased the penalties for non-compliance. The country has also introduced preferential dispatch mechanism in certain areas.

Christopher James says, “China’s move to reform its power sector is believed to have reduced carbon dioxide emissions by 1 per cent in 2016. China’s coal consumption has also declined several per cent since a 2013 peak.”

“Planners need to integrate energy efficiency and renewable energy policies to ensure future success,” says James. China, in its 13th Five Year Plan (2016-20), has revised national reduction targets for SO2 and NOx emissions to 15 per cent. It also aims to bring the thermal power sector to meet the ultra-low emission levels. So far, over 100 GW of coal-based capacity has been retrofitted with ultra-low emission technology, and the target is to increase this to 420 GW by 2020.

China is also considering a subsidy to ensure cost competitiveness of ultra-low emission plants. This is because despite investing heavily in renewables, the country plans to increase coal-based capacity from the existing 943 GW to 1,100 GW by 2020.

What India can learn

The power generation capacity that China aims to achieve in the next three years is more than 80 per cent of India’s total coal-based power plant capacity. While China is likely to achieve the target by setting up low-emission power plants, India today is not even in a position to clean up its existing plants.

The Chinese experience clearly indicates that advanced pollution control technology can help achieve large emission cuts and that these devices can be installed in a time span of two-three years. Further, the upgradation and installation requirements in India are only a fraction of the Chinese standard.

“Introduction of stringent emission standards in China, and provision of financial incentives and technology support for the installation of pollution-control devices is a valuable experience for India. The crucial precondition is that the government must have strong political will to clean up the air,” says Fu Lu.

As the India’s power sector inches towards the implementation deadline, it is imperative that the government borrows a leaf from the books of Chinese policymakers and supports the power sector in its low emission transition.