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China’s Coal-Plant Binge Deepens Overcapacity Woes
China’s Coal-Plant Binge Deepens Overcapacity Woes
China is building power plants it doesn’t need amid low coal prices and local efforts to create jobs
By Brian Spegele
May 31, 2016 6:58 a.m. ET
SHOUGUANG, China—In a whir of hammering and welding, construction crews in the industrial town of Shouguang put finishing touches on a new coal power plant that testifies to a building binge by Chinese companies—one that is compounding an oversupply of power.
For companies and local officials eager to prop up growth with new jobs, the availability of low-cost financing is combining with coal prices that are half the level of five years ago to make power projects attractive.
Tens of billions of dollars will be spent over the next two years. Investment in thermal power projects jumped 20% last year even as China’s power demand fell.
Workers at the new coal plant in Shouguang, 200 miles southeast of Beijing, say they’ve been at it for two and half years. The project could have been ready earlier, says one, but the electricity “wasn’t urgently needed.”
China is building power plants it doesn’t need amid low coal prices and local efforts to create jobs
By Brian Spegele
May 31, 2016 6:58 a.m. ET
SHOUGUANG, China—In a whir of hammering and welding, construction crews in the industrial town of Shouguang put finishing touches on a new coal power plant that testifies to a building binge by Chinese companies—one that is compounding an oversupply of power.
For companies and local officials eager to prop up growth with new jobs, the availability of low-cost financing is combining with coal prices that are half the level of five years ago to make power projects attractive.
Tens of billions of dollars will be spent over the next two years. Investment in thermal power projects jumped 20% last year even as China’s power demand fell.
Workers at the new coal plant in Shouguang, 200 miles southeast of Beijing, say they’ve been at it for two and half years. The project could have been ready earlier, says one, but the electricity “wasn’t urgently needed.”