It is widely recognized that China{\textquoteright}s economy has entered a so-called economic "new normal," characterized by a lower overall economic growth rate, a structural shift toward a service economy, and widespread overcapacity in many industrial sectors.
As a consequence, China{\textquoteright}s energy consumption grew only 0.9\%, and electricity consumption growth slowed to 0.5\%, in 2015. Despite this downturn in electricity demand, power plant construction and permitting has continued at a rapid pace. Government agencies reported that 130 gigawatts (GW) of new generation capacity was added in 2015; other reports show that an additional 200 GW of coal-fired generation capacity is under construction, with more in the permitting process.
There are many factors that may have contributed to the overbuilding of coal power plants in China {\textemdash} declining coal prices, which led to higher profits for generators due to the lag in reducing their wholesale power tariff; overly optimistic expectations for economic and electricity demand growth; and local governments{\textquoteright} preference for investment, which generates employment and tax revenues. However, there may be more fundamental issues at play. In particular, we argue that China{\textquoteright}s current planning process for the power sector is insufficient to meet emerging challenges under the economic "new normal," to address urgent air quality problems, and to support China{\textquoteright}s ambitious clean energy and climate goals.
}, year = {2016}, month = {11/2016}, }