In May 2019, China’s National Energy Administration (NEA) loosened  restrictions on  new coal power  plant  construction. This gave eight  provinces the green light to build new coal-fired generation capacity. Because of the  increasingly uncertain value proposition of  new  coal power generation,  even investments  that pass  the NEA’s  three-pronged warning system  may not be in China’s long-term national  interest.  New investments in coal generation capacity create asset, institutional, and environmental risks. The Regulatory Assistance Project concludes that strengthening existing measures and continued implementation of China’s policy directions in three areas:

  1. Electricity planning and investment,
  2. Electricity markets, and
  3. Environmental regulations will reduce those risks.

This policy brief highlights specific measures that policymakers can take to reduce risks and achieve China’s longer-term energy and climate goals.