Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises

This report analyzes the financing of coal power in China, finding that state-owned enterprises (SOEs) dominate the sector and have become financially self-sustaining. While government policies, low-cost debt, and specific tariff structures initially drove aggressive expansion, SOEs now generate sufficient revenue from depreciation expenses to fund coal capital expenditures independently of external finance or policy support.

• State-owned enterprises (SOEs) dominate the Chinese coal power industry, owning 61% of installed capacity and controlling shares in another 33%.
• Coal capacity expansion has been driven by government policy, including the 12th Five Year Plan's target of 300 GW of new capacity, supported by low-cost debt from state-owned banks, tariff structures that ensure profits, and a dispatch scheme that incentivizes expansion to increase revenue.
• SOEs have become increasingly reliant on debt finance, with their liability to asset ratio rising from approximately 70% a decade ago to about 80% currently.
• Despite a decrease in government support due to environmental concerns and lower industrial demand, SOE financing for coal expansion is now largely self-sustaining. This is primarily achieved through the reinvestment of profits and tariff revenues; specifically, tariff revenues for depreciation expenses now exceed annual coal power capital expenditures by 30%.

APA

Climate Policy Initiative (2015). Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises. https://www.climatepolicyinitiative.org/publication/slowing-the-growth-of-coal-power-in-china-the-role-of-finance-in-state-owned-enterprises/

Chicago

Climate Policy Initiative. Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises. 2015. https://www.climatepolicyinitiative.org/publication/slowing-the-growth-of-coal-power-in-china-the-role-of-finance-in-state-owned-enterprises/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises |date=16 December 2015 |url=https://www.climatepolicyinitiative.org/publication/slowing-the-growth-of-coal-power-in-china-the-role-of-finance-in-state-owned-enterprises/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2015slowing, author = {{Climate Policy Initiative}}, title = {{Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises}}, institution = {Climate Policy Initiative}, year = {2015}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/slowing-the-growth-of-coal-power-in-china-the-role-of-finance-in-state-owned-enterprises/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }