These new projects could go ahead because the policy contains exemptions for many provinces, for projects designed to export power from the west to the east and for combined heat and power projects.

On the other hand, preliminary information on China’s new energy five-year plan broke out yesterday from a government-controlled media outlet, indicating a more complete ban on new permitting will be forthcoming.

However, even without any new permits for conventional coal plants, there is still enough capacity under construction or allowed to go to construction for China to keep adding one GW of coal-fired capacity per week for four and a half years, until the end of 2020.

This would mean about 1.1 trillion yuan ($160bln) spent on redundant capacity.

The top two provinces, Shandong and Shaanxi alone would have approximately 250 billion yuan worth of redundant capacity.

‘Winter is coming’

Chinese energy industry publication Southern Energy Observer recently collected comments on the overcapacity situation from market participants across the country, and one phrase got repeated half a dozen times: the power industry’s “winter is coming”.

A commentator from the northeast said that the industry had anticipated a central government clampdown on new permits and rushed to grab permits at the last minute, with a lot of poorly planned projects going into construction.

A Cantonese reader noted that nuclear, hydro, wind and solar are competing with thermal power, resulting in a lot of existing units standing idle. Yet, more coal power units are under construction, surely worsening the situation and risking waste of capital.

Selling but not buying

A commentator from Xinjiang, in the far west of the country, lamented that the prospects for the massive fleet of new coal-fired power plants under construction in the province, equal to the total coal-fired capacity of Poland, are not bright: the plan is to export all that power to the eastern provinces but those provinces themselves have overcapacity.