Government officials and state-owned energy enterprises in China are currently debating another wave of coal power investment, despite a severely diminished business case for the technology. These companies that own and operate China’s coal fleet are already facing financial losses , thanks to increasing competition from renewables , market reforms and overcapacity in the sector. Some recent estimates find that the cost of building new solar generation in China is approaching the operating cost of coal generation. The enterprises that dominate the power sector in China are state-owned, but they do respond to profit incentives. Given the risk of additional financial losses, why would these firms not only consider, but also actively promote, a wave of new coal power plants in China? In this article, I try to answer the question by exploring two aspects of China’s power sector. First, the specific policies that govern the power industry and, […]