Who is Driving Coal Power Exit in China? The Dynamic Roles of Incumbents in China’s Energy Transition

It has been widely agreed that coal-based electricity in the world needs to be substantially reduced before 2030 and, in most scenarios, completely phased out by 2050. Despite the efforts of other nations, the role of China in the global phase-out of coal power remains crucial. Drawing on three streams of research, including that on regime destabilisation and incumbent behaviours in the sustainability transition literature, business exit research, and local political economy in China, our study aims to shed light on the dynamics in coal power exit in China. To this end, we ask: who are the key agents driving coal power exit in China? What factors are shaping their decisions? And under what conditions is coal exit most likely to occur? Our empirical evidence sheds important new light on the drivers and decision-making dynamics of coal power exit in China – a country whose institutional and economic characteristics differ greatly from the West. In Western countries, it is often observed that incumbent energy firms constitute major obstacles to coal power exit, and that governments typically act in concert with these powerful firms to protect their incumbency and delay the clean energy transition. However, based on a case study of closures of coal power plants in China’s Guangdong province, we find that under certain circumstances, governments can and do act as change agents when it comes to coal power exit. We further argue that there is analytical utility in extending the notion of ‘incumbents’ to governments in the Chinese context, given their direct involvement in the current energy regime. Our case study identifies four types of actors involved in the decision making and implementation processes of closures of coal power plants in Guangdong province: the central government, the provincial government, the local (city)-level governments, and power generation companies. We investigate the role of each of these actors in coal power exit, and find their key considerations are dynamic and contingent upon a number of external and internal factors. Specifically, while the central government establishes the overall scope and criteria for the phase-out of coal power stations at the national level, the provincial government has a considerable level of discretion in setting the targets, identifying coal power plants to be closed, and facilitating the closure process. Finally, we discuss various forms of power that the governments appear to exercise to drive the coal power exit, and sources of dynamism in the behaviours of governments in the process.