China Huaneng Group is a state-owned energy company headquartered in China. Its revenue in 2019 was US$42.28 billion and installed capacity in 2018 was 176 GW . It was the first mainland Chinese power producer to become a Fortune 500 company. Huaneng is majorly dependent on coal-fired plants (72.9% in 2018) and accelerates its investment in low-carbon (66% in 2018) capacity.
Huaneng publicly supports China’s climate policy, the pilot ETS. All 13 of the company’s subsidiaries participating in the ETS managed to limit their total emissions to within their allocated allowances.
Huaneng is expecting only a slight decrease in its emissions intensity – that is, the amount of greenhouse gas emissions produced for every unit of electricity – and only a slight increase in its low-carbon electricity generation in the short term. Both will be insufficient for the company to align with its low-carbon pathway. It is important for Huaneng to develop clear emissions reduction targets to guide its future decarbonisation.
The lack of strong climate management and a transition plan could pose a risk to Huaneng. Although the company has stated it intends to continue developing its low-carbon electricity generation capacity, this is not guided by a transition plan. Additionally, Huaneng is investing in R&D to advance both fossil fuel generation technologies and technologies with significant potential to mitigate climate change. A holistic transition plan would help Huaneng to develop consistently and in line with its transition pathway.
Huaneng is awarded a trend score of -. If the company were reassessed in the near future, its score would likely worsen.
With no emissions reduction targets, no low-carbon transition plan and no coal phase-out plan in place and non-existent climate governance, Huaneng is expected to move further away from its well below 2-degree scenario pathway. The company intends to continue developing its low-carbon energy portfolio, and its total share of low-carbon energy is expected to increase. However, coal-powered generation is still dominant, and Huaneng also runs coal assets for its own and other companies’ power generation use. Huaneng is in need of an ambitious and transformational transition plan. It is worth noting, however, that fossil fuel electric power generation is still at the core of China’s energy security policy, giving energy utilities little incentive to find alternative power sources.
Huaneng intends to further develop its low-carbon energy portfolio but has no emissions reduction targets or transition plan in place. It is majorly dependent on coal-fired plants (72.9% in 2018) and owns coal assets for electricity generation. The majority of Huaneng’s most recent investments in new capacity (66% in 2018) was low carbon (hydro, solar and wind).
Huaneng intends to continue developing its low-carbon electricity generation capacity. However, it has not announced any emissions reduction targets or a transition plan. No further action plans are publicly available.
Huaneng is investing in low-carbon power plants, collectively accounting for 66% of the total capacity invested in 2018, as well as in R&D into technologies with significant potential to mitigate climate change. At the same time, it is improving fossil fuel power generation technologies, as it aims to keep a large proportion of coal-fired generation in the foreseeable future.
Huaneng decreased its emissions intensity in the period 2013-2018, mainly due to improvements in fossil fuel generation efficiency. Some 73% of the company’s total capacity in 2018 was coal-based, a relative reduction from 80% in 2013. However, coal capacity has been expanded by 13% since 2013 in absolute terms.
As Huaneng has no publicly available emissions reduction targets, no low-carbon transition plan and no intention of phasing out coal, it will likely show an increasing commitment gap between its actual emissions pathway and the company’s well-below 2-degree pathway. Much greater effort and commitment are needed for Huaneng to become low carbon aligned in the near future.