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Coal consumption is on the rise for the first time in three years, but the country is still a renewable energy powerhouse, writes Mark Hillsdon
China is in the midst of a green revolution. The government has committed to spend at least $260 billion on clean energy projects by 2020 as it seeks to wean itself off dirty coal, and, according to the Institute for Energy Economics and Financial Analysis (IEEFA), China is now the world leader in renewable energy investment.
Chinese manufacturers have changed the economics of renewable power, cutting costs so that it can compete with fossils fuels. Five of the world’s top six solar companies, and six of the 10 major electric car manufacturers, are Chinese, while Goldwind, United Power and Envision Energy compete with Danish and German wind turbine manufacturers. China also dominates the mining of lithium and cobalt, which are integral to the new generation of batteries. And, as we reported last month, it is China that has taken the lead on trying to address human rights issues in the cobalt supply chain (see Electric car makers in drive to remove human rights stain from cobalt)
An increasingly powerful urban middle class has pushed air pollution closer to the top of the government’s agenda
There are several factors behind this green surge. China was quick to move into the space vacated by an American President who sees global warming as “an expensive hoax”, with Chinese President Xi Jinping gaining the moral high ground and taking advantage of new opportunities to sell its clean energy solutions around the world.
An increasingly powerful urban middle class has also pushed air pollution closer to the top of the government’s agenda, and driven the decision to rein in investment in coal.
Yet coal consumption, which accounts for more than three-quarters of its power supply, is on the rise again, for the first time in three years. Partly this may be due to inconsistencies within the vast bureaucracy that is involved in administering the world’s most populous country.
Air pollution kills many thousands of people in China a year. (Credit: Hung Chung Chih/Shutterstock)
So while a city’s mayor may face censure for failing to meet air quality targets, elsewhere in the same region a new coal-fired power station could be taking advantage of generous government subsidies.
There are other barriers. Vast wind farms in the sparsely populated north-west stand idle, so distant from major population centres that the cost of connecting them to the grid isn’t worthwhile.
Huge amounts of Chinese renewable energy is still wasted too, although curtailment rates – the amount of renewable power that could have been generated and used in China but wasn’t – are on a downward trajectory. According to the National Energy Administration (NEA), which has pledged to end curtailment altogether by 2020, in 2016 17.2% of wind power production and 10.3% of solar PV, was wasted, with the figures dropping to 12% and 6% , respectively, in 2017.
China has invested more in renewables than fossil fuel energy over the last few years, so clearly financing is flowing
Still, China remains on course to meet its COP21 targets of peaking C02 emissions and generating 20% of its energy through non-fossil fuels by 2030.
According to official Chinese government data, confirmed by independent analysts The Climate Tracker, by the end of 2017 China had cut CO2 emissions by 46% per unit of economic growth from 2005 levels, against a 2030 target of 60/65% reduction.
Last year renewable energy generation from water, wind and sun accounted for 25% of power generated, up from 15% in 2007.
The country is also enjoying a boom in green finance, with green bonds now worth $90 billion ($37bn annually). While there have been concerns raised that criteria for some the green bonds issued in China allow them to be used to fund clean coal projects, Sean Kidney, chief executive of not-for-profit Climate Bonds Initiative points out that some 30% of proceeds are going to fund renewable projects.
“China has invested more in renewables than fossil fuel energy for each of the last few years, so clearly financing is flowing,” he says. “The government is providing offtake agreements [which make it easier to get the finance needed to construct facilities] as well as encouraging banks to finance – so much so that some renewable plants are being built so quickly that they're having to wait up to 18 months to get a grid connection.”
Last February, China’s National Development and Reform Commission announced the launch of a national pilot renewable energy certificates (REC) market, with the first green power trading certifications issued to 20 renewable generation projects in June.
The electrification of bus fleets is far more advanced in China than it is anywhere else in the world
China also developed its first voluntary renewable electricity certificate system last year with the launch of the Green Electricity Consumption Cooperative Organisation (GECCO), supported by nine leading Chinese and international organisations, including the World Resources Institute and The Climate Group, which administers the RE100 initiative (see Chinese companies slow to join RE100)
The Climate Group said GECCO would “work to increase corporate uptake of renewable power in China, supporting the government to reach its ambitious national targets”.
One of China’s most ambitious green projects is the vast solar farm that now, somewhat prophetically, floats on top of an abandoned coal mine in Anhui province. Developed by Chinese company Sungrow, the 166,000 panel array can generate 40MW, with the water also helping to cool the panels. A second floating farm, also in Anhui, is due to come on line this year. Developed by the China Three Gorges Corporation, it will produce 150 MW.
Also new is the Solar Expressway in the eastern city of Jinan, a 1080m long stretch of intelligent highway with technology embedded in transparent concrete that charges vehicles as they pass over.
Weaning the country off imported coal is also important for China's transport-related emissions as it pursues aggressive government targets for electric vehicles to account for at least 20% of Chinese vehicle sales by 2025. According to several recent studies the amount of coal in China's energy supply means internal combustion engine cars have a much bigger carbon footprint than EV.
Dominance of the world͛'s electric vehicle market is a key part of the Made in China 2025 initiative, an attempt to move Chinese manufacturing up the value chain, with an emphasis on quality over quantity, advanced precision engineering over toys and clothes. One example of a company that has ridden the wave is Shenzhen-based BYD (Build Your Dreams), which sold 14,000 electric buses globally last year and also opened the largest bus manufacturing facility in the US, with its California-based factory capable of building 1500 electric buses a year.
Mark Hillsdon is a Manchester-based freelance writer who writes on business and sustainability for Ethical Corporation, the Guardian, and a range of nature-based titles
including CountryFile and BBC Wildlife.
This article is part of the in-depth briefing China’s New Dawn. See also:renewable energies fossil fuels China pollution Made in China 2025 BYD Solar Expressway IEEFA renewable energy certificates The Climate Group The Climate Tracker Climate Bond Initiative