By Timothy Ang
President Xi Jinping was lauded by global leaders in Davos two weeks ago for his party’s commitment to clean energy, but environmental data suggests a movement of the Chinese economy in the opposite direction.
In 2017, China’s electricity use jumped 6.6%, according to the National Development and Reform Commission. Though renewable energy production did increase, the majority of this demand was met by burning more coal. China last year also became the world’s foremost consumer of oil, overtaking the US.
China currently accounts for more than a quarter of global carbon emissions, and produces more carbon from burning fossil fuels than the US and Europe combined. And as the Chinese consumer class expands further, its energy demands will grow accordingly.
All of this would appear to be at odds with the government’s pronounced pro-renewable policies, but the truth is that China has made huge progress on cleaning up its energy sector during its 13th Five-year Plan, which runs from 2016 to 2020.
As with every state that has had to address the environmental drawbacks of its economic growth, China is actively searching for a way to balance the prosperity of its people and its ecological responsibilities. The situation could be summarised as such: China is making the biggest mess, but is trying the hardest to clean up after itself.
In October, the Chinese Communist Party replaced “fast economic growth” with “high-quality development” as its overriding policy objective at the 19th Party Congress, meaning that environmental goals will for the first time be given equal importance to GDP targets.
Unlike the US, however, where President Donald Trump sees only disadvantages in trying to promote clean energy, China appears to be embracing its green revolution. “Even in China, where coal is—or was—king, the government still recognizes that the economic opportunities of the future are going to be in clean energy,” said Alvin Lin, China Climate and Energy Policy Director of the Natural Resources Defense Council, in an interview with CNN last year.
Thanks to strong government support, China is now the undisputed global leader in renewable energy production. Its industry prodigiously builds and exports infrastructure for solar, hydro, wind, and nuclear power, backed by a generous $367 billion of investment from Beijing until 2020. Over two-thirds of the world’s solar panel stock is made in China, and half of its wind turbines.
At home, around 55 gigawatts of solar capacity were installed last year, almost double the previous year, and there is every indication that this fast growth will continue. More mass-projects like the 166,000-panel floating solar farm in Anhui are due for the near future.
In nuclear power, there are similar ambitions to dominate the global industry. On Wednesday, two of the country’s largest nuclear technology firms agreed a $600 million merger deal at the behest of the government, creating a RMB 620 billion ($93 billion) powerhouse with the “financial firepower to take on the significant capital costs involved in developing new nuclear reactors – both domestically and abroad,” according to Georgina Hayden, head of power and renewables at BMI Research.
The supposedly cutting-edge Hualong reactor currently being developed in China is about to be exported all over the world. Just in November, the Pakistan government agreed to allow China to build its third Hualong in the country. There is also one due for installation in Bradwell, UK, after governmental reviews.
At the same time, businesses are being strongly deterred from over-consumption of dirty fuels. Last month, China announced the rolling-out of a national carbon trading market, an idea by no means original to the East. Under the new scheme, Chinese manufacturers will require permits to emit certain quantities of carbon, which they can purchase from other, less-polluting companies.
The eventual goal is to continue China’s path of cutting the carbon intensity of its economy. Since 2005, emissions per unit of GDP have dropped 20% and analysts expect this to fall a further 20-25% by 2020. This cleaning up of energy, therefore, is actually pushing down energy costs.
Renewable energy has become a significant source of Chinese job growth, too. The International Energy Agency estimates that 3.5 million people are already employed in the country’s renewable energy sector, with the figure expected to jump to 10 million by the end of the decade.
This will more than offset the predicted 2.3 million job cuts that will take place in the coal mining industry during the next three years, according to a report produced by the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences.
China’s mid-term goals are tall but realistic. By 2040, the government wants 40% of its energy generation to come from renewables, up from the existing 24%, which is in line with current European targets. Coal, which now accounts for around 65% of energy creation, should fall to a similar 40% over the same period.
The difference of the Chinese experience, however, is that it continues to exceed expectations. Even when compared with energy sector forecasts from a few years ago, China is having to revise its models. In 2012, the Chinese Academy of Social Sciences predicted that carbon emissions would peak in 2050. Now, some say this could happen as soon as 2025.
The 2017 uptick in energy consumption from coal will certainly be undesirable for Xi Jinping’s government, but it does not put into question China’s long-term commitment to clean energy. It is inevitable that during strong growth years like 2017 energy demand increases, and it may be a while before solar or nuclear become the country’s primary energy sources. But China has made it clear that it’s in it for the long haul.
Far from discouraging the government’s policy implementation, last year’s figures are likely simply to reinforce the existing attitude of ‘more needs to be done.’
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