The challenge of China's de-carbonisation

Source: FT

Stopping burning coal is the single biggest step we can take to reduce emissions.  China is the single largest emitter, producing 28% of global emissions.  It is also the world's largest coal consumer, with more than 50% of the market.  So weaning China off coal is critical to the world's attempts to de-carbonise.  And the government, or at least the central government, knows it.

From IEEFA:

China’s “unprecedented challenge” to decarbonise its energy production could be met if the government is ambitious enough, researchers have argued.

A new report, partly written by the government-backed National Development and Reform Commission (NDRC), has outlined how phasing out coal power could help China meet its commitment under the Paris Agreement.

“Achieving deep decarbonisation and zero carbon in China’s power generation within the next 30 years or even earlier will be an unprecedented challenge,” said the report’s co-lead author Jiang Kejun, from the Energy Research Institute – part of the NDRC.

He said the report, which looked at 3,000 existing coal power generation units, “provides valuable information” for decision-makers hoping to achieve this lofty goal, particularly while China prepares its next five-year plan.

To achieve results compatible with limiting global warming to 2 degrees C – the commitment enshrined in the Paris Agreement – China would need to follow a “three-principle strategy,” the report argued. These principles are:

1. no new coal plant construction, 
2. rapid shutdown of older and inefficient plants (about one in five existing plants), 
3. a shift of coal generation from baseload to peak load in China’s power system (i.e. relying on it only during times of high power usage, rather than for supplying the minimum demands of the grid at any given time).

“[The report] shows that a sustainable coal power phase-out in China is possible, through rapid retirements of the low-hanging fruit and gradually reduced operating hours of the remaining plants,” Jiang said. “Well-designed policies can help lower the cost of coal power deep decarbonisation, contribute to a sustainable transition of existing coal plants, and reduce the potential impact on employment.”

The recommendations are all sensible, and given that unsubsidised renewables have now reached grid parity (i.e., their costs are now equal to or lower than the average wholesale price of electricity), likely to be acted upon.  If so, this will be very good news.  It will mean that China's emissions will peak.  China is already switching its car sales to EVs, with ambitious percentage targets for EV penetration.


From Michael Liebreich:

India and China alone have between them a pipeline of 280GW of new plants, bigger than the entire current U.S. fleet and equivalent to 15% of current global capacity. However, this does not begin to tell the full story.

First, what really matters is not capacity, but how much coal is actually burned. Over the past decade, capacity factors for thermal generation have been falling around the world, in China’s case to record lows. Globally – not that you would know it from the mainstream news – coal consumption in the power sector has been flat since 2012; preliminary figures for 2019 show a drop of around 3%.

Just this month it was announced that over half of the power plants operated by China’s Big Five state-owned utilities are running at a loss. The government has plans for up to one third of them to shut by 2021, removing 15% of the country’s coal capacity. As for India, despite its 85GW pipeline, on average it has commissioned less than 10GW per year for the past three years.

The world needs to cut its emissions by at least 1/3rd by 2030.  If China's emissions peak this year or next, that will be a key factor to making this possible.  China has no demented and depraved oil billionaires, and no Republican Party, to stop it transitioning.  And now renewables cost the same as or are cheaper than coal, the transition should start to build up steam.  As it were.