China could limit emissions by 2025, lead clean revolution by 2050

Ilario D'Amato
Reading time: 7 minutes
8 May 2015

BEIJING: Renewable energy could meet more than 60% of China’s primary energy demand and 85% of its electricity consumption by 2050, a new study founds.

The China 2050 High Renewable Energy Scenario and Roadmap study, authored by the Energy Research Institute and Energy Foundation China, also found that it is both technically and economically feasible for the country to limit its carbon emissions from the energy sector by 2025, with coal consumption curbed by 2020.

“The newly released scenario study supports a general trend already unfolding that renewables will play a much larger role in China’s energy revolution,” said Changhua Wu, Greater China Director of The Climate Group. “With continued improvements in energy storage and smart information and communications technology, China, together with other major economies, will lead the scale-up of clean energy at a pace needed to tackle climate change. China’s contribution, besides emissions reduction, also includes fast industrialization of clean tech, which in turn helps the technologies become more affordable and scalable, faster” 

Coal dependence

China accounts for almost half of the global annual production and consumption of coal, with coal representing 66% of its total energy mix last year. This is good progress from 2011, when coal accounted for 69% of China’s energy mix – with oil at 18%, hydroelectric at 6%, natural gas at 4%, other renewables at 1% and nuclear at less than 1%.

At the same time, recently the National Bureau of Statistics of China reported the country’s coal consumption fell by 2.9% in 2014, while its total energy consumption grew. Also, according to recent analysis, the utilization rates at China’s thermal power generators fell to a lowest-ever 53.7% last year, down from 57.3% in 2013 – a drop in coal use of 18 million tons.

Now, the new report analyzes how China can gradually phase out its fossil energy dependence, particularly on coal. And the numbers give more than one ray of hope. Last year, the country was the top investor in the clean energy investment sector, collecting a record US$89.5 billion – an increase of 32%. China is also the leading nation for solar photovoltaic installations, with about 30 gigawatts (GW) of capacity and plans for an additional 15 GW of power by the end of this year.

The nation remains the biggest market for wind power in 2015, with installations rising to a record 38% compared to the previous year – adding 20.7 GW, Bloomberg reports. China reached 92 GW of wind energy capacity in 2013, with an annual increase of 24%.

“China needs to press ahead with significant reforms in energy production and consumption patterns to fully realize its goal of a clean, low carbon, secure and reliable energy system by 2050,” says the report. This week, the Central Committee of the Communist Party of China and the State Council issued new tighter guidelines that follow this pathway, aiming to raise the share of non-fossil fuels in primary energy consumption to around 15%, up from less than 10% in 2013.

High penetration of renewables

According to the report, by 2050 China’s population will be 1.38 billion and its GDP will reach RMB 282 trillion (US$45.44 trillion), a 7-fold increase by 2010 which will position the country as the biggest economy in the world. In this scenario, the country’s crucial economic growth is coupled with environmental protection to avoid the already clear effects of climate disruption.

To meet this ambitious but necessary goal, it is fundamental China puts a cap on the consumption of fossil fuels and invests in energy efficiency. Under the high renewable energy penetration scenario, by 2050 China’s end-use energy demand is projected to be 3.2 billion tons of coal equivalent (tce), in which over 60% is electricity, and primary energy supply will be 3.4 billion tce. Total electricity consumption will increase to between 13.5 and 15 trillion kilowatt-hours (kWh), a per capita range of 10-11,000 kWh.

However, even in this scenario coal will continue to play a role. Among end-use energy consumption, 900 million tce will be directly consumed energy from fossil fuels, but renewables will gradually substitute it, accounting for 60% of the mix. As for power supply, 86% will come from renewable energy. The primary energy supply will be in total 3.4 billion tce, with 62% from renewables, and an increase in energy efficiency of 90% from 2010.

Last year, China announced a pledge to peak its CO2 emissions by 2030. The report indicates that the country can easily meet this target, peaking coal consumption by 2020. “Renewable power is the essential replacement for fossil energy,” states the report. “The high renewable energy penetration power scenario enables China to solely rely on its domestic energy resources and maximize renewable energy utilization. China will increase investment in the renewable energy industry and grow it into a new economic growth point and green employment opportunity.”

According to the report, in 2050 China’s total installed power capacity will reach 7.1 billion kilowatt (kW), including 2.7 billion kW of solar power, 2.4 billion kW of wind power, 880 million kW of coal-fired power, 550 million kW of hydropower, 220 million kW of natural gas power and 100 million kW of nuclear power. To achieve that, the electricity transmission network must be transformed to a platform for optimizing resources allocation, sustained by technological and institutional innovation.

This important goal can be achieved at almost no additional cost. In fact, in this scenario the average cost per kWh of electricity will rise slightly between 2030 and 2050, but basically remain between RMB0.672/kWh and RMB0.685/kWh (US$0.108/kWh and 0.110/kWh), while in the reference scenario the average cost stays flat around RMB0.67/kWh (US$0.107/kWh). However, such numbers don’t take into consideration the social, environmental and health costs associated with the different sources of energy.

Cleaner economy

“As a new economic growth point, renewable energy can significantly improve the development quality of the overall economy,” concludes the report.

The added value of the wind power industry will reach RMB3.8 trillion (US$61 billion) in 2050, while the solar power industry will contribute RMB2.8 trillion (US$45 billion). The total added value of the renewable energy industry supply chain will grow to RMB17 trillion (US$2.74 trillion), with record electric vehicle production worth about RMB8 trillion (US$1.3 trillion). In total, the development of more renewable energy plants will create 12 million jobs.

But this will only be possible if the government “formulates and implements clean low carbon energy revolution strategy and action plan, which prioritize renewable energy,” states the report, “establishing power market mechanism adaptable to handle renewable power and improving the green tax system and carbon trading market system to create a fair playing field for renewable energy.”

The government must also establish “sound systems of legal protection, comprehensive management and professional regulation adaptable to renewable energy development”.

Industry must also play its role in shaping this better future, by building major research and development platforms and accelerating industrial processes, to sustain the large-scale development of renewable power generation while fully promoting renewable heating and fuel use.

Crucially, the power sector must build a new type of grid-based public service platform, while optimizing the deployment, structure and operation of flexible power. The sector must also develop demand-response mechanisms and energy storage on a large scale, the authors suggest.

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by Ilario D'Amato

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