Beijing may be more addicted to coal than oil
There’s one surprise entrant in the group of oil companies announcing plans this year for how they’ll reduce emissions: PetroChina Co.
China’s oil companies, unlike their peers in the U.S. and particularly Europe, don’t traditionally treat climate targets as a major issue. Beijing, after all, isn’t even promising to hit its emissions peak until 2030.....MORE
The large fund managers that have been pressuring Western oil companies to improve their carbon commitments don’t make much difference, either. PetroChina’s chairman, Dai Houliang, is a Communist bureaucrat whose more significant job is party secretary of state-owned parent China National Petroleum Corp. His main role at PetroChina is to make sure it plays its part in guaranteeing energy security, one of Beijing’s most critical issues. As shareholders will no doubt be bitterly aware, their interests are neither here nor there:
So PetroChina’s announcement in its half-year results last week that it would seek a “near-zero” target for emissions by 2050 is unexpected. With China preparing its 14th five-year plan — probably the most crucial document in determining whether the planet can avoid devastating climate change — that might be taken as a sign that the winds of change are blowing through Beijing.
It’s probably best not to get too excited, though. In most countries, the chief objective is to minimize reliance on the worst-polluting of fossil fuels: coal. In China, however, bureaucrats are more preoccupied with self-sufficiency, so limiting oil imports is a bigger concern. In that sense, PetroChina’s announcement may just be further confirmation that it’s national security considerations, rather than climate, that’s driving energy policy in Zhongnanhai.
Have a look at what’s happening to PetroChina’s core business and it’s obvious why the company may have other reasons for pivoting to renewables. Oil output from its domestic wells has been more or less flat for four years, despite strong demand growth. While gas production has increased in line with government policy, the cost has been enormous, as we’ve written: Three-year average all-in finding and development costs for its petroleum wells are running at $21.74 a barrel, well above most Western oil majors....
Next, via Mining Weekly:
China seeks to dent its coal addiction with mega power complexes
Imagine a power plant built next to a coal mine but also operating wind turbines and solar panels. The facility hosts batteries to store electricity when supply is in excess. The main source of power could flip from the fossil fuel to clean energy, depending on weather and price.
Spending billions of dollars to integrate power generation in this kind of mega-complex is now up for discussion in China, the world’s largest consumer of coal and its biggest promoter of renewables. While housing the two in the same facility creates obvious efficiencies, there’s a second purpose that has the potential to loosen the dirtiest fossil fuel’s choke-hold on China’s energy generation -- like a cuckoo snuggling up in another bird’s nest.....MUCH MORE
“This is part of a national strategy to support battery, wind and solar demand, and develop these key strategic technologies and the corresponding supply chains,” according to Alex Whitworth, research director at Wood Mackenzie. “So in a way, it can be seen as a government-directed cross-subsidy from fossil fuel profits to new energy technology.”
It’s a theme playing out at the corporate level, as coal miners look to add clean energy assets, and utilities shift spending to renewables. The national plan is to reduce China’s reliance on coal to cut pollution and mitigate global heating, but it’s slow going. Beijing wants to derive 20% of its energy consumption from non-fossil fuels by 2030, compared with about 15% last year.
China’s project-based approach to combining dirty and clean energy may be unique, and the government has begun seeking opinions on whether such mega-complexes are viable. Crucially, its starting point is that the amount of coal power involved would be strictly controlled, suggesting that coal’s role in the projects isn’t intended to be a dominant one. And the nation has some natural advantages, given that its major mining regions such as Inner Mongolia and Xinjiang also have a lot of renewable power sources on hand.
PERIODIC NATURE
Clean energy’s biggest challenge is its periodic nature, which disrupts the daily planning of operations at the power grid....
No kidding says California.
And finally, Reuters, September 7/8:
China's sliding coal imports weakens one of the last bullish supports
LAUNCESTON, Australia, Sept 8 (Reuters) - Among China’s generally strong imports of major commodities in August there was one standout area of weakness - the large drop in coal.....MORE
China’s coal imports fell to an eight-month low of 20.66 million tonnes in August, down 20.8% from July’s 26.1 million and a massive 33% below the level recorded in August last year, according to customs data.
The soft August outcome meant the growth in imports in the first eight months of the year slipped to just 0.2% from the same period in 2019, down from 6.8% in the first seven months in the year.
The lack of growth in coal imports in the January to August period contrasts with a 12.1% rise in imports of crude oil, an 11.8% gain in iron ore and a 34% surge in unwrought copper.
A weaker number for coal had been expected in August given market participants have been warning of Beijing’s unofficial efforts to restrict imports in order to keep domestic prices in a price range that supports miners, but doesn’t cause costs for power generators or industrial users, such as steel mills, to rise too high.....
What the heck is China doing with all that copper?
