Always minding the gap between word and deed.
From MacroPolo, April 7:
Beijing Lines Up the Pieces for Peaking Emissions by 2030
When President Xi Jinping announced in September 2020 that China would aim to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, he effectively changed the metrics by which the country’s energy and climate policies are judged. For the first time, China has clear mid- and long-term climate targets, and all eyes are now focused on how it will get there.
The latest 14th Five–Year Plan (FYP) was supposed to offer more clarity on the “how.” But it turned out neither as clear nor as ambitious as some had hoped. In the 75,000-word text, “carbon neutrality” (碳中和) was mentioned just once. And the two key binding targets—18% carbon intensity and 13.5% energy intensity reductions from 2021-2025—leave ample room for absolute growth in emissions.
Yet, when Xi spoke at the Central Committee on Finance and Economics just days after the conclusion of the National People’s Congress (NPC), he struck a decidedly different note. Xi reiterated the commitment to peak emissions by 2030, emphasizing that it was a major strategic decision of the Chinese Communist Party (CCP) and that it would be a testament to the CCP’s ability to govern.
What the 14th FYP lacked in quantitative ambition, Xi made up for with ambitious political commitment. But why the seeming paradox? This is likely because the ambition is tied to the 2030 timeline, and Beijing still wants to buy time to make the difficult adjustments across the economy, from industry vested interests to institutional reforms and electricity markets. Therefore, the next five years will be mainly about lining up the pieces to get more significant outcomes on decarbonization post-2025.
As highlighted in my Forecast 2025, the clean energy transition requires more than just expanding renewables. It will also entail systemic changes and the introduction of new market mechanisms, all of which takes times to see results and aren’t readily quantifiable. With provinces and industries working to develop their goals out to 2030, all these factors explain why Beijing was rather modest on energy targets in the 14th FYP.
This analysis on China’s energy landscape picks up where the 2025 energy forecast left off. It first looks at the trends for expanding renewables and nuclear in the energy mix and the longstanding challenge of curbing reliance on coal. Then it examines more closely the interest-driven and institutional challenges Beijing faces, and areas where there might be more progress than others.
Balancing Energy Security with Decarbonization
As anticipated in the energy forecast, the 2025 target for non-fossil fuels as a share of overall energy mix has been set at 20%. Nuclear will contribute to that target, as its installed capacity is expected to rise from just over 53GW today to 70GW as part of the 14th FYP.
But the bulk of non-fossil fuels will come from renewables, which the National Energy Administration (NEA) expects to make up two-thirds of additional energy capacity over the next five years. When it comes to solar and wind, Beijing has already committed to installing 1,200 GW by 2030 as part of its nationally determined contribution to the Paris agreement.
Reaching that target requires solar and wind installations—which stood at just over 530 GW at the end of 2020—to more than double over the next decade. Although that sounds ambitious, it tracks with the average growth of renewable installations in recent years. This suggests that the 1,200 GW target may just be a floor that China aims to overshoot.
Yet despite the bullish outlook on renewables, recurrent concerns over energy security in the near term mean that coal power will have runway to expand. Although it is yet unclear how much coal growth is planned over the next five years, the rising concern for energy security provides a strong rationale for allowing some coal capacity expansion.
The expansion underway since 2019 suggests that banning new coal plants altogether is unlikely before 2025, though Beijing will likely manage how much coal capacity actually expands through administrative actions. For example, a highly publicized central government inspection sternly reprimanded the NEA for greenlighting excessive new coal installations....
....MUCH MORE
A stern reprimand?Recently:
"China generated 53% of the world’s total coal-fired power in 2020"
"China's new coal power plant capacity in 2020 more than three times rest of world's"
"Why Is China Placing Huge (Global) Bets On Coal?"
