China’s green energy revolution?

Rajinder Dhesi

China, the world’s largest energy consumer, has recently announced a new strategy to wean itself off its dependence on fossil fuels, which for the last two decades have powered the state’s unparalleled economic growth. Like other infrastructure projects, the scale of China’s foray into renewables is enormous; $136 billion was spent on renewable infrastructure projects in 2017, more than the total of the EU and US combined.

Few in China dispute the need to move away from fossil fuels. Despite being the world’s largest coal producer and holding the third largest reserves, since 2008 China has had to import coal to keep up with demand. Coupled with this, China in 2017 overtook the USA as the largest oil importer (importing an average of 8.4 million barrels per day). The reliance on overseas imports leaves China’s future economic growth vulnerable to future commodity price fluctuations, particularly as the price of oil increased steadily during 2017 due to OPEC supply cuts. Moreover, there is a growing political consensus in Beijing to reduce fossil fuel usage. The expanding and urbanised middle class do not want to see their cities polluted. Nor do rural citizens, who have violently protested the construction of new coal fired power stations that are viewed as the cause of much illness and damage to the ecosystem. There is also a limit to the efficiency of coal; currently on average 38.6% of the heat generated from coal is transformed into electricity and with large scale investment the most efficient coal power generators are only 44% efficient. Consequently, China’s National Energy Administration (NEA) cancelled the construction of 103 new coal power plants in January 2017.

China’s conversion towards renewable energy began with enormous hydroelectric dam projects, such as the Three Gorges Dam on the Yangtze River; in 2015, hydroelectric contributed 20% of the nation’s energy demand (second to coal). However, though hydroelectricity has significantly contributed to a decrease in fossil fuel usage, there are a finite number of potential future sites for damming and each construction project is accompanied with huge costs and negative environmental outcomes.

Instead, solar technology is the largest growing renewable sector in China. Installations of photovoltaic cells totalled 126 GW in 2017, up 66% from the previous year. China, through its multitude of state owned enterprises (SOEs) and government coordinated private companies, have began to export solar cells abroad, giving Beijing another boost in its aim to become the world’s largest superpower. However, the governments of two of the largest potential markets (India and the USA) have responded by setting tariffs of 30% and 70% respectively. On a long-term basis, China has announced aims to ban fossil fuel powered automobiles and replace these with electric vehicles.

Overall, there is still uncertainty and doubt lurking in this pro-renewable, anti-fossil fuel narrative in China. Despite a decrease in the percentage that fossil fuels contribute to the energy mix, the absolute usage of fossil fuels has and will increase (coal consumption is predicted to rise 140GW or 15% from 2016-2020), as China’s economy grows further.

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