China’s green-en­ergy revo­lu­tion

Financial Mirror (Cyprus) - - FRONT PAGE -

China gen­er­ates most of its elec­tric­ity by burning fos­sil fu­els, just as ev­ery ris­ing eco­nomic power has done since the Industrial Revo­lu­tion. But to fo­cus on this sin­gle fact risks over­look­ing a no­table trend. The Chi­nese sys­tem of power gen­er­a­tion is turn­ing green – far more quickly than any other sys­tem of com­pa­ra­ble size on the planet.

This trend is vis­i­ble in three ar­eas. The first is elec­tric­ity gen­er­a­tion. Ac­cord­ing to data re­leased by the China Elec­tric­ity Coun­cil, the amount of power that China gen­er­ated from fos­sil fu­els in 2014 de­creased by 0.7% year on year, the first drop in re­cent mem­ory. Mean­while, power gen­er­a­tion from non-fos­sil-fuel sources in­creased by 19%.

Re­mark­ably, nu­clear en­ergy played only a small role in this change. Elec­tric­ity gen­er­ated by strictly green sources – wa­ter, wind, and so­lar – in­creased by 20%, with the most dra­matic growth oc­cur­ring in so­lar power gen­er­a­tion, which rose a stag­ger­ing 175%. So­lar power also sur­passed nu­clear in terms of new en­ergy pro­duced, pro­vid­ing an ex­tra 17.43 ter­awatt-hours last year, com­pared to 14.70 ter­awatt-hours from nu­clear sources. And, for the third con­sec­u­tive year, China gen­er­ated more elec­tric­ity from wind than from nu­clear en­ergy. Given this, the ar­gu­ment that China will be de­pen­dent on nu­clear power plants for non-car­bon sources of elec­tric­ity ap­pears to have lit­tle merit.

The sec­ond area in which the green trend has be­come ap­par­ent is China’s to­tal elec­tric­ity-gen­er­at­ing ca­pac­ity. The coun­try’s power sys­tem is now the world’s largest, ca­pa­ble of pro­duc­ing 1.36 ter­awatts, com­pared to the United States’ one ter­awatt.

Di­rect com­par­isons of dif­fer­ent power sources are dif­fi­cult, be­cause the use of wind, so­lar, nu­clear, and fos­sil­fuel plants varies ac­cord­ing to the time of day. But a look at an­nual data can of­fer in­sights into how the en­tire sys­tem is chang­ing.

Last year was the sec­ond in a row in which China added more gen­er­at­ing ca­pac­ity from non-fos­sil-fuel sources than from fos­sil-fuel sources. China in­creased its abil­ity to gen­er­ate elec­tric­ity from fos­sil fu­els by 45 gi­gawatts, to reach a to­tal of 916 gi­gawatts. At the same time, it in­creased its ca­pac­ity to pro­duce elec­tric­ity from non-fos­sil-fuel sources by 56 gi­gawatts, achiev­ing a to­tal of 444 gi­gawatts. Wind, wa­ter, and so­lar plants added 51 gi­gawatts of gen­er­at­ing ca­pac­ity.

As a re­sult, wind, wa­ter, and so­lar power ac­counts for 31% of China’s to­tal elec­tric­ity-gen­er­a­tion ca­pac­ity, up from 21% in 2007, while nu­clear power ac­counts for an­other 2%. Th­ese re­sults ex­ceed the goal es­tab­lished by China’s 12th Five-Year Plan, which pro­jected that power gen­er­at­ing ca­pac­ity based on non-fos­sil-fuel sources would ac­count for ap­prox­i­mately 30% of the coun­try’s elec­tric­ity sys­tem by 2015.

Fi­nally, the trend to­ward green en­ergy can be seen in China’s in­vest­ment pat­terns. The ev­i­dence is plain: The coun­try is putting more money to­ward green sources of elec­tric power than to­ward those re­liant on fos­sil fu­els. In­deed, China is spend­ing more on green en­ergy than any other coun­try.

In­vest­ment in fa­cil­i­ties pro­duc­ing en­ergy from fos­sil fu­els has con­sis­tently de­clined, from CNY 167 bln (roughly $24 bln) in 2008 to CNY 95 bln in 2014 ($15.3 bln), while in­vest­ment in non-fos­sil-fuel sources has in­creased, from CNY 118 bln in 2008 to at least CNY 252 bln in 2014. The share of en­ergy in­vest­ment go­ing into re­new­able elec­tric gen­er­a­tion has in­creased steadily, reach­ing 50% in 2011, up from 32% just four years be­fore. In 2013, re­new­ables’ share of in­vest­ment reached no less than 59%.

Much de­pends on the suc­cess of China’s en­ergy re­forms, and in par­tic­u­lar on its ef­forts to build the world’s largest re­new­able power sys­tem – an am­bi­tion far larger than any­thing imag­ined, much less at­tempted, in the West. This makes it all the more im­por­tant to re­port ac­cu­rately on the sys­tem as it evolves, in or­der to com­pre­hend the over­all di­rec­tion of change.

China’s power sys­tem re­mains heav­ily based on coal, and much more will be burned be­fore the sys­tem can ac­cu­rately be de­scribed as more green than black. But the di­rec­tion of change is clear. This needs to be ac­knowl­edged – and fac­tored into dis­cus­sions of global en­ergy and en­ergy pol­icy.

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