Switch­ing off? China’s en­ergy aims re­quire a rad­i­cal shift in pri­or­i­ties

Arab News - - Business News - CYLDE RUS­SELL

Chi­nese Pres­i­dent Xi Jin­ping has done the easy part of chang­ing the path of the world’s big­gest pol­luter to be­come car­bon neu­tral in set­ting a tar­get 40 years in the fu­ture. Now comes the much tougher part of tak­ing costly ac­tion to­day, and chang­ing an en­trenched mind­set of build­ing fos­sil fuel en­ergy sys­tems in the world’s most pop­u­lous na­tion.

Xi told the UN Gen­eral Assem­bly on Sept. 22 that China aims to be car­bon neu­tral by 2060, and achieve a peak in emis­sions be­fore 2030. How­ever, Xi didn’t of­fer much in the way of de­tail as to how this would be achieved, open­ing his gov­ern­ment up to crit­i­cism that a tar­get 40 years in the fu­ture is largely mean­ing­less with­out im­me­di­ate ac­tion.

China isn’t alone in re­ceiv­ing such crit­i­cism, with en­vi­ron­men­tal ac­tivists and in­vestors be­ing crit­i­cal of ma­jor oil and gas com­pa­nies, as well as min­ing gi­ants, that have also an­nounced long-term tar­gets with­out com­mit­ting to much short-term ac­tion.

The prob­lem for China is that it is still in­vest­ing, or plan­ning to in­vest, vast sums of money in coal-fired power plants, coal-to­chem­i­cal ven­tures and other projects based on fos­sil fu­els such as nat­u­ral gas and crude oil. These will be long-life as­sets of 30 to 40 years, and if they go ahead, it is hard to see how China will be able to meet its tar­get of car­bon neu­tral­ity by 2060.

China had 1,023 gi­gawatts (GW) of coal-fired power ca­pac­ity in op­er­a­tion as of July 2020, ac­cord­ing to the Global Coal Plant Tracker. It also had 98.5 GW un­der con­struc­tion and a fur­ther 153.7 GW an­nounced, pre-per­mit­ted and per­mit­ted, ac­cord­ing to the data­base. To put these num­bers into per­spec­tive, the amount of coal-fired power un­der con­struc­tion in China is more than half of the global to­tal, while the oper­at­ing fleet is half of the world’s gen­er­a­tion ca­pac­ity.

A to­tal of 361 GW of coal-fired gen­er­a­tion was re­tired be­tween 2000 and 2020, ac­cord­ing to the data­base, mean­ing that China is cur­rently build­ing more than a quar­ter of what the rest of the world closed in the past two decades. Of course, there is no guar­an­tee that all the planned new coal-fired units will be built, but so far China shows lit­tle sign of step­ping back or chang­ing di­rec­tion.

In­vest­ment plans for eight ma­jor Chi­nese prov­inces, which ac­count for half of the coun­try’s emis­sions, show that cur­rently of the 6,200 bil­lion yuan ($910 bil­lion) ear­marked for in­vest­ment in en­ergy and trans­port, about 35 per­cent is pro­posed for fos­sil fuel projects, just be­hind 36 per­cent for rail in­fra­struc­ture, ac­cord­ing to an ar­ti­cle pub­lished on Wed­nes­day on cli­mate change web­site Car­bon Brief.

Just 13 per­cent of the plans could be viewed as low-car­bon, in­clud­ing re­new­able en­er­gies, nu­clear, hy­dropower, elec­tric­ity net­works and elec­tric ve­hi­cles, re­searchers Lauri Myl­lyvirta and Yedan Li said in the ar­ti­cle.

Even for China’s car­bon emis­sions to peak prior to 2030, a rad­i­cal shift in en­ergy in­vest­ments will have to take place.

This means that Bei­jing will have to en­force the changes upon the prov­inces, which have been all to used to build car­bon-in­ten­sive projects as part of stim­u­lus ef­forts, first to re­cover from the 2008 global fi­nan­cial cri­sis and now to boost the econ­omy af­ter the hit from the novel coro­n­avirus pan­demic.

The up­com­ing 14th five-year plan, due to be re­leased next year, pro­vides the op­por­tu­nity for such a re­set of poli­cies, but the changes will have to be rad­i­cal and ex­pen­sive. Fos­sil fu­els cur­rently ac­count for about 85 per­cent of China’s to­tal en­ergy mix, with re­new­ables mak­ing up the re­main­ing 15 per­cent. Those per­cent­ages would likely have to switch around by 2060 to achieve car­bon neu­tral­ity. It is likely that if Bei­jing does seek to de­liver on Xi’s prom­ise, then a multi-lay­ered ap­proach will be needed, with mas­sive in­vest­ment in re­new­able gen­er­a­tion and bat­tery stor­age, a switch to elec­tric ve­hi­cles, switch­ing man­u­fac­tur­ing to elec­tric­ity, es­pe­cially in steel, and em­ploy­ing new tech­nolo­gies such as hy­dro­gen and car­bon cap­ture.

But per­haps the most im­por­tant thing to watch is whether China starts to can­cel its coal-fired build­ing plans and re­place them with cleaner tech­nolo­gies.

None of this will be easy, but if China does un­der­take such a ven­ture, it will pro­vide a boost to pro­duc­ers of the com­modi­ties needed to switch to re­new­ables and elec­tric­ity.

Bat­tery met­als such as lithium, cobalt and nickel are ob­vi­ous win­ners, but so are cop­per, iron ore (as­sum­ing a cleaner way to make steel is de­vel­oped) and emerg­ing pro­duc­ers of green hy­dro­gen.

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