Green sector a key field for investment
Smart approaches and close international cooperation are needed to realize energy evolution
Advances in green and lowcarbon technologies are the key to building a modern energy system and promoting the high-quality development of the energy industry.
Amid the COVID-19 pandemic, China has witnessed a technological revolution and industrial transformation, a new landscape of global climate governance and integration of new energy and information technology. The goals of peaking carbon emissions before 2030 and achieving carbon neutrality before 2060 necessitate reform of the energy system, which calls for urgent green and low-carbon technological innovations.
The transformation of the energy structure has made energy production shift from mainly focusing on centralized generation in the past to both centralized and distributed generation. Distributed energy production, however, calls for further development of new ways of storing energy, generating hydrogen energy and creating smart microgrids. The integration of energy and information technology has boosted smart transformation of the traditional energy system.
Innovative green and low-carbon energy technologies are needed to ensure the stability and security of energy supply chains. The key to maintaining energy security is to give full play to domestic resources. Since coal is a major energy resource in China, the country needs to improve basic research, technical processes, and key equipment and demonstration projects for coal-tooil and coal-to-gas technologies for clean coal use.
The core of the lowcarbon energy transformation lies in promoting development of non-fossil energy.
While people can get access to photovoltaic and wind power at moderate prices, a new power system with multiple types of solar and wind power generation technologies, new ways of energy storage, hydrogen energy and smart grid technology need to be developed. The new energy resources should be made affordable for the public to replace traditional energy resources.
As the low-carbon transformation gains momentum, the green industry has become a key field for investment. Venture capital funds are gradually shifting their money from green technology to other fields.
According to the International Energy Agency, almost half or more of the current technologies should be redeveloped to achieve near-zero carbon emissions.
China needs to promote the use of renewable energy to reduce carbon emissions and the recovery of the green economy. It also needs to enhance its input in technological innovation. It has made progress in the building of new power systems, innovation of safe and efficient energy storage, hydrogen energy technology, and the promotion and application of pollution and carbon reduction technologies. However, the investment in innovation in key fields such as electrification, hydrogen energy and biomass energy, as well as carbon capture, utilization and storage, is insufficient.
During the 14th Five-Year Plan period (2021-25), China aims to increase the investment in energy R&D by more than 7 percent annually and make key technological breakthroughs in 50 new fields. The R&D input in green and low-carbon technologies needs to be further improved. Green transformation and technological progress should be pushed ahead step by step. The promotion of technology application pilot and demonstration projects will help reduce costs, control investment risks, improve users’ experience, and boost technological progress. New technologies that are still under R&D and pilot programs will help cut almost half of the emissions by 2050. In heavy industries and long-distance transportation, technologies under R&D can contribute more to emissions reduction. Besides R&D, the infrastructure needed for new green technologies should be improved. To boost the use of hydrogen technology, new pipelines should be built to transport the captured carbon dioxide. And a system is also needed for transporting hydrogen between ports and industrial areas.
Since large-scale construction of public infrastructure is not attractive enough for many private investors, public funds are needed for new energy projects and industrial facilities in many emerging and developing economies. The government needs to launch reforms on the regulatory framework and formulate plans and incentives to promote cooperation between different participants, stabilize the market and investors’ expectations, and attract private investment, which will provide strong support for building or renovating infrastructure such as smart transmission grids and distributed grids.
Climate change is a global challenge, for which international scientific and technological cooperation should be prioritized. Global sharing and cooperation is essential for technological progress. Smart approaches and close international cooperation are needed to realize the energy transformation and climate protection to drive innovation and sustainable development.
Through international cooperation, countries can share incident alerts and best practices to improve security. The international community should work together to promote the use of hydrogen energy and clarify safety and environmental standards. China needs to further participate in global innovation, and enhance green and low-carbon technological innovation through global cooperation.
Xu Yujie is executive deputy director of the Research Center for Carbon Neutrality and Finance at Central University of Finance and Economics. Mo Lan is a specially appointed researcher of the International Institute of Green Finance at Central University of Finance and Economics. The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.