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Can China Curb Carbon Emissions?

Tags: Renewable Energy , China , Global Warming , Climate Change , Energy

Hiranuma, Hikaru

March 01, 2016


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In the wake of the Paris Agreement on climate change, all eyes are on China, the world’s biggest carbon emitter, to see if it can put the brakes on fossil fuel consumption while maintaining economic growth. Hikaru Hiranuma examines the evidence for signs of a seismic shift in Beijing’s domestic energy policy.

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On December 12 last year, the Paris climate conference (COP 21) adopted the Paris Agreement, a groundbreaking international framework for stemming climate change in the coming decades. In the document, the parties to the UN Framework Convention on Climate Change agreed to take concrete measures to achieve zero net anthropogenic emissions sometime during the second half of the twenty-first century with the long-term goal of holding the average global temperature increase to within 2°C (and preferably 1.5°C) of preindustrial levels.

Although the Paris Agreement does not impose country-by-country targets for reducing greenhouse gas emissions, it does mandate that all of the parties—including the United States and China—draw up and submit their own targets and adopt domestic policies to achieve them.

Now it is up to each country to take concrete action, and one of the most carefully watched countries will be China, the world’s biggest greenhouse gas emitter. How Beijing meets the challenge is sure to have a major impact on government policies elsewhere in the world.

An Ambitious Energy Roadmap

The China 2050 High Renewable Energy Penetration Scenario and Roadmap Study may provide some clues as to where China’s energy policy is heading in the wake of COP 21.[1] Released by the Energy Research Institute (part of the National Development and Reform Commission) and the Energy Foundation China in April 2015, a few months in advance of the Paris climate conference, the report calls for a wholesale shift toward such renewable energy sources as wind and solar in order to achieve the three goals of independence from fossil fuels, economic prosperity, and environmental recovery, with the overarching development goal of building a Beautiful China” (Figure 1).

Figure 1. The Goal of Building a “Beautiful China”


Source: Energy Foundation China, China 2050 High Renewable Energy Penetration Scenario and Roadmap Study

Under the High Renewable Energy Scenario, the contribution of renewable energy to total electricity consumption would rise from the 2011 level of 22% to 53% by 2030 and 86% by 2050, dramatically reducing dependence on coal and other fossil fuels. Fossil fuel consumption and greenhouse gas emissions, which have risen continuously, would peak around 2025 (Figure 2).

Figure 2. Power Generation under the High Penetration Scenario


Source: Energy Foundation China, China 2050 High Renewable Energy Penetration Scenario and Roadmap Study.

At the same time, the study projects that the development and growth of green industries, including wind power, solar power, and electric vehicles, would contribute substantially to gross domestic product and sustain roughly the same level of employment currently supported by fossil-fuel energy (Figure 3). In this way, the scenario claims to simultaneously meet the three challenges of phasing out fossil fuels, stimulating economic growth, and restoring environmental health.

Figure 3. Renewable Energy as a Driver of Economic Growth


Source: Energy Foundation China, China 2050 High Renewable Energy Penetration Scenario and Roadmap Study.

The report’s vision of boosting renewable energy’s share of total electricity generation from 22% to 53% by 2030 may strike some as unrealistic, given that the Japanese government’s latest Long-Term Energy Outlook, released last June, projects no more than a 22%–24% contribution by renewable energy in 2030.[2] Yet China’s target is not substantially more ambitious than the European Union’s goal of boosting renewable energy’s share in electric power generation from 21% today to 45% by 2030.

The ERI, which drew up the High Renewable Energy Scenario, is a national research institution directly under the authority of the National Development and Reform Commission. As such, it can be considered the center of energy research in China. I traveled to Beijing in October 2015, during the fifth plenary session of the 18th Communist Party Central Committee, to sound out researchers and officials at the ERI and other energy-related agencies concerning the study’s relationship to government policy and the concrete steps China must take in order to turn it into reality.

Action Plan for a Zero-Emissions Society

To achieve the aforementioned targets, the High Renewable Energy Scenario outlines an action plan for government, industry, and society, organized under 15 headings. In addition to the development of a competitive electric power market, a component of the action plan that has drawn special attention is the conversion of China’s coal-fired power stations from base-load plants operating at maximum output into variable-load plants designed to provide backup for renewables as the latter assume a central role in the nation’s power supply.

Because wind power and other renewable energy sources rely on weather conditions, they cannot be counted on to generate a stable power supply by themselves. If the contribution of renewables is to jump to 53% by 2030 and 86% by 2050, a backup source will be essential. For this purpose, China’s base-load coal-fired plants would gradually be converted to load-following plants whose output can be adjusted to compensate for the variable output of renewable energy.

According to ERI Deputy Director General Wang Zhongying, the coal-fired plants would eventually operate no more than about 1,000 hours a year on average, down from the current average of about 5,000 hours, and the contribution of coal-fired plants to total power generation would fall from 75% in 2011 to 38% in 2030 and a mere 7% in 2050. Experts at the institute are also studying new price mechanisms, such as dynamic pricing and time-based pricing, to help compensate for the loss of income attending the drop in plant utilization and output.

Another concept that has attracted notice is that of using an anticipated boom in electric vehicles to stabilize a power grid that depends heavily on wind and solar energy. The idea is that the batteries of electric vehicles could store power when renewable energy sources produce an excess. Assuming that car ownership in Beijing rises to 10 million by 2030, if half of those vehicles are EVs equipped with 40 kWh batteries, they should be sufficient to even out short-term imbalances in supply and demand even when 53% of all electric power is produced by renewable energy.

Does Beijing Mean Business?

Given the situation in China today, it is difficult to imagine such radical changes as the conversion of coal from a base-load energy source into a backup source or the kind of widespread penetration of electric cars envisioned under the scenario. In terms of actual policy, is there any evidence that the government is prepared to pursue such a course?

Beijing has already adopted a number of key policy initiatives designed to move the nation in this direction. One is the establishment of a cap-and-trade system for carbon dioxide emissions, scheduled for launch in 2017. The trading regime will apply to the steel, chemical, construction, paper, and nonferrous metals industries, as well as the high-emissions electricity sector. Companies that exceed their cap will face penalties, and since coal is a notoriously dirty energy source, conventional coal-fired power plants will face an increasingly hostile economic climate once the new system is in place. Beijing and six other municipalities and provinces have been conducting emissions-trading pilot programs since 2013, and the trials seem to be proceeding smoothly, with some 5.3 million tons of carbon (about 230 million yuan) traded as of October 15, 2015.

The fact that the emissions-trading scheme was explicitly included in the joint statement issued by President Xi Jinping and US President Barack Obama following their White House meeting last September is another indication that Beijing is serious about weaning the power industry from fossil fuels, specifically coal. Another positive sign is the fact that none of China’s five major electric power companies have registered their opposition to the plan. Barring some major shift in course, the trend seems certain to continue. Incidentally, ERI is spearheading the effort to design a carbon market, attesting to the institute’s important role in China’s energy policy.

The government has also adopted concrete measures to promote the proliferation of electric cars, including tough auto fuel consumption standards. The Energy-Saving and New Energy Vehicle Industrialization Plan, released by the State Council in 2012, assumes a maximum average (by automaker) of 6.9 L/100km by 2015—down from 7.4 L/100 km in 2012—and 5.0 L/100km by 2020, one of the toughest standards in the world. To achieve such an average, automakers will have little choice but to include electric vehicles in their fleets. Judging by current policy, moreover, the future belongs to plug-in EVs, not hybrids; the former are eligible for government subsides for low-emissions vehicles, while the latter are not.

ERI’s Domestic and Foreign Partners

The question remains: What is the status of the scenario in relation to China’s official energy policy?

According to ERI Deputy Director General Wang Zhongying, the scenario was the result of three years of research by specialists in the field, produced with the aim of influencing the content of the government’s 13th Five-Year Plan as well as the 2030 long-term development plan. Wang emphasized that the report did not represent the views of the Chinese government. Nonetheless, its credentials are such as to guarantee considerable influence over government policy. To carry out and complete the study, ERI and Energy Foundation China collaborated with virtually all key domestic players in the energy field, including the State Grid and the Chinese Academy of Sciences, which is directly under the State Council.

More interesting, perhaps, is the report’s mention of the US Department of Energy and the government of Denmark as providers of technical support. This explicit acknowledgement of the contribution of foreign expertise is one of the study’s unique features (Figure 4). The DOE’s involvement, along with the inclusion of CO2 emissions reduction targets in the November 2014 joint statement by Obama and Xi Jinping, suggests a high level of US-China cooperation in the areas of energy and the environment, notwithstanding growing bilateral friction over China’s behavior in the South China Sea and other security concerns.

Figure 4. Partners and Technical Support


Source: Energy Foundation China, China 2050 High Renewable Energy Penetration Scenario and Roadmap Study.

Although it is too soon to predict the full impact of the High Renewable Energy Scenario on government policy, the goal of building a Beautiful China is echoed in the guidelines for the 13th Five-Year Plan adopted by the Communist Party at the fifth plenary session of the CPCC last October. The significance of the study will become clearer once the details of the plan are fleshed out and formally adopted at the National People’s Congress in March 2016. Japan’s policymakers need to keep a close eye on Beijings energy policies and work to keep abreast of global trends as it charts its own energy strategy going forward.

[1] Energy Foundation China, China 2050 High Renewable Energy Penetration Scenario and Roadmap Study, http://www.efchina.org/Reports-en/china-2050-high-renewable-energy-penetration-scenario-and-roadmap-study-en.

[2] A report published by the Environment Agency in 2014, on the other hand, maintains that Japan could achieve a renewable energy ratio of 33%–35% by 2030. See http://www.env.go.jp/earth/report/h27-01/.

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