Much has been lamented about China’s constant increase in coal capacities to ensure its energy security in recent years. At the same time, headlines proclaiming China’s world market leadership in wind and solar energy equally abound.
Indeed, looking at the numbers, both are true. While coal capacities have increased over the past ten years, the overall share of coal in thermal energy production has steadily dropped. Over the same period, installed capacity for renewables has increased. In recent years, this trend has actually accelerated: in 2021, the share of renewables in overall power generation reached 23.4%, and by the end of 2023, this portion had increased to more than 50%.
By the end of 2023, the installed power generation capacity was nearly 2.920 GW, up by 13.9 percent over that at the end of 2022. Installed thermal power generation capacity was around 1.390 GW, up by 4.1%, while installed renewable capacity reached more than 1.450 GW. While all capacities increased, the most notable growth was posted with installed grid-connected wind power generation capacity of 441,34 GW, up by 20.7 %, and installed grid-connected solar power capacity of 609,49 GW, up by 55.2 %. Nuclear and hydropower capacities increased, albeit in the single-digit range.
In the most recent statement by the National Energy Agency for the first half of 2024, China’s cumulative installed power generation capacity increased by about 14% to 3.070 GW. Again, installed capacities for solar and wind power generation grew fastest, with solar power capacities of 710 GW, up 51.6% year-on-year, and wind power to 470 GW, up 19.9% year-on-year. As of 2023, hydropower and nuclear capacities are growing in the low single-digit range. This contrasts with a total of 1.405 GW of thermal or mainly coal-based electricity production, up 3.6%. For the first half year of 2024, the share of coal in power generation was, therefore, around 46%.
The trend is also reflected in energy consumption: From 2012 to 2021, the proportion of coal in total energy consumption decreased from 68.5% to 54%, and the proportion of non-fossil energy increased from 9.7% to 16.7%.
The ascent of renewable energy forms in China harks back to the beginning of the 2000s second decade when images of Chinese cities clogged in haze, smog, and sand storms went around world media. High 2.5.pm levels started to cause serious health problems, and public dissent about the abysmal air quality became vocal. Thus, The government initiated a string of policies to encourage electrification of the public transport system and private mobility as well as energy efficiency measures in the manufacturing and construction sectors. Cleaning up air pollution had set in motion policies to reduce polluting sources. At the same time, industrial production remained the backbone of China’s economic success story and was crucial to generating wealth. It could, therefore, not be simply closed down but had to be transformed. Making industrial processes energy efficient came into focus. Since not all industry processes can be electrified, China has consistently issued regulations to improve energy efficiency.
New energy production forms have also opened avenues for economic growth to poorer areas that formerly relied heavily on coal, like Inner Mongolia, or were resource-depleted and remote, like Qinghai. Significant wind and gigantic solar installation parks were coupled with distributed individual solar panels for households. Industrial parks were designed as pilot zones to test and trial energy efficiency technology. One such park addressing energy security and ecological solutions is the advanced solar project of the Ordos Net-Zero Industrial Park in Inner Mongolia. The park combines large solar energy arrays with smart production, electrified processes, etc. It’s the largest such project in China and now hosts the largest battery factory in the region.
Challenges remain in the context of power distribution and grid stability. Distributed energy and a centralized power grid are key pillars of China’s energy strategy. However, the challenge is to ensure sufficient investment in upgrading the electricity networks and using a mix of generation technologies that ensure the stability of the grid load.
At the same time, any transition away from coal as a key energy source will also need better and more structured efforts to support coal miners and coal industry workers directly, not just coal enterprises and businesses. Efforts must be made to enable retraining and upskilling or long-term compensation schemes for the early retirement of workers released from coal mines and coal-related production.
Finally, efforts need to be redoubled regarding energy efficiency and the transformation of China’s growth model. China’s energy consumption continues to rise and is still running ahead of 1.5-degree scenarios. Transforming the energy-hungry industry and individual consumption patterns remains a huge task for China’s government.
This Post was submitted by Climate Scorecard Country Manager Annette Wiedenbach
Contact: awiedenbach@gmx.de
Learn More Resources:
https://www.stats.gov.cn/english/PressRelease/202402/t20240228_1947918.html
https://www.nea.gov.cn/2024-07/20/c_1310782235.htm
https://asianews.network/landmark-net-zero-industrial-park-taking-shape/