For the past 2 decades, China has been the world’s biggest greenhouse gas emitter as they used coal as the rest of the world combined. Despite that, China has become the world leader in renewables. How?
Interesting Facts: The electricity generated by wind and solar in China is around 37% of the total global output from these technologies. Or more than the entire power demand of Japan, or around 75% of annual electricity consumption in India.
China: the World Leader in Renewables
Renewables account for half of China’s installed capacity, but the beginning of 2023 marked a surge and sanction of new coal-powered power plants. Presently, China generates 70% of its electricity from fossil fuels because the installed capacity cannot fulfil the energy demand.
China is leading the world in terms of the speed at which it brings operational ultra-supercritical thermal power plants. Through this, the use of solid fuel was made possible in the most cost-effective way.
Coal-Powered TPPs in China
Coal was the key source of electricity in China as it provided 61% of power output in 2022, along with fuel-oil-fired up to 4.1%, and low-carbon sources at 34.9%, according to Ember.
Among the operating coal-powered TPPs in China, the share of ultra-supercritical TPPs reached around 32% in 2024. This is an all-time high in the history of statistical observation. According to the Global Energy Monitor, the figure was 93% for coal-powered TPPs. Efficiency (converting thermal power into electricity):
- Ultra-supercritical coal-powered TPPs – between 44% to 46%
- Supercritical TPPs – from 37% to 40%
- Subcritical TPPs – 33% to 37%
The higher the efficiency, the lesser the requirement for coal, leading to lower GHG emissions.
Online TPPs
Ahead of other countries, China brings ultra-supercritical TPPs online. According to Global Energy Monitor, the share of ultra-supercritical TPPs worldwide excluding China by early 2024 was only 10%. The segment covering facilities under construction was around 19%, excluding China.
China’s share in the global capacity of existing coal-powered power plants is 53% (i.e. 1,136.7 GW out of 2,130.1 GW). The under-construction plants account for 71% (i.e. 139.8 GW out of 197.3 GW).
Highlights
- In 2022, China had roughly the same solar capacity as the rest of the world combined.
- In 2023, China doubled the additional solar.
- Now, fossil fuels make up less than the total installed generation capacity in China. A decade ago, 2/3 of the total power capacity of China was based on fossil fuels.
- In 2022, China quadrupled the additions of energy storage and increased new wind capacity by 66%.
- By the end of 2022, almost 676 counties signed for the NEA scheme and more than 51 gigawatts of newly distributed solar PV were installed.
- By the end of 2022, China built roughly 157 gigawatts of distributed PV capacity, which is more than double in comparison to the U.S.
- In 2023, the clean energy sector became the biggest contributor to economic growth in China.
- The total electricity generated by solar and wind in a year is around 1,470 terawatt-hours.
- In 2023, China’s electricity mix comprised 30.7% which includes all renewables, including hydro. This ratio was 20.1%, a decade ago.
- In its upcoming thermal projects, China has over 80GW pipeline capacity.
- Their solar PV manufacturing techniques reduced local module prices by 50% from January to December 2023.
- In 2023, the clean energy sector became the biggest contributor to economic growth in China.
- Under current market conditions and existing policies, it is expected that its renewable capacity will reach 7,300 GW by 2028.
- Not just generation, but China is expected to maintain an 80% to 95% share of global supply chains of PV exports.
- According to the International Energy Authority assessment, China drove a 50% increase in the total global renewable installation in 2023.
- According to IEA’s forecast, China’s half of electricity generation will be from renewable energy sources by 2028.
- Its 2030 target of 1,200 GW of renewable energy is expected to be achieved, 5 years earlier.
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China: The Biggest Emitter
Mid-2000s decades-long phase of GDP rapid growth was coming to an end with investment decisions made. With increasing labor costs and dependence on coal, this leads to crisis like air, water, and soil pollution.
China’s emissions in the 1st decade of this century doubled and by 2006, it overtook the U.S. and became the world’s largest GHG emitter.
China Became the Global Supplier of Renewable Technologies
In the next decade, China largely achieved its goal of becoming the lead producer of solar and wind technologies. Developed a near monopoly on every supply chain, including rare earth and strategic minerals required for clean energy revolution. Now, China has more than 80% of the solar manufacturing capacity of the world.
Impact of China’s Renewable Sector
The extraordinary scale of China’s output causes a reduction in prices worldwide. It became the key factor of reducing cost barriers to switch to renewable systems for poorer countries. China holds essential positions in battery and wind technologies. BYD, a Chinese company, became the biggest EV manufacturer in the world.
China Started Setting New Targets for Cleaner Future
With good growth in installed renewable capacity in the last 2 decades, China is outpacing the rest of the world in this field. However, to completely end the dependence on fossil fuel plans are needed for reforming its national electric system.
In November 2023, Xie Zhenhua, Chinese climate envoy and John Kerry, U.S. climate envoy signed a pledge to triple renewable global energy by 2030. In today’s world, when nations are missing their climate targets, China’s installed renewable capacity and scale of expansion are unmatched.
- In 2020, China pledged to reach 1,200 gigawatts of renewable capacity by 2030, to cross that time double capacity.
- At their present pace, China will meet its target by 2025 and could boast as much as 1000 gigawatts of solar power by the end of 2026.
- This would contribute to 11,000 gigawatts of installed renewable capacity needed by the world to meet the 2030 targets of the Paris Agreement.
China Aims to Achieve Carbon Neutrality by 2060
At the 2020 U.N. General Assembly, President Xi Jinping’s surprise announcement stirred the conversation as China aims to achieve carbon neutrality by 2060.
This announcement sent a power signal in favor of renewable investments across China. The state-owned enterprises, including traditional energy companies, were required to pay attention towards the President’s message and the policies initiated.
Soon after that, the regulator of the national energy sector, the National Energy Administration (NEA), recognized new policies and mechanisms to implement President Xi’s targets.
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Commitments in the Paris Agreement 2021
In the list of commitments submitted, Beijing pledged the following:
- To strictly limit the coal growth
- To control new coal power plants
- Achieve carbon intensity by 2025
- To increase the share of non-fossil fuel energy sources to 20% by 2025 and to 25% by 2030.
- Between 2020 and 2025, it will ensure that 50% of increasing energy growth is produced from renewables.
Steps Taken by China
It became the main topic in Beijing’s top-level policy discussions. China was looking for investments to advance its technologies and this coincided with cleaning the environment to cut emissions.
For the next and every 5-year plan, China made strategic investments in all renewable technologies, including solar and wind capacity, geothermal projects, and green hydrogen, along with research and investment in battery storage and supply chains.
From 2021 to 2025, China’s budget for grid investments is finalized at US$455, which is 60% higher than the previous decade. It includes long-distance transmission lines (1,000 km) that unlocked more than 100GW of renewables development in inland China.
According to an analysis, China invested $546 billion in 2022 in solar, wind, electric vehicles, and batteries.
New policies include higher peak pricing and target confirmation for 50-80 GW of Demand Side Management or virtual power plant by 2025. China’s low-carbon manufacturing accounted for more than 90% of the $79 billion investment.
Utility-Scale Bases
China took advantage of both large amounts of affordable available land and high solar radiation in the desert. This approach speeded up their journey in becoming the global leader in renewable energy technologies.
A series of utility-scale clean energy bases including massive state-owned companies were planned for empty western desert regions. These bases are a combination of vast wind farms and solar arrays to connect to eastern China markets through high-speed transmission lines.
The country aims to build more than 200 such bases. This will raise its renewable capacity to 3.9 terawatts by 2030. It is 3 times more than its 2022 total. In 2021, NEA promised to improve rural grid transmission. It also encouraged investments from village collectives in distributed renewable power and to share the benefits.
Whole County PV Program
To promote rooftop solar adoption, NEA launched the Whole County PV program. It is a national pilot scheme aimed at installing photovoltaics in around half of China’s county-level rural administration (a quarter of China’s population). This program provided solar to 20% of residential properties with separate commercial building targets.
- In 2022 itself, this program yielded 55 GW of rooftop solar installations.
- China’s traditional central planners and grid operators are implementing a rural model for utility-scale developments. It enables customers to buy and sell energy to the grid.
- By the end of 2022, almost 676 counties signed for the NEA scheme and more than 51 gigawatts of newly distributed solar PV were installed.
- By the end of 2022, China built roughly 157 gigawatts of distributed PV capacity, which is more than double in comparison to the U.S.
NEA’s Announcements
The NEA made announcements of plans to expand financing channels for renewables and to improve incentives and market mechanisms. This will aim to stop state-owned banks from favoring state-owned enterprises and prohibit them from undervaluing both the private sector and new policy initiatives.
Merging the Regional Grids
The government has plans to create a unified electric system by merging regional grids into one national market. China’s giant grid prefers high-speed transmission from reliable sources to integrate variable renewable power.
This way it aims to match the intermittent supply to the demand. Chinese grid companies considered coal-powered plants as steady and predictable, allowing them more hours of grid access than renewables.
Grabbing the Last Opportunity for Coal Plants
According to an analysis by Carbon Brief, a coal rush is underway as operators are seizing the opportunity for new coal plants. This, according to the operators, is the last opportunity to get a permit for coal power plants.
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Affordable Renewable Technologies in China
Power prices in China for end-users are less than half in comparison to Europe and Australia. This phenomenon has helped China in becoming a world leader in renewables. Prices of renewables are falling in China due to the following factors:
- Low energy costs
- Falling interest rates
- Intense price competition between domestic suppliers
- Government support for research, development, and manufacturing
Carbon Intensity 2025: Too Far to Reach
With a rise in new coal power approvals between 2022 and 2023, there has been a 12% rise in emissions in the energy sector recorded from 2020 to 2023. To achieve their carbon intensity 2025 targets, there needs to be a decline in emissions by 4% to 6% by 2025.
According to some analysts, it is hardly possible to achieve this target. But if China stays on track with the long and short-term goals, the government keeps control over new coal capacity, and rapidly builds renewables, there is hope that these targets can be met.
Estimated Future of China’s Renewable Energy Industry
There has been a recovery in hydro output and an increase in solar and wind installation. According to the Centre for Research on Energy and Clean Air’s analysis, China’s carbon dioxide emissions will start falling in 2024.
According to a report, solar and wind industry in China will surpass coal in electricity production in 2024.
As per the IEA report, in 2023, China commissioned as much solar capacity as the entire world did in 2022. Also, it installed 66% more new wind turbines in 2022 and 2023.
Between 2024 and 2026, China is likely to lead electricity generation and emission reductions that will be roughly half of the global reductions.
Source: How China Became the World’s Leader on Renewable Energy
So, with constant efforts, China becomes the world leader in renewables. And if China is steadfast in the decisions it makes, the country will soon achieve its clean energy targets. There are certain steps taken by China, that if followed by other nations, could help improve their renewable energy sector growth as well.