China will plow 2.5 trillion yuan ($361 billion) into renewable power generation by 2020, the country's energy agency said Thursday, as the world's largest energy market continues to shift away from dirty coal power towards cleaner fuels.
The investment will create over 13 million jobs in the sector, the National Energy Administration (NEA) said in a blueprint document that lays out its plan to develop the nation's energy sector during the five-year 2016 to 2020 period.
The announcement comes only days after Beijing, the Chinese capital, and other cities in China's industrial north-east were again engulfed in hazardous smog, caused largely by coal-fired power generation.
The NEA said installed renewable power capacity including wind, hydro, solar and nuclear power will account for about half of new electricity generation by 2020.
The agency did not disclose more details on where the funds, which equate to about $72 billion each year, would be spent.
Still, the investment reflects Beijing's continued focus on curbing the use of fossil fuels, which have driven China's economic growth over the past two decades, as it ramps up a war on pollution.
Last month, the National Development and Reform Commission (NDRC), the country's economic planner, said in its own five-year plan that the country will aim to boost solar capacity by five times, at a cost of 1 trillion yuan. That's equivalent to about 1,000 major solar power plants, according to experts' estimates.
Such ambitions have become more realistic as the cost of building large-scale solar plants has dropped by as much as 40 percent since 2010. China became the world's top solar generator last year. The government may even exceed its targets because there are more investment opportunities in the sector as costs go down, said Steven Han, renewable analyst with securities firm Shenyin Wanguo.
Some 700 billion yuan will go towards wind farms, 500 billion to hydro power with tidal and geothermal getting the rest, the NDRC said.
According to the NEA, this will bring the total number of people employed in the renewable energy sector to 13 million by 2020.
Illustrating the enormity of the challenge, the NEA repeated on Thursday that renewables will still only account for just 15 percent of overall energy consumption by 2020. More than half of the nation's installed power capacity will still be fueled by coal at the end of the same period.
|© VCG-Getty Images Solar panels installed above Susong Village of Lizhong in the Jiangsu Province of China.|
China Aims to Spend at Least $360 Billion on Renewable Energy by 2020
China intends to spend more than $360 billion through 2020 on renewable power sources like solar and wind, the government’s energy agency said on Thursday.
The country’s National Energy Administration laid out a plan to dominate one of the world’s fastest-growing industries, just at a time when the United States is set to take the opposite tack as Donald J. Trump, a climate-change doubter, prepares to assume the presidency.
The agency said in a statement that China would create more than 13 million jobs in the renewable energy sector by 2020, curb the growth of greenhouse gasses that contribute to global warming and reduce the amount of soot that in recent days has blanketed Beijing and other Chinese cities in a noxious cloud of smog.
China surpassed the United States a decade ago as the world’s biggest emitter of greenhouse gasses, and now discharges about twice as much. For years, its oil and coal industries prospered under powerful political patrons and the growth-above-anything mantra of the ruling Communist Party.
The result was choking pollution and the growing recognition that China, many of whose biggest cities are on the coast, will be threatened by rising sea levels.
But even disregarding the threat of climate change, China’s announcement was a bold claim on leadership in the renewable energy industry, where Chinese companies, buoyed by a huge domestic market, are already among the world’s dominant players. Thanks in part to Chinese manufacturing, costs in the wind and solar industries are plummeting, making them increasingly competitive with power generation from fossil fuels like coal and natural gas.
Sam Geall, executive editor of Chinadialogue, an English- and Chinese-language website that focuses on the environment, said that the United States, by moving away from a focus on reducing carbon emissions, risked losing out to China in the race to lead the industry.
Mr. Trump has in the past called the theory of human-cased global warming a hoax and picked a fierce opponent of President Obama’s rules to reduce carbon emissions, Scott Pruitt, the Oklahoma attorney general, to lead the Environmental Protection Agency.
The investment commitment made by the Chinese, combined with Mr. Trump’s moves, means jobs that would have been created in the United States may instead go to Chinese workers.
Even the headline-grabbing numbers on total investment and job creation may understate what is already happening on the ground in China. Greenpeace estimates that China installed an average of more than one wind turbine every hour of every day in 2015, and covered the equivalent of one soccer field every hour with solar panels.
China may meet its 2020 goals for solar installation by 2018, said Lauri Myllyvirta, a research analyst at Greenpeace, who is based in Beijing.
But despite these impressive numbers, China’s push to clean its air and reduce its greenhouse gasses faces political pressure from the politically powerful coal industry.
Mr. Geall and Mr. Myllyvirta both said that Thursday’s announcement was missing any language on curtailment, or the amount of electricity generated by wind and solar that never finds its way to the country’s power grid. In China, wind power curtailment was 19 percent in the first nine months 2016, Mr. Myllyvirta said, many times higher than in the United States, where curtailment levels are often negligible.
The main reason for curtailment, he said, is that China is plagued by overcapacity in electricity generation and operators of China’s grid often favor electricity generated from coal.
In recent years the country has also been building coal-fired power plants at a furious pace, although that has recently slowed along with China’s economy. Another omission from Thursday’s announcements, Mr. Myllyvirta said, was the absence of any specific target to reduce coal consumption.
But both Mr. Geall and Mr. Myllyvirta said Thursday’s announcement set the stage for still more power generation from renewable energy and a gradual shift away from coal.
“My experience with China is when a numeric target gets written down, it gets implemented,” Mr. Myllyvirta said. “It doesn’t always get implemented in the way you like, but it does get implemented.”
China is about to kick America's butt in renewable energy
China says it will drastically boost its spending on renewable energy over the next four years. The United States, meanwhile, may head down a different path under Trump.
China's energy agency said Thursday it would plow 2.5 trillion yuan, or $361 billion, into clean electricity projects by 2020 as part of a broader effort to shift the nation away from fossil fuels.
Although coal-fired power plants have helped drive China's manufacturing growth in the past decade, the facilities have also created a slew of public health crises, such as dangerous smog in northern China and toxic water pollution.
The country in recent years has started shuttering coal plants near Beijing and scrapped plans for new ones, all the while investing more in alternative sources.
Image: Lu gang - Imaginechina via ap images
China invested about $103 billion in renewable energy in 2015, about 36 percent of the world's total spending, according to annual global estimates.
By 2020, about half of China's new electricity generation will come from installed solar, wind, hydro and nuclear power projects, the National Energy Administration (NEA) said in its five-year blueprint for the nation's energy sector.
The investment will create more than 13 million jobs in the sector, the NEA said Thursday.
The nation already boasts about 3.5 million jobs in renewable energy, including many at the world's largest solar panel manufacturing facilities, the International Energy Agency found in its 2016 World Energy Outlook.
The United States, by contrast, has about 769,000 jobs dependent on renewables, the agency estimated.
America has similarly experienced rapid growth in renewable energy installations and investment during the Obama administration.
The U.S. public and private sectors together committed $44.1 billion to the sector in 2015 — the highest since 2011 — making America the world's second-largest clean energy investor after China.
Energy analysts say they expect the U.S. will keep building new wind and solar projects under President-elect Donald Trump, largely because the costs of renewables have plummeted in recent years.
Solar power, for instance, is now cheaper than coal in some parts of the world, according to Bloomberg New Energy Finance. In less than a decade, solar may become the lowest-cost option on the planet.
But overall investments in lower-emissions technologies may falter, given Trump's pledge to accelerate U.S. fossil fuel production and his rejection of the mainstream science on climate change.
In December, the Trump transition team suggested it was eyeing large-scale budget cuts at the U.S. Department of Energy, one of the most important supporters of clean technologies in the U.S. and globally.
In an usual questionnaire, which it later disavowed, Trump's team asked how the agency would handle an across-the-board budget cut of 10 percent.
Trump's cabinet picks are also climate-change deniers, and his nominee for the U.S. Environmental Protection Agency is actively fighting to gut the Clean Power Plan, the agency's key policy for reducing power plant emissions.
While Trump may not attack renewable energy itself, his administration's support for fossil fuels may undermine efforts to steer the country away from carbon-intensive coal and natural gas, UtilityDive reported.
"I think it's more likely [Trump]'s going to relax the regulation of natural gas and coal, and that would make it essentially less economic for solar and wind," Brian Potts, a partner at the law firm Perkins Coie, recently told the publication.
If the U.S. backslides on clean energy progress, China and other developing economies like India will likely pick up the slack, in terms of investment and jobs, analysts told Mashable.
But that doesn't mean China's electric grid will suddenly be clean, or that the U.S. will be the only nation that still relies mainly on coal and natural gas for electricity.
China's NEA said it expects renewables will only account for about 15 percent of the nation's overall energy consumption by 2020.
In the next few years, more than half of China's installed power capacity will still be fueled by coal, the agency said.