When earlier this year China announced subsidies for 22.79
GW of new solar power capacity, those following the country’s renewable
energy story must have started to worry. The capacity subsidized is half the
amount approved in 2017, at 53 GW. And chances are that solar and wind
additions will continue to fall.
Subsidies are one reason. In January, Beijing said
it will only approve solar power projects if they are cost-competitive with
coal. Judging by the size of subsidies announced in July, more than 22 GW in
projects can boast cost-competitiveness with coal.
Yet there is another reason: curtailment. China-based journalist Michael
Standaert wrote in a recent story
for Yale Environment 360 that China’s solar and wind farms continue to
produce electricity that is wasted because there is not enough transmission
capacity.
Renewable energy is a top priority for China as it fights one of the worst
air pollution levels in the world while subject to an uncomfortably high
degree of reliance on energy imports, namely oil and gas. At the same time,
it is one of the biggest—if not the single biggest—driver of global energy
demand as its middle class grows fast and with it, energy demand. Now, it
seems, energy demand is taking the upper hand.
China has substantially increased subsidies for shale gas exploration and
methane separation from coal, Standaert writes. He also quotes a former IEA
official as saying, “Though China is the largest clean energy market in the
world, wind and solar only accounted for 5.2 percent and 2.5 percent of
China’s national power generation in 2018.”
What’s more, Kevin Tu, now a fellow at the Center on Global Energy Policy
at Columbia University, tells Standaert that “Against the backdrop of an
ongoing U.S.-China trade war and a slowing Chinese economy, political
priority of climate change in China is unlikely to become very high in the
near future, indicating great difficulties for Beijing to further upgrade its
climate ambitions.” Related:
The Doodle Frenzy Is Earning Unethical Breeders Top Dollar
In short, renewables won’t cut it when you need cheap power to feed
growing energy demand. By the way, China is not alone in this situation.
Energy demand is rising on a global scale and this means emissions are rising,
too.
In its latest International
Energy Outlook, the U.S. Energy Information Administration poured cold
water on the hopes of many climate change fighters by estimating global
energy demand will increase by as much as 50 percent between 2018 and 2050.
That’s under the EIA’s reference case scenario, that is, the middle ground
between the scenario of high economic growth, under which energy demand
growth will be even greater and the scenario of low economic growth, which
could give the planet a breather.
Unsurprisingly, Asia will be the biggest driver of this growing demand and
China specifically as its economy continues to expand at rates higher than
the mature economies of the OECD. As it expands, Beijing—as other governments
around the world—would need to juggle between satisfying this growing energy
demand and cutting emissions.
It seems like an impossible task. To do it, China would need to solve the
curtailment problem and make solar and wind even cheaper, and not just for
households but for the industrial sector: it is this sector that will account
for most of energy demand growth to 2050.
By Irina Slav for Oilprice.com
