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Shifting to Neutral

China seeks to clarify its roadmap to carbon neutrality amid record-setting temperatures and renewed international efforts to transition away from fossil fuels

By Zhou You Updated Apr.1

Workers inspect a wind turbine at Hongze Lake, Suqian, Jiangsu Province, June 3, 2018 (Photo by VCG)

An aerial view of the 500,000-kW photovoltaic power generation and storage project built on salinized land in Dongying, Shandong Province. The project went online in December 29, 2023 (Photo by VCG)

An aerial view of a 10-MW carbon dioxide energy storage facility in operation in Wuhu, Anhui Province, January 9, 2024 (Photo by VCG)

About nine billion passenger trips will be made from January 26 to March 5, a record high for the annual Spring Festival travel rush, according to estimates from China’s Ministry of Transport. Lasting 40 days, this floating period of holiday travel is recognized as the world’s largest annual human migration.  

Of these trips this year, about 7.2 billion are made by private cars. However, so far road travel has been far from smooth. Rounds of heavy snow and rainfall hit 11 of the country’s central and eastern provinces during the weeks surrounding Chinese New Year (February 10-17) with a severity not seen in these regions since 2009. Many drivers found themselves stranded for hours as expressways were shut down due to icy conditions.  

The roads were not the only challenges faced during the holiday season. Young people returning from major cities chose to stay in hotels instead of their family homes, as many homes still lack adequate heating – especially in China’s southern regions. The trend ignited online debate, questioning a perceived disrespect toward relatives and a diminishing emphasis on the traditional family reunion associated with the holiday.  

In addition, summer temperatures in some areas were unseasonably high, further reflecting the effects of climate change. In 2023, there were 4.4 more days of temperatures above 35 C than compared to the annual average, marking the second-highest record since 1961, according to the China Meteorological Administration.  

All this posed significant challenges to the country’s energy supply. On December 17, 2023, electricity consumption hit a new peak for the annual heating season, which typically runs from October to March the following year, Li Chao, spokesperson of the National Development and Reform Commission, told the People’s Daily overseas edition in early January. In the same report, the National Energy Agency highlighted the potential energy supply strain faced by certain provinces during the winter months. In the summer of 2023, some regions suffered power shortages due to extreme heat and drought conditions.  

China is increasingly relying on clean and renewable energy to meet its energy demands. In 2023, both natural gas production and imports saw an uptick. In North China, geothermal heating systems have been developed to provide warmth to households in winter. The widespread adoption of such energy solutions is crucial for China to reduce carbon emissions and address the challenges posed by climate change.  

Record Temperatures 
At a news conference held on January 19, Zhou Bing, chief expert at the National Climate Center (NCC), warned that as heat waves, floods and extreme precipitation events become more frequent and intense, China’s climate may “deviate from traditional patterns,” making climate risks more difficult to predict.  

Jia Xiaolong, deputy director of the NCC, said at the same conference that human activity is the primary cause of the recent increase in greenhouse gas concentrations in the atmosphere that have been driving global climate change. “There is a pressing need to prioritize climate security, slow global warming and enhance meteorological disaster prevention and mitigation capabilities,” he said.  

The NCC’s findings echo those of the World Meteorological Organization (WMO). The WMO’s provisional State of the Global Climate report released in November 2023 said that 2023 was set to be the warmest year on record, with data until the end of October showing that the year was about 1.4 C above the pre-industrial 1850-1900 baseline.  

The report was released ahead of the 2023 United Nations Climate Change Conference (COP28) held from November 30-December 13, 2023 in Dubai, United Arab Emirates. In a video message accompanying the WMO’s report, UN Secretary-General António Guterres urged world leaders to take action to avoid the worst of climate change by committing to the roadmap to limit the rise in global temperature to 1.5 C above the preindustrial period.  

Countries at COP28 eventually agreed on the UAE Consensus which included the line “transitioning away from fossil fuels,” a first for a UN climate conference, though it fell short of a long-demanded call for a “phaseout” of oil, coal and gas. The approved roadmap also includes commitments to triple renewable capacity and double energy efficiency by 2030 and make progress in adaptation and finance.  

According to Zeng Ming, director of the Energy and Environment Research Center at Beijing’s North China Electric Power University and head of the Energy Internet Special Committee of the China Energy Research Society, compared to the periods following the Paris Agreement in 2015 at COP21, most countries are poised to adopt a more cautious approach toward new energy development and carbon reduction goals.  

“Countries need time to explore new forms and models of new energy to achieve a steady and gradual transition,” Zeng told NewsChina. Zeng’s view mirrors that of Zou Ji, CEO and president of Energy Foundation China, a US-registered NGO focusing on China’s sustainable energy development. Zou told NewsChina that a common challenge for countries to achieve their goals in carbon reduction is how to prevent their energy transition from resulting in a hard landing. “It is a nuanced process with varying timelines for different countries,” Zou told NewsChina.  

Technological Advances 
China announced in September 2020 that it will aim to peak CO2 emissions before 2030 and achieve carbon neutrality by 2060. Zou said the specific timetable for China achieving its decarbonization objectives is contingent upon three fundamental factors: the life cycles of existing fossil energy assets, technological advances in alternative energy sources and the economic cycle of China’s overall economy.  

According to Zhou Bing with the NCC, coal-fueled power plants are China’s most significant fossil energy assets. Averaging 14 years in age with an expected lifespan of 30 years, most of these assets are expected to be decommissioned over the next two decades.  

However, this results in what is termed carbon lock-in, where fixed assets continue to be used. At the same time, China has made notable technological advances in both new energy generation and energy storage.  

In the past decade, the cost of PV power generation has reduced by 90 percent, and the cost of energy storage technology declined significantly over the last five years. According to a report by UK-based energy consultancy firm Wood Mackenzie, China’s solar production costs fell by 42 percent in 2023 alone.  

China is making substantial strides in wind energy. Surpassing 300 GW, the country now hosts the world’s largest installed wind power capacity. China is also home to some of the world’s largest battery manufacturers, which not only help drive the electric car industry but also have significant implications for stationary energy storage, which is essential for integrating renewable energy into the grid.  

Regarding the economic cycle, Zou said that China has adopted loose macroeconomic fiscal and monetary policies in recent years that advantageously position itself for a fresh wave of high investment in new energy. This sustainable economic development strategy is expected to span 5-10 years or potentially even longer.  

China’s ffrst hydrogen-powered vessel, Sanxia Qingzhou 1 ( Three Gorges Hydrogen Boat No. 1), a river sightseeing vessel, completes its maiden voyage in Yichang, Hubei Province, October 11, 2023 (Photo by VCG)

A thermometer in an apartment with a geothermal heating system in Puyang, Henan Province shows the room temperature is 23 C, January 24, 2023 (Photo by VCG)

Energy Trilemma
Despite these favorable factors and progress, the foremost challenge for countries to achieve decarbonization is to unlock what energy experts call the “energy trilemma.” The term refers to the difficulties in obtaining cheap, stable and clean energy simultaneously, given the innate unstable nature of sustainable power sources, particularly solar and wind.  

“It is relatively easy to install solar and wind power plants,” Zou Ji said, “The difficulty lies in how to utilize their power capability.” Although China has accelerated solar and wind power installation in recent years, the utility ratio has been relatively low.  

According to data released by the National Energy Administration, while installed solar and wind power capacity in the first three quarters of 2023 accounted for 33 percent of China’s total power capacity, solar and wind accounted for only about 16 percent of its total electrical generation, meaning that only about half of the country’s solar and wind power capacity is effectively utilized.  

By comparison, data released by US energy authorities showed that over the same period, solar and wind accounted for 18.6 percent of the country’s power capacity and 15.5 percent of total electricity generation, indicating a much higher utilization ratio of 83 percent.  

According to energy experts, the US achieves these higher rates by utilizing natural gas to mitigate the intermittent gaps in solar and wind capacity. Though a fossil fuel, natural gas power can be quickly brought online or taken offline, unlike coal power, which China heavily relies on. 

“Gas power plants can respond more quickly to fluctuations of power generation [than coal], making them a safer and more environmentally friendly backup option,” said Sun Rongfeng, a research fellow from the Energy Research Institute of the Shandong Academy of Sciences.  

Additionally, the US benefits from a more market-oriented energy pricing mechanism. In 2022, natural gas accounted for 39.9 percent of electricity generation in the US. The energy landscape differs greatly in China, where in 2022 natural gas accounted for only 3.3 percent. Coal dominated power generation at 58.4 percent.  

Experts argue that a more competitive energy pricing mechanism incentivizes greater use of renewables. For example, electricity in the US is generally more expensive during peak load times. Such time-based pricing mechanisms factored heavily into the rapid growth of residential and commercial PV power.  

Zou Ji pointed out a pricing hurdle for China: While fierce competition in technology and manufacturing have driven down new energy prices on the supply side, energy prices remain relatively fixed on the demand side. China’s power grid system is monopolized by just a few centralized State-owned grid companies.  

Sun explained that while rooftop solar is popular in rural areas, China’s grids often cannot cope with the intrinsic instability of these installations. This means households can only utilize about 30 percent of the electricity they generate. The remaining 70 percent is effectively wasted.  

Sun added that China needs to seek a market-based solution to improve new energy’s access to the grid, as the generation cost of renewable energy has become lower than that of thermal power.  

Energy Storage 
For other experts, given the constant fluctuation and unstable nature of renewable energy, low cost alone will not significantly enhance its attractiveness to the grid. In Germany, for example, the government has adopted laws that specify renewable electricity as a priority. Together with feed-in tariffs, renewable electricity accounted for 51.6 percent of the country’s total electricity in 2023, one of the highest in the world.  

For most energy experts, power storage is the solution. “In future power systems, energy storage units will play a pivotal role as an energy sponge, providing support in key stages including generation, transmission, distribution and consumption,” said Chen Chao, marketing director of Kechua Tech, a new energy solution provider based in Xiamen, Fujian Province.  

Chen explained there are two types of energy storage solutions being implemented. The first is source-side storage, which focuses on integrating storage systems into solar and wind farms. The other is grid-side storage, which connects directly to the grid.  

In 2022, China’s National Energy Administration released its 14th Five-Year Plan (2021-2025) for renewable energy development, which proposes to transition energy storage from the research and development stage to large-scale marketization.  

Chen explained that energy storage in China is currently in the demonstration stage, in which enterprises are actively exploring potential business models that take a market-oriented, bottom-up approach.  

According to Zou Ji, increasing reliance on sustainable energy sources will lead countries around the globe into “uncharted waters” due to the challenges posed by supply fluctuations. Germany, for example, relies on cross-border power connections to balance fluctuations. 
Zou said that effective and fair energy transition requires a combination of top-down and bottom-up approaches, both within a country and in international cooperation.  

A major energy transition challenge both China and the world face is that key components of the industrial chain, such as PV equipment, batteries and electric vehicles, are increasingly subject to geopolitical competition between major powers, as the US and the EU have either imposed or threatened to impose high tariffs on Chinese products.  

Zou warned it indicates a disconnection between the need to achieve climate goals at the global level and policy priorities at the country level. “Eventually, everybody will realize that no country can achieve decarbonization on its own,” Zou said.