China struggles to shake its coal addiction

China’s energy sector is booming and renewables are fast gaining ground in the world’s most populous country, thanks in part to generous government subsidies. In the first half of this year alone, the country’s renewable power capacity increased by 9.5% to the tune of 750 gigawatts in total.

Long subsidized, Beijing is now phasing out subsidies at a time when market trends make it possible that “solar and wind should be competing on their own merits and rather than be subsidized,” as noted by Mark Hutchinson, an energy consultant who is vice president of APAC power.

In the first six months of 2019, China grew its wind power capacity by 9.09 GW while it also added another 11.4 GW of solar capacity to its energy mix, according to the National Energy Administration. That should come as no surprise since China has turned into a global manufacturing hub for photovoltaic technology. The country also boasts a robust industry in wind power technology. Two of the world’s leading wind turbine manufacturers are Chinese while some 95% of turbines produced in the country are used domestically.

Nevertheless, there’s still a flip-side to the energy coin. Despite the progress in renewables deployment, China continues to depend largely on coal to power its massive manufacturing-based economy. Since 2011, the country has consumed more coal than the rest of the world combined. The fossil fuel still accounts for over 60% of the country’s energy use, much of which is needed to power its heavy industries. As a result, China’s carbon footprint, already enormous, grew by 4.7% last year alone.

Worse still, the consumption of coal is set to peak in the mid-2020s as coal-fired plans will fill the energy supply gaps caused by the intermittent nature of newly installed renewables. China’s government has embarked on a sustained campaign to reduce chronic levels of air pollution, and new coal plants are more efficient than ageing ones. “They’re building new plants that are more efficient plants than the old ones. Burning less coal,” Hutchinson observes.

Coal is still coal, however. Thus, in a bid to wean its energy sector off the highly pollutive fossil fuel Beijing is investing heavily in nuclear newbuild. Over the next five years, Beijing plans to construct 40 new nuclear power plants as part of its 13th Five Year Plan, which runs until the end of this year. The ambitious plan entails building six to eight new nuclear power plants annually in coming years. “[W]e have reason to believe that China will very likely become the largest nuclear power supplier in the next decade,” says Zhao Dongchen, executive director of ICBC International Research Limited.

Nuclear is a plentiful and reliable source of energy that can replace much of the coal currently burned to provide energy, local analysts say. Nuclear can also work well with renewables, supplementing these intermittent power sources. “We don’t want to develop more fossil fuels than we already have,” stresses Mingguang Zheng, chief designer and chief engineer at Nuclear Energy State Power Investment Company.

“So we think we can develop further solar and wind, but in any case you need base operations. Who can support the base load operation? Fossil fuels is one part. Hydro electric power can be another, but hydro’s current capacity is only 400 gigawatt. So, nuclear is the only way to go in the future for base load operations,” Zheng elaborates.

Beijing has already signed off on six new reactors that will have a combined capacity of 7 GW and will be operating in Fujian, Guangdong and Shandong provinces. Since 2015, despite delays with some of the nuclear projects, China’s state-run power companies have brought more than 15 nuclear reactors online.

“The country has also made significant progress in promoting its first domestically developed reactor: the Hualong One, based on American and French technology,” explains Nikkei Asian Review. “The Hualong One features a double-layered containment shell for added safety. Nearly 90% of its parts are produced in China, which is believed to have cut total costs by at least half compared with Western-developed reactors.”

Long and frigid winters in China’s northern regions have long necessitated the ample burning of coal for heating, but nuclear energy is being discussed as a viable alternative, Zheng says. “In China, we need heating in the northern areas. This year, we spent about 300 mega tons of coal and in winter that greatly affects the climate and also affects air quality. We think in the future, nuclear for the northern parts is possible.”

The need for this is particularly important given the expected growth in demand in these regions, which only puts more pressure on the government to provide carbon energy. “Nuclear energy provides a practical solution to balancing energy security and decarbonization. In China, by 2020, its domestic electricity demand is expected to grow 2.5% and residential demand in less developed regions is projected to grow by 7.5%,” projects Dr Wenyuan Wu, an expert on Chinese governance and energy reform.

China’s increasingly sophisticated energy market, facilitated by homegrown technology, means that the country’s prospects of phasing out coal in coming decades are looking more and more plausible. A boost in renewables and nuclear energy could help do the trick.