Page 358 - 2021 White Paper
P. 358
1 White Paper on the Business Environment in China
habit will be particularly hard. China had previously China will continue to support renewable energy
said its CO2 emissions would peak “around” 2030, development providing that electricity generated
a target most analysts considered within reach. from renewable sources could be absorbed by
But achieving carbon neutrality before 2060 will grids. It aims for total installed capacity of 340 GW
require drastically reducing the use of fossil fuels of conventional hydropower, with installed capacity
in transportation and electricity generation and of both wind and solar power to reach about 240
offsetting any remaining emissions through carbon GW by 2021. However, about 4% of the electricity
capture and storage or planting forests. China has generated by wind farms and 2% by solar stations
not yet revealed details of how it will do this. Coal did not connect to China’s grid in 2019, thanks to its
is both the biggest challenge and an opportunity. insufficient power carrying capacity. To push local
The carbon-heavy fuel accounted for about 58% of grid firms to prioritize purchase of clean sources,
China’s total energy consumption and 66% of its the agency set quotas early this month for each
electricity generation in 2019. But it will require a province’s minimum consumption of renewable
U-turn. A recent study by Myllyvirta and colleagues electricity in 2020 (Xu and Stanway).
found that China’s coal-fired generating capacity
grew by about 40 gigawatts (GW) in 2019, to about Wind Power
1050 GW. Another 100 GW is under construction
and coal interests are lobbying for even more China will install 251GW of new wind energy
plants. This is all despite significant overcapacity in capacity between 2020 and 2029. More than 25
the sector, with plants running at less than 50% of wind bases totaling over 100GW of capacity are
capacity and many coal-power companies losing already planned and under construction to support
money. A related challenge will be reforming the near-term wind growth. In the long run, falling
electricity market. Renewable energy is increasingly levelized cost of electricity (LCOE) is expected to
cost competitive with coal, but regulators allocate drive capacity additions. Subsidy phase-out is
operational time among electricity plants to match expected to impact only 16% of onshore wind
generation to demand, with little consideration of capacity additions. The country’s wind power
economic or environmental implications. The system market could reach a cumulative grid connected
overwhelmingly favors coal-fired generation, partly capacity of 461GW by the end of the decade. The
because it doesn’t suffer from the variability of wind coronavirus has impacted 10% of new capacity
and solar power. The uncertain market access has additions in 2020. However, the bigger challenge
already slowed investment in renewables. Given for wind developers was the looming deadline for
the power of coal and construction interests, the the termination of national subsidies by the end of
needed reforms will take considerable political will. 2020 (Nhede).
Expanding nuclear power presents challenges as
well. The 2011 Fukushima Daiichi nuclear disaster in The world’s offshore windfarm capacity could
Japan sent ripples of concern through China, which grow eightfold by the end of the decade powered
mandated additional safety measures that made by a clean energy surge led by China. Stronger
new plants more expensive. Public opposition than expected growth for the offshore wind
is also growing. China has 48 nuclear power industry could reach 234GW by 2030, from a global
reactors in operation and 12 under construction. tally of just over 29GW at the end of last year.
The government had aimed for 58 GW of nuclear Governments around the world recognize the role
capacity by 2020 but did not get beyond 52 GW. that the technology can play in jumpstarting the
China’s Five-Year Plan for 2021–25, being drafted post-Covid economy recovery. The offshore wind
as of this writing, may contain concrete measures industry could create 900,000 jobs globally over
to help realize Xi’s ambitious target. China’s interest the next decade, or even more if policymaker’s
in climate change has waned in recent years, due post-pandemic economic stimulus packages to
to the slowing down of economic growth and the accelerate the sector’s growth. The offshore market
US withdrawal from the Paris agreement. The has grown on average by almost a quarter every
commitment on carbon neutrality reignited hopes year since 2013, led by a flurry of new projects in
for China’s climate action (Normile). European waters, which hold 75% of the world’s
358
habit will be particularly hard. China had previously China will continue to support renewable energy
said its CO2 emissions would peak “around” 2030, development providing that electricity generated
a target most analysts considered within reach. from renewable sources could be absorbed by
But achieving carbon neutrality before 2060 will grids. It aims for total installed capacity of 340 GW
require drastically reducing the use of fossil fuels of conventional hydropower, with installed capacity
in transportation and electricity generation and of both wind and solar power to reach about 240
offsetting any remaining emissions through carbon GW by 2021. However, about 4% of the electricity
capture and storage or planting forests. China has generated by wind farms and 2% by solar stations
not yet revealed details of how it will do this. Coal did not connect to China’s grid in 2019, thanks to its
is both the biggest challenge and an opportunity. insufficient power carrying capacity. To push local
The carbon-heavy fuel accounted for about 58% of grid firms to prioritize purchase of clean sources,
China’s total energy consumption and 66% of its the agency set quotas early this month for each
electricity generation in 2019. But it will require a province’s minimum consumption of renewable
U-turn. A recent study by Myllyvirta and colleagues electricity in 2020 (Xu and Stanway).
found that China’s coal-fired generating capacity
grew by about 40 gigawatts (GW) in 2019, to about Wind Power
1050 GW. Another 100 GW is under construction
and coal interests are lobbying for even more China will install 251GW of new wind energy
plants. This is all despite significant overcapacity in capacity between 2020 and 2029. More than 25
the sector, with plants running at less than 50% of wind bases totaling over 100GW of capacity are
capacity and many coal-power companies losing already planned and under construction to support
money. A related challenge will be reforming the near-term wind growth. In the long run, falling
electricity market. Renewable energy is increasingly levelized cost of electricity (LCOE) is expected to
cost competitive with coal, but regulators allocate drive capacity additions. Subsidy phase-out is
operational time among electricity plants to match expected to impact only 16% of onshore wind
generation to demand, with little consideration of capacity additions. The country’s wind power
economic or environmental implications. The system market could reach a cumulative grid connected
overwhelmingly favors coal-fired generation, partly capacity of 461GW by the end of the decade. The
because it doesn’t suffer from the variability of wind coronavirus has impacted 10% of new capacity
and solar power. The uncertain market access has additions in 2020. However, the bigger challenge
already slowed investment in renewables. Given for wind developers was the looming deadline for
the power of coal and construction interests, the the termination of national subsidies by the end of
needed reforms will take considerable political will. 2020 (Nhede).
Expanding nuclear power presents challenges as
well. The 2011 Fukushima Daiichi nuclear disaster in The world’s offshore windfarm capacity could
Japan sent ripples of concern through China, which grow eightfold by the end of the decade powered
mandated additional safety measures that made by a clean energy surge led by China. Stronger
new plants more expensive. Public opposition than expected growth for the offshore wind
is also growing. China has 48 nuclear power industry could reach 234GW by 2030, from a global
reactors in operation and 12 under construction. tally of just over 29GW at the end of last year.
The government had aimed for 58 GW of nuclear Governments around the world recognize the role
capacity by 2020 but did not get beyond 52 GW. that the technology can play in jumpstarting the
China’s Five-Year Plan for 2021–25, being drafted post-Covid economy recovery. The offshore wind
as of this writing, may contain concrete measures industry could create 900,000 jobs globally over
to help realize Xi’s ambitious target. China’s interest the next decade, or even more if policymaker’s
in climate change has waned in recent years, due post-pandemic economic stimulus packages to
to the slowing down of economic growth and the accelerate the sector’s growth. The offshore market
US withdrawal from the Paris agreement. The has grown on average by almost a quarter every
commitment on carbon neutrality reignited hopes year since 2013, led by a flurry of new projects in
for China’s climate action (Normile). European waters, which hold 75% of the world’s
358
