Chinese energy sees a green future

China still relies heavily on coal. But the country has overtaken the US in wind power and it is showing brisk progress with its solar and, to a lesser extent, nuclear energy ambitions.

A monument, which reads: "Home of rare earths welcomes you", stands in a field of wind turbines near the town of Damao in China's Inner Mongolia Autonomous Region. Reuters

Resembling creatures from a 1970s science fiction novel, vast wind turbines stand by the dozen beside one of the main roads heading into China's Inner Mongolia province.

Their blades turning almost in unison, they represent the front line of China's attempts to curb its addiction to coal - and perhaps help to slow the rise in global temperatures.

Last year, China overtook the United States to become the country with the largest installed wind power capacity, at 62.7 gigawatts, after installing an extra 18GW. More than a quarter of the world's wind power capacity is now based in China, a proportion set to grow.

There has been similarly brisk progress with solar power, with the country now aiming for 21GW of power generation capacity by 2015, more than a third greater than an earlier target, and some commentators suggest it could go higher still. That demonstrates ambition given that last year China's solar power sector only accounted for 2GW.

By building up solar power manufacturing, China aims by 2015 to reduce the price of solar panels to US$794 (Dh2,916) per kilowatt, down from about $1,111, making installations more economically feasible.

"I think China has done a lot, especially with PV [photovoltaic] panel development. There are a lot of incentives from the government and, after this, the price goes down and they can be installed," says Chung Chiyung, the head of the power systems research group at Hong Kong Polytechnic University. "After they have this technology, they have a huge momentum to build renewable energy power." Over the next several years, China is expected to account for 40 per cent of the growth in renewable energy worldwide.

The country is also set to announce plans for rapid growth in its nuclear industry, although because of the Fukushima disaster in Japan last year, Beijing will probably scale back its original plan to build more than 100 new reactors.

With stockpiles of coal building up this year, it may seem like the country really is getting tough on fossil fuels.

This year, the growth in overall energy use in China has slowed. In the first five months electricity use was 5.8 per cent higher than in the same period last year, according to the National Energy Administration, lower than in previous years.

Part of this slowdown stems from changes in the economy with greater emphasis being paid to the less energy intensive service sector instead of heavy industry.

Yet for all this, there are few causes for cheer in terms of China's overall carbon emissions, which are set to continue to grow for decades.

About 70 per cent of China's energy needs are met by coal, with crude oil and natural gas contributing a further 22 per cent. That means more than 90 per cent of China's energy comes from fossil fuels.

"The biggest problem is that, while renewable is growing, coal burning is increasing even faster. That's the reality China is facing. GDP growth is … making the country thirsty for more energy. Unfortunately, most of the energy still comes from coal," says Li Yan, the head of the climate and energy campaign for Greenpeace East Asia. Last year, according to official figures, China used 9.7 per cent more coal than the year before, although the actual amounts used were not announced.

While China wants to reduce energy intensity per unit of GDP by 16 per cent by 2015, this will not prevent growth in emissions in absolute terms. "The central government has shown a clear willingness to solve [China's] energy and environmental problems but, from the options they can choose from, I don't think they're using all of them and I'm not sure the willingness has been transmitted to the other levels of government," Ms Yan said.

Even over the next 10 to 15 years, renewable energy will only play "a supplementary role" in satisfying China's energy demands, says Larry Chow, the director of the Hong Kong Energy Studies Centre at Hong Kong Baptist University.

By 2020, the government has said, 15 per cent of China's energy should be coming from renewable sources.

"Wind and solar are growing but because they're starting with a small base, the proportion of their contribution is insignificant. Even five years later or 10 years later, the contribution will really not be substantial." Even in 2050, coal is still expected to supply about half of China's energy needs and by that time the country's overall energy use will be significantly higher than today.

In 2008, China's total energy consumption was measured at 1,900 million tonnes of oil equivalent, or about 20.3 per cent of world consumption, and this figure is predicted to rise to 5,000 by 2040. At least by this time, says Mr Chow, renewable forms of energy will play "a much more important role".

In the meantime, efforts are being made to shift to cleaner fossil fuels. The four coal-burning power plants in Beijing are scheduled to switch to natural gas over the next several years, a development that has caused concern among power companies because of the higher costs. The authorities appear to be keen to subsidise the changeover because of significant environmental benefits.

"It's extremely cleaner [in terms of] health hazardous pollutants like sulphur dioxide and nitrogen oxides," says Laban Yu, the head of energy research at the securities and investment bank Jefferies.

Other cities have also promoted natural gas, which generates as little as 40 per cent of the carbon emissions of coal, although some have questioned whether there is a commitment nationwide, rather than just in flagship cities, to these cleaner fossil fuels. Overall, the challenges facing China as it tries to limit carbon emissions and clean the air remain acute.

"It's too early to say that coal expansion in China is slowing. It's still growing," says Greenpeace's Ms Li.

"We're still seeing many local provinces putting on their calendar major developments of coal digging," she says. "Coal extraction, power generation and really heavy industries like these are very energy intensive and have huge local environmental impacts and carbon emissions."

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