No other country is investing as heavily in clean energy as China these days, but at the same time no other country burns as much coal to fuel its economy. So how green will China actually become? That is the question posed by a new report on China’s environmental policies.
The report titled “China Energy: A Greener Shade of Grey”, from the Economist Intelligence Unit (EIU), says that renewables and nuclear power combined will supply 16% of China’s energy needs by 2020, up from 13% in 2010. Over the same decade, however, coal consumption will also rise 35% and carbon emissions by 43%.
The study highlights China’s expansion of renewable energy, but says its insatiable demand for coal, together with problems in the renewable sectors and waste management make for a gloomy outlook – hence the conclusion that the country’s policy is “a greener shade of grey”.
“With a mixture of new-fangled carrots and old-fashioned sticks, China is opening up a continent-sized economy for renewable energy equipment,” explained Martin Adams, the EIU energy editor.
“Our report looks at the challenges in each of these sectors and asks whether we are witnessing the birth of a low-carbon economy, or merely the application of a greenish tint to the same old dirty energy policy.”
Starting with the problems surrounding by the wind power industry, the research pointed out that structural cracks had begun to show. Based on official figures, 28% of turbines did not even have a connection to the grid at the end of 2011.
Wind has become less attractive because the power it produces is not only expensive but also variable, posing a threat to the stability of the electricity network. Profits made in the industry have tumbled, which will therefore slow installation growth. As a result, Chinese turbine makers, at these days realise that their fortunes will be increasingly reliant on foreign gusts, forcing them to look to overseas markets.
Solar power, meanwhile, is facing different obstacles as equipment production, chiefly solar panels, was stimulated extravagantly without commensurate encouragement of the market for solar output. According to Bloomberg New Energy Finance, global prices for solar modules dropped 47% last year thanks to widespread overcapacity and a sharp fall in solar-equipment prices.
However, cheaper equipment in another sense lead to government’s subsidy cuts that consequently hurt solar makers. Moreover, US dumping duties to punish China for subsidising its solar companies, together with Europe’s debt woes, have curbed demand from overseas markets. The report observed that the expensive and nascent solar energy industry needs a lot more work from all sides to achieve consolidation.
While not attracting as much attention as its greener cousins, hydropower in fact produces more electricity than both wind and solar combined, but it is also expected to slow down. The EIU report suggests that dam-building will face slower installations growth given the complexity of the projects that often concern issues such as remoteness, environmental concerns and relocation of people. Such factors, together with stiff domestic competition, will push Chinese hydroelectric companies into overseas adventures.
A good example would be the China Three Gorges Corporation, which last year proposed investing up to US$15 billion in Pakistan to dam the Indus river valley. Similar to what happened to the wind power industry, many international exploitation ventures are expected to follow.
Of greater concern for the continent-sized country of China is its waste management plan. With 1.3 billion people, China generates one-quarter of the world’s garbage, and for this reason its approach to waste incineration matters, said the EIU.
“The country’s target of moving away from landfills to burn 30% of waste in order to produce energy by 2030 sounds praiseworthy, yet the current incineration practices are often environmentally dubious,” it said.
The EIU found that the controls on waste-to-energy policy are lax, as waste is often laced with up to 70% coal, and its emissions can be even more harmful than those from coal alone.
After growing by 136% over the last decade, China’s energy consumption continues ever higher. However, in a number of green areas, the country is actually well ahead of those in the more developed parts of the world.
Sceptics may still doubt the strength of China’s motivation to meet its energy needs in less dirty and wasteful ways. “An epic race between grey and green is on,” said the EIU, and it is important to closely watch how seriously China can wean itself off coal and tap the sun and the wind.
The outcome of this race will determine how bad global warming is going to get. But right now grey will remain the dominant colour in China for years to come.
About the author
- Writer: Nithi Kaveevivitchai
Position: Asia Focus Reporter