ShareBEIJING: China aims to double its wind and solar capacity by 2025, according to a new road map that also allows for more coal-fired power plants to bolster energy security. The world’s biggest polluter earlier estimated it needs to double wind and solar use by 2030 to deliver on its pledges under the Paris climate accord. The latest plan — if implemented — means China might reach that goal earlier.
But Beijing has also ramped up reliance on coal-fired power plants in recent months to support its ailing economy as the Ukraine war pushes up global energy prices. The country’s central economic planner said 33 percent of power supply to the national grid will come from renewable sources by 2025, up from 29 percent in 2020, in a document released Wednesday.
“In 2025, the annual power generation from renewable energy will reach about 3.3 trillion kilowatt-hours... and the wind power and solar power generation will double,” the plan said. China, already the world’s largest producer of renewable energy, has accelerated investment in solar and wind projects to tackle pollution at home, which researchers say kills millions every year.
Beijing has pledged to peak emissions by 2030 and become carbon neutral by 2060. Investment in solar energy nearly tripled in the first four months of the year to 29 billion yuan ($4.3 billion) compared with January to April investment in the previous year, data from the National Energy Administration shows. But China’s energy policy has remained a two-headed beast, with the country burning about half the coal used globally each year to power its economy.
Policymakers further embraced coal as the Ukraine war pushed up prices of oil and natural gas. Premier Li Keqiang said coal underpinned China’s energy security in an emergency meeting last week to address economic woes, and the central bank has approved a $15 billion credit line to fund coal mining and coal-fired plants. In March, the cabinet ordered miners to dig up 300 million tons of extra coal this year.
Local governments started building new power plants last year that will boost capacity from coal by the most since 2016, after an energy crunch paralyzed swathes of the economy. Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, said “energy security — avoiding another energy shortage and managing geopolitical risks — is the overwhelming priority” for China with the economic outlook uncertain.
The latest energy plan says renewables will supply “50 percent of the growth in power consumption” to 2025, lower than previous official estimates and signaling more room to expand coal power. “The planners are projecting, or preparing for, faster demand growth which would see fossil fuel use and emissions still increase,” Myllyvirta said.
Meanwhile, China has launched a $120 billion credit line for infrastructure projects, state media reported, as Beijing tries to jump-start its ailing economy, which has been pounded by the country’s zero-Covid measures. Growth has slowed sharply in recent months as the Communist leadership sticks to a strategy of quashing virus clusters with mass tests and lockdowns — forcing factories to halt work and clotting supply chains.
Premier Li Keqiang last week called for “reasonable” expansion in the second quarter as fears mount for the vaunted official annual growth target of around 5.5 percent. Pump priming hard-hit provinces with infrastructure schemes has emerged as a key tool to create jobs and drive growth in local economies flatlined by the virus and a concurrent collapse in receipts from land sales to developers.
A State Council meeting chaired by Li on Wednesday approved a mammoth new sum for infrastructure. “It is necessary to increase the credit line of policy banks by 800 billion yuan ($120 billion),” state broadcaster CCTV reported. Experts say the announcement is likely to help provincial governments match Beijing’s banner statements on supporting growth. “It will provide long-term support to various infrastructure projects,” said Betty Wang and Zhaopeng Xing of ANZ Research in a report on Thursday. In turn that will “drive business activities along the supply chain”.
The amount is “nearly half of the 1.65 trillion yuan in new policy bank lending in 2021”, Nomura analysts added in a note. The sum accounted for about a fifth of new medium to long-term loans for the infrastructure sector in 2021, the note said. Nomura analysts estimate that Beijing has a six trillion yuan funding gap, in part due to a collapse in land sales — a key source of funds — and because of the Omicron wave.
The latest virus outbreak was China’s worst since early in the pandemic, and caused its key business hub Shanghai to be sealed off for two months. While the city has since eased curbs as cases drop, a rebound will be gradual — businesses remain jittery over future flare-ups and there is a massive backlog of goods at the port. – AFP
