China’s energy revolution

Virtually devoid of clean power just over a decade ago, China is now seen as a global trailblazer in many key renewable sectors, thanks to its aggressive green energy program. After a recent $80bn investment in clean electricity, the superpower is now leading the way towards a green revolution.


Solar china

As the world's biggest polluter, China has not been recognised as a leader in transitioning to green energy. But, according to the head of the International Energy Agency (IEA), China "deserves more credit" for its renewable efforts. Speaking to the BBC, Maria van der Hoeven brought home a less-known fact about the country's approach to energy production: China is the world's biggest investor in clean energy, with more funds spent on renewable sources than the US and Europe put together.

Der Hoeven's company, the energy think-tank IEA, found that in 2014 China dedicated more than $80bn to clean energy, much higher than the EU ($46bn), Japan ($37bn) and the US ($34bn). That same year, China lowered its emissions by 1% for the first time ever, as coal use declined.

At the end of June this year, China submitted its pledge ahead of the UN climate change summit in Paris, outlining its emission targets and vouching for continuous investment in its ever-expanding green energy market.

According to the pledge, in the course of a decade, its solar power output grew 400-fold, wind power capacity grew 90-fold, followed by further, smaller growth in nuclear, hydroenergy and biopower. In the majority of these sectors, China has been constantly updating its targets to match the speed of development.

Looking to the future, China promises to continue investing in green energy in keeping with international standards. It hopes to peak its carbon dioxide emissions by 2030, if not earlier, and promises to increase the share of non-fossil fuels in primary energy consumption to around 20%.

While overall its power sector is still dominated by oil, gas and coal sources (coal remains the dominant source of the country's electricity), China is rapidly throwing its weight behind green energy creation.

Solar: China's production exceeds all other countries combined

Solar power is by far the fastest growing energy sector in China. Data collected by the Earth Policy Institute (EPI) documented its impressive surge in photovoltaic (PV) production: between 2000 and 2012, China multiplied its solar production from 3MW to 21,000MW - far exceeding the levels of all other countries in the world combined.

This trend has continued in recent years, with solar registering a 67% growth between 2013 and 2014, according to Carbon Brief. This made China the top installer of PV energy worldwide last year, with 10,5GW of added capacity.

Forecasts look equally promising: GTM Research notes that China has emerged as the world's largest market for solar panels, and in 2015 it is expected to be home to a quarter of the planet's new energy capacity from solar panels. Over the next five years, 25% of global PV demand will be from China alone.



The US Department of Energy (DOE) has issued $12.5m in funding towards the US-China Clean Energy Research Centre.


Internally however, PV theoretically contributes less than 1% in rapport with the total energy demand and consumption in China, the 'Snapshot of Global PV Markets 2014' report notes.

The industry is also battling some issues. In July, figures from China's National Energy Administration reflected that up to 9% of the country's solar output was curtailed during the first half of the year due to grid constraints. Many solar panels compete with coal plants for access to the grid, usually at the loss of solar. But the management of the electricity grid is expected to advance dramatically by 2020 and new regulations are hoped to "ensure adequate compensation for distributed generation", GTM Research says.

As the global market for solar PV is set to triple by 2020, GTM's outlook predicts that China will completely drop feed-in tariffs (FIT), relying entirely of market-based demand to support its planned growth of over 100GW solar power capacity before 2020.

Wind: comfortably the world's largest market

Last year, there was a boom in China's wind industry ahead of a looming cut in FIT, which was partially introduced at the start of this year. Developers rushing to complete projects before the cut-off date added a "world record" 23GW of new wind power capacity in 2014 (or 40% of global new capacity last year) according to Bloomberg New Energy Finance (BNEF) and the EPI. Its current cumulative capacity of 96GW makes it "comfortably the world's largest wind energy market", BNEF notes.

The electricity generated by China's wind farms in 2014 -- 16% more than the year before -- could power more than 110 million Chinese homes and now surpasses the energy created by all the nuclear power plants in the US combined.

Data gathered by Windpower between 1997 and 2014 shows how China's wind energy came to be the country's third-largest power source: in less than 15 years, China's wind production capacity grew from 146MW to over 114,700MW.

By the end of this year, it aims to achieve 100GW of on-grid capacity, doubling that to 200GW by 2020. To achieve these targets, Beijing plans annual investments of $27bn in the wind farm industry. Statista predicts a lucrative future for Chinese wind turbine manufacturing, with operating revenues of $2bn in 2016 and $2.1bn in 2020.

"The electricity generated by China's wind farms in 2014 -- 16% more than the year before -- could power more than 110 million Chinese homes."

Similar to solar, however, the wind industry is not without its problems. Curtailment from the grid poses the same challenge to turbine operators, with one-fifth of China's wind electricity curtailed in the first three months of 2015, Reuters reported.

The situation has been improving over the past few years however, with EPI stating that "since 2012 the rate of this curtailment at China's wind farms has dropped by more than half".

As China's demand for electricity increases an estimated 10% each year, authorities are accommodating wind power production: EPI's March report mentions that apart from building the world's largest ultra-high-voltage transmission system, which will connect remote wind-strong provinces to the more populous ones, the government is also providing incentives for wind farm development in less windy areas. At the moment, the country has 77GW of wind capacity under construction.

Nuclear: China to surpass Russia and South Korea, targeting 58GW by 2020

While the country is leading in terms of solar and wind energy construction, its nuclear program is equally aggressive on a global scale. According to EPI, 25 out of the 68 nuclear reactors being built worldwide are located in China. At the moment, it has 27 reactors in operation, with an output of over 23GW.

Currently in the sixth position globally, China expects to surpass South Korea and Russia in terms of nuclear generating capacity for the first time in history by the end of this year. The government's official target is 58GW by 2020, with a further 30GW under construction at that time.

China's nuclear development was severely delayed after Japan's coastal Fukushima nuclear disaster in 2011, when Chinese authorities suspended approvals of any new-built reactors while undertaking safety tests for the existing ones. Although the suspension was lifted in late 2012, a two-year gap in construction proved a big setback to China's long-term nuclear targets, which had to be revised down from 70-80GW to the current 58GW. On average, it takes approximately six years to complete a reactor in China, EPI says.



China has signalled plans to invest $16bn into its electric vehicle (EV) charging infrastructure.


Since the start of this year, the country is back on track, however. IEA reports that "the number of reactors under construction is currently the highest in 25 years, with the People's Republic of China leading the way in terms of new projects".

Stricter targets set under the 2°C Scenario (2DS) (which aims to cut CO2 emissions by more than half by 2050) would require China to have a total nuclear capacity of 250GW by 2050 in order to keep within the limits.

IEA's 'Technology Roadmap' report estimates that under the 2DS, "China would need to invest just over $1tn in new nuclear capacity."

Biopower: China may prove a gem for biomass development

The bio-power market has yet to mature and reach its potential, both globally as well as in China.

The 'Renewables 2015 Global Status Report' by energy network REN21 shows that global biopower capacity has increased by 9%, from 88GW in 2013 to 93GW in 2014. China is again amongst the leaders in capacity additions: "In 2014, China's biopower capacity increased by 1.5GW to 10GW. Most of the total (about 53%) was from agricultural and forestry products, and from municipal solid waste (about 45%)," the report read.

"In 2014, China's biopower capacity increased by 1.5GW to 10GW."

Over the last decade, the biopower industry in China grew at an average rate of 15%, mainly due to policy initiatives taken by the government and incentives provided to generate clean energy, according to GlobalData. As a result, biopower accounts for 3.77% of the country's total renewable power capacity, around 8.27% of the total renewable power generation and 0.75% to the total electricity generation in China.

GlobalData's 'Biopower in China, Market Outlook to 2025' proved optimistic in regards to its biomass market: "The roadmap for biomass is under study in China and may prove a gem for development of the sector. In its 2011-2015 Plan, the government aims to install 15GW of biomass capacity by 2015. The country has vast farmlands in the coastal areas, which are densely populated and has high power demand," the GlobalData outlook reads. "Therefore, the technology has good growth prospects due to available potential in the country."

As a result, China's total biopower installed capacity is expected to see a compound annual growth rate (the imagined growth if rate keeps steady) of approximately 9% between 2014 and 2025, to eventually reach 22GW capacity by 2025.