Energy demand to outstrip China’s renewable energy efforts

Beijing is making every effort to steer the country towards renewable energy, but China—already the biggest carbon polluter worldwide—is projected to emit 43% more carbon dioxide from turning coal into electricity by the end of the decade, according to a special report by the Economist Intelligence Unit.

In 2010, China consumed about 3.7 billion short tons of coal, or about 46% of the world’s total coal consumption, according to the US Energy Information Administration. A cheap but dirty resource in China, coal accounted for nearly three-fourths of 2010 domestic energy consumption, the Economist Intelligence Unit figured.

By 2020, cleaner-burning natural gas and renewable and nuclear energy will become more important, the Economist Intelligence Unit’s report projected, partly because of a 2005 law that requires 15% of total energy to come from non-fossil fuel sources. The share of energy generated from coal should shrink to a little more than half by 2020. 

But China’s total demand for energy is projected to outstrip its renewable energy efforts. The report expects China to burn 35% more coal in 2020 than it did in 2010, pushing up CO₂ emissions by 43%.

“Although China will grow greener in relative terms, judged purely on how much carbon it emits, the opposite will be true,” Martin Adams, the Economist Intelligence Unit’s energy editor, wrote in an introduction to the report.

“Grey will remain the dominant colour,” Adams added.

Granted, China’s size makes the projected increase in renewable energy generation sound more modest than it is.

The share of energy generated from non-fossil fuel and renewable sources such as wind, solar and hydropower should rise from 13% of total energy consumption in 2010 to more than 16% in 2020. Just the increase in the use of renewables is about equivalent to Canada’s total annual energy consumption, Adams wrote.

Still, renewable energy production in China faces hurdles:

• The country’s most prominent wind-turbine producers are among the top five global turbine manufacturers, but bruising price warfare and demand that trails production are expected to force Chinese turbine manufacturers to look for business in other countries.
• The euro-zone crisis has lowered demand for Chinese solar cells, which constituted about half of the world’s supply, and China’s domestic solar energy market is not well developed.
• Growing concerns about the environmental costs of dam-building and difficulties in harnessing increasingly inaccessible water resources are projected to interfere with the Chinese government’s hydropower generation targets.
• Beijing supports incinerating more of the about 250 million tonnes of annual household waste that are largely landfilled now. But harmful emissions from the waste incinerators—such as nitrous oxide and sulphur dioxide, which are emitted at as much as five times the levels permitted for power plants—are causing citizen backlash.

 
—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.