China cuts back on coal at home, globally Chinese investment ‘stokes coal power growth’

(BE2C2 Report); Oct 16, 2016 — Scientists say 2014 was a turning point for climate change. And it’s all thanks to China.

In 2015, the world’s largest carbon emitter had the biggest financial commitment to renewable energy — shifting gear from coal and investing over $100 billion, an increase from $3 billion just over 10 years ago.

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Back in 2012, the International Energy Agency (IEA) attempted to contextualize the global coal industry. “Coal is China. China is coal” was the buzz word. At that time China was producing and consuming half of the world’s coal.

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Around 2,600 coal-fired power stations across China keep the world’s second-largest economy running. They also churn out billions of tons of greenhouse gases. The infographic above shows every coal-fired power station currently operating, or under construction, in China.

Now the world’s largest carbon emitter and second largest economy aims to reposition itself as a global green power, amid commitments from its top leaders to deliver clean energy and low carbon infrastructure for developing countries.

An estimated 92% of the world’s population lives in areas where air pollution exceeds safety limits, according to the World Health Organization (WHO), which has released new research showing where the worst – and least – affected places are.

An estimated 92% of the world’s population lives in areas where air pollution exceeds safety limits, according to the World Health Organization (WHO), which has released new research showing where the worst – and least – affected places are.

Therefore, China’s relationship with coal appears to be changing — at home. According to the Institute for Energy Economics and Financial Analysis, global consumption of coal peaked in 2013 and China’s reduced use was a big driver in the worldwide fall.

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Nicholas Stern, a climate economist at the London School of Economics said China’s coal peak was a pivotal moment in the fight against climate change.

“I think historians really will see 2014 as a very important event in the history of the climate and economy of the world.”

Scaling back on coal power

Analysts say China’s investment in coal infrastructure at home appears to be going into reverse. In April, China’s National Energy Administration announced plans to scale back on the construction of new coal-fired power plants across the country.

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The executive secretary of the UN’s Framework Convention on Climate Change, Patricia Espinosa, welcomed the signs that China is becoming less reliant on coal.

“This assessment of the possible peaking of China’s coal use is a very positive development in international efforts to address climate change,” Espinosa said.

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“It underlines how ambitious and deliberate policies to shift away from highly polluting fuels to cleaner energy sources can deliver global climate benefits and national improvements in health and indeed in people’s lives.”

As the use of coal falls, the race for renewables is gathering pace – a welcome sign that China is leading it.

China’s Renewable Energy Industries Association says solar energy production was up 28% in the first half of 2016. Wind and hydro power production has also increased by 13%. This is in line with an existing trend that has seen China lead the way — by more than double, in renewable energy investment both at home and worldwide.

However, a report in the Energy Post titled “New Data Show: China Stokes Global Coal Power Growth,”  claims that “China is cutting coal usage at home but new data show that Chinese state owned companies and banks are driving new coal expansion overseas, despite top level promises of green growth for developing countries,” writes Beth Walker for China Dialogue. (China Dialogue.)

The article points out that Chinese companies and banks are continuing to drive global coal expansion, as state owned companies, backed by state loans, build coal-fired power plants across the world. This is despite commitments from China’s top leaders to deliver clean energy and low carbon infrastructure for developing countries.

“In a joint US-China statement at the White House in September 2015, President Xi Jinping agreed to strictly control public investment for overseas projects with high pollution and carbon emissions. China won praise for promising to peak its greenhouse gas emissions by 2030 at the UN climate summit in Paris in 2015 – and trying to wean itself slowly off coal. Chinese manufacturers are now major suppliers of cheap solar and wind parts worldwide.”

However, these efforts are being undercut, the report says, by Chinese backed coal power plants planned and under construction from Indonesia to Pakistan, Turkey to the Balkans –as well as in Africa and Latin America. “These could boost global emissions and lock developing countries into fossil fuel intensive energy systems for decades,” the Energy Post reports.

The Diplomat newsmagazine observes that Chinese banks and companies are currently involved in at least 79 coal fired generation projects, with a total capacity of over 52 GW, more than the 46 GW of planned coal closures in the United States by 2020.

“Beijing has encouraged state owned coal companies and energy intensive industries such as concrete, steel, and cement, to “go out” as part of the One Belt One Road Initiative (OBOR). This aims to open up new opportunities for Chinese companies and to build infrastructure to link China to the Asian, Middle Eastern, African, European markets and beyond,” The Diplomat article claims.

 

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BE2C2 is a business unit of Irshad Salim Associates  and publishes reports, news, analysis, available data and related information from sources readily available on the web and in the public domain.

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