Why China didn’t sign global pledge to triple renewables

The renewables target is achievable but other elements would be much more difficult, say Chinese experts.

The tripling goal comes from a report published by the International Renewable Energy Agency (IRENA) in the summer. World Energy Transitions Outlook 2023 found that renewable power capacity must triple by 2030 if global heating is to be limited to 1.5°C. Image: , CC BY-SA 3.0, via Flickr.

On day three of the COP28 UN climate negotiations in Dubai, applause greeted the news that Mexico had signed up to a global commitment to triple renewable power capacity and double energy efficiency by 2030. It brought the number of countries making the commitment up to 118. That has since swelled to 123.

China Dialogue asked experts why China, despite being a world leader in renewables, has not signed. The general picture they gave is that the tripling is achievable, but the doubling is a sticking point. Energy efficiency is the size of an economy divided by its energy use.

Although China has been making strides in cutting the amount of energy required to produce a unit of GDP, reducing this “energy intensity” a further 4 per cent every year to 2030 would be extremely challenging. This is because China’s economy is still at a stage where it relies on energy-intense sectors such as heavy industry.

The renewables target: achievable

The tripling goal comes from a report published by the International Renewable Energy Agency (IRENA) in the summer. World Energy Transitions Outlook 2023 found that renewable power capacity must triple by 2030 if global heating is to be limited to 1.5°C. That’s calculated on a baseline of the end of 2022, when the capacity was 3,400 gigawatts (GW). In other words, 11,000 GW of capacity will be needed by the end of the decade.

Three months after the report was published, the G20 New Delhi Leaders’ Declaration adopted the target, along with others including a faster phasedown of unabated coal power. China, as a G20 nation, was part of that consensus.

The current tripling target is a global target. If China was to do that, and we suggest only considering non-hydropower renewables, we calculate a 2022 baseline of 800 gigawatts, which would mean tripling to 2,400 gigawatts by 2030. That would take work, but it’s achievable.

Wang Yi, deputy chair, National Expert Committee on Climate Change

Moreover, just last month, China and the US published the Sunnylands Statement on enhancing climate action. The agreement stated that: “Both countries support the G20 Leaders Declaration to pursue efforts to triple renewable energy capacity globally by 2030 and intend to sufficiently accelerate renewable energy deployment in their respective economies through 2030 from 2020 levels.” (The wording suggests use of a 2020 base line domestically, rather than 2022.)

It’s worth noting that the target does not apply to all countries equally. That is, not all are expected to triple renewables capacity by 2030, as some are developing faster than others. The four biggest renewables generators in 2022 were China, the US, Brazil and India – with China at three times the capacity of the US in second place.

Despite this, a tripling of renewables capacity would not present a problem for China, on either the 2020 or 2022 baseline.

Using the 2020 baseline of 934 GW would mean China needs about 2,800 GW of renewables capacity by 2030. All the experts consulted by China Dialogue were confident this can be achieved. Dr Yang Fuqiang, a senior advisor to Peking University’s Climate Change and Energy Transition Program, predicts the figure will stand at 2,800 to 3,000 GW.

At a COP28 side event, Wang Yi, deputy chair of the National Expert Committee on Climate Change, said: “The current tripling target is a global target. If China was to do that, and we suggest only considering non-hydropower renewables, we calculate a 2022 baseline of 800 gigawatts, which would mean tripling to 2,400 gigawatts by 2030. That would take work, but it’s achievable.”

The energy efficiency target: a sticking point

One possible reason that China and India, biggest and fourth-biggest renewables generators respectively, did not sign the pledge is the bundling of the headline target of tripling renewables with doubling energy efficiency. Experts said the countries were keen not to over pledge and under deliver, aware that whatever targets they commit to, even if not binding on individual countries to achieve, may invite international pressure.

According to calculations by the International Energy Agency (IEA), doubling energy efficiency globally would require an annual 4 per cent fall in energy intensity, or an overall fall of 32 per cent on 2022 levels by 2030.

Currently, among the G20 members, only China, Japan, France, the UK and Indonesia have managed 4 per cent falls in energy intensity over any period of five consecutive years.

The energy efficiency target is a much tougher ask, says Professor Teng Fei, of Tsinghua University’s Institute of Energy, Environment and Economy.

“IRENA asking China to achieve that goal is like “whipping a willing ox”, as countries with higher baselines will end up with much tougher goals,” he told China Dialogue.

“Whip a willing ox” is an old Chinese saying meaning ask for more from one who has already fulfilled their obligations, or ask someone to go beyond the call of duty.

He went on: “China has already achieved 4 per cent falls in energy intensity. In the last decade, we’ve seen a cumulative fall of 26 per cent. But maintaining that rate of change is no easy task.”

China has seen a shift in its thinking on achieving peak carbon, says Lauri Myllyvirta, lead analyst at think-tank the Centre for Research on Energy and Clean Air (CREA). Previously, it encouraged “dual controls” – on energy intensity and total energy consumption. Now, it promotes energy saving and emissions reductions, he explained.

Last year, due to the pandemic, the less energy-intensive services and consumer sectors were hit hard. Meanwhile, energy consumption grew 2.9 per cent on the previous year, with coal consumption going up by 4.3 per cent. That meant energy intensity for 2022 was virtually unchanged on 2021, dropping by only 0.1 per cent.

“China is  promoting very large-scale deployment of clean energy while doing little to curb energy demand growth. This means that it should be quite plausible for China to agree to the global tripling goal but the energy efficiency goal is harder to sign up to,” said Myllyvirta.

Professor Sun Yongping, deputy head of the Institute of State Government at Huazhong University of Science and Technology, says that the main route to reducing the energy intensity of China’s economy is improving the electrification rate (meaning the share of electricity in energy demand, relative to the share of direct fossil fuel burning). This, he says, requires an industrial transition, as coal power and other energy-intensive industries could still cause overall energy intensity to rise.

“Last year, the National Development and Reform Commission called for an electrification rate of 30 per cent, which is already very good, higher than some developed nations,” he said. “Developed parts of the east coast, like Jiangsu, Zhejiang and Shanghai, are already at almost 40 per cent, while central and western China are at 20 per cent. That reflects structural issues in the economy. A faster restructuring would bring the energy efficiency target within reach.”

Chinese business: big opportunities, smaller challenges

If the renewables target is to be achieved, business will need to play its part. At COP28, China Dialogue interviewed the world’s largest photovoltaic (PV) solar firm, LONGi. Founded in 2000, it now has manufacturing or sales operations in over 150 countries and has sold more solar modules than any other firm for the last three years running.

Huo Yan, LONGi’s global marketing head, said the tripling target could act as a spur to countries that had been slower to deploy renewables. For a country like China, already rapidly rolling out clean energy, it was a conservative goal, he added.

“IRENA reviewed international trends in renewable energy and found rapid growth, particularly in solar,” he said. “But over the last five years, we’ve seen some international organisations, including IRENA, make the same mistake when predicting future capacity: they underestimate.”

He told China Dialogue that the global solar market is booming. According to LONGi’s own figures, 38 countries installed 1 GW or more of new PV solar capacity this year.

And, according to data from LONGi and Jinko Solar (China’s second biggest solar firm), they alone have produced a total of 490 GW of solar silicon wafers in their histories, equivalent to almost half of overall installed capacity.

Currently, Chinese manufactures hold 97 per cent of the market for silicon wafers, and 80 per cent of all solar panels are supplied by China. Demand for solar modules is greatest in China, the EU and the US. Recently, the EU and US have moved to repatriate supply chains and put anti-dumping and anti-subsidy measures in place on Chinese solar power products. These include the EU’s Net Zero Industry Act, Critical Raw Materials Act, and a new Batteries Regulation; and the Inflation Reduction Act in the US.

“The EU and US don’t have the manufacturing capacity or the competitiveness. These measures are a huge barrier to solar deployment, and possibly the IRENA renewables capacity target,” said Pan Jiahua, member of the Chinese Academy of Social Sciences, and deputy chair of the National Expert Committee on Climate Change. “To remove those barriers, we need dialogues. At the same time, Chinese companies need to step up and commit and contribute to global targets.”

“Changes in market demand, regional policy barriers, being punished for breaking WTO rules – companies in many sectors face these kinds of challenges,” Huo Yan told China Dialogue. “If companies do well on environmental, social and corporate governance, and communicate to dispel misunderstandings and prejudice, then we will all be working in the same direction, with the same targets, to tackle climate change.”

China’s contribution: teaching people to fish

China’s rapid roll out of renewables has provided impetus to the global energy transition. Cecilia Springer, a senior fellow at Boston University’s Global Development Policy Center, thinks China has an important role to play as the world tries to achieve IRENA’s targets.

At the recent Third Belt and Road Forum, the country announced a number of new decisions, including the establishment of the Green Investment and Finance Partnership, “innovative blended finance”, and better support for renewables projects in their earliest stages, Springer said. She also noted a change in the language used, indicating a shift towards supporting smaller-scale and greener projects. “This all shows China will work hard to hit its existing targets, and give strong support to green and low-carbon development.”

“One big remaining question is if this support will emerge on the timeline needed to reach the 2030 RE capacity goal,” Springer added.

Pan Jiahua thinks China could act as a role model for the world by hitting that goal. He pointed out that China is a developing nation, with per-head GDP below the global average, and 600 million people having only around 1,000 yuan (US$140) in disposable income per month. If China can hit the target, so can other developing nations – not to mention developed ones.

“China has already got the cost of solar power down to under 0.10 yuan per kilowatt hour, something which will be of great help to both the EU and the US, not to mention the rest of the world, allowing them to triple renewables capacity at minimum cost,” said Pan.

Although China’s renewables tech has reduced the cost of installing generation capacity, Springer thinks the country could do more to transfer its experience to developing nations, helping them to build out their own manufacturing.

“Chinese solar manufacturers in other countries are mainly bringing down costs for end-users (like the US) rather than the developing countries where the manufacturing is occurring,” said Springer. “I think China could do much more to safeguard local benefits, train local workforces, and help build out solar installations in those countries,” she added.

This article was originally published on China Dialogue under a Creative Commons licence.

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