China is investing spectacularly in green energy. But does the mill really replace coal?

This is a story about Chinese deserts. Over the remote, vast plains in the northern and western reaches of the country, such as the Kubuqi, the Taklamakan and the Badain Jaran. They are certainly not the center of power, but they are the site of a truly impressive development, which is taking place in relative silence and is important to the entire world.

To understand its scale, it’s helpful to remember that a gigawatt (GW) is the capacity to power roughly one million homes. Dutch wind farms in the North Sea currently have a capacity of approximately 4.7 GW. The aim is 21 GW by 2030. In the same year, the rich industrial countries that form the G7 want to jointly build an additional 150 GW of offshore wind turbines compared to 2023.

China is tackling it on a different scale. Last year it installed 76 GW of wind turbines in one year, mostly in the empty regions in the north and west. That is an expansion of 66 percent, and more than the total wind energy available in the United States.

In terms of solar energy, Chinese growth has been just as spectacular: one mega solar park after another is being built in the deserts of Inner Mongolia, Xinjiang and Gansu. In the rest of the country, roofs are being covered with solar panels. In 2023, more than 500 million solar panels will be added, amounting to 217 GW, an increase of 55 percent compared to 2022.

China has been the country with the largest renewable energy capacity for years. Last year it expanded that lead in an “extraordinary” way, according to the International Energy Agency (IEA), to a total capacity of more than 1,400 GW. By comparison, the US follows far behind, with 387 GW.

Hyper focus on renewable

In 2020, President Xi kicked off this hyperfocus on ‘renewable’ when he decided that China must reduce its greenhouse gas emissions by 2030 and be climate neutral by 2060. That was the signal for provincial governments and (state) companies throughout the country to make enormous investments in green technology, including in the production of electric cars and batteries. About 40 percent of cars in China are now electric or hybrid, compared to 14 percent in the Netherlands.

Green technology was the most important factor in the growth of the Chinese economy last year. The expansion will continue this year, partly due to a large increase in hydroelectric power stations. And for those who want to take nuclear energy into account: the number of reactors in China will more than double in the coming years. Nearly half of all reactors built worldwide are in China.

Developments are now happening so quickly that the IEA expects the emissions peak as early as this year, six years earlier than planned. It is not certain, because factors such as the weather and industrial activity also have an influence. But the Finnish research institute CREA also predicts the peak this year, because the growth in renewable capacity will exceed the growth in electricity use for the first time.

Yet Nis Grünberg, chief analyst at China think tank Merics in Berlin, will not be very impressed if the emissions peak does indeed come much earlier. “First of all, you should always take Chinese government statistics with a grain of salt. But when Xi set this deadline, he must have known that China can easily meet it,” he said by telephone. “Not only does China have the capacity to build an insane amount of renewable energy, it can also build a large amount efficiency– make progress in the use of existing power stations and in better network management.”

A bit of black-eye is appropriate at this point in the story. Because no matter how nice it sounds, and regardless of the question of how local communities, nature and the environment are recognized in the building drive: China’s climate goals – even if they are achieved years earlier – are largely insufficient to keep the planet warming below 1.5 degrees. To achieve this, China’s emissions would have to decrease over the next six years by the same amount as they increased over the past 20 years.

The most important question is therefore not how the renewable sector will develop, but rather what will happen with fossil energy. After all, China is a champion in both: the most renewable energy and the largest emissions for years, 70 percent of which come from coal. China uses more coal than the rest of the world combined.

And despite statements by Xi that the role of coal-fired power stations will mainly be limited to a reserve for times when there is insufficient sun, wind or hydropower, there is still no brake on the construction of new coal plants. Last year, 114 GW of new power stations were approved. Only a fraction of this is to replace old, dirtier installations. Everything else is extra.

How can that be reconciled with China’s climate goals? It looks like Xi’s 2030 deadline has triggered two waves of investment: one in solar and wind, and one in coal, while it still can, a last-round effect.

Studying Xi’s speeches

According to Grünberg, that is one explanation, but the main factor here is that local authorities receive so many orders from Beijing – often contradictory – that they do not know exactly what is expected of them. “They will then study Xi’s speeches to decide what has priority. They currently estimate that climate is important, but that innovation, industrial development and self-sufficiency are even more important.” In practice, this means that they do not dare to give up fossil energy.

Grünberg sees another cause in the way the government deals with companies. “The European Union is forcing companies to reduce their emissions with regulations. That works, but the disadvantage is that some companies leave. China uses the carrot much more than the stick: it encourages companies [bijvoorbeeld met subsidies] to invest in green energy, but does not stop them from building coal-fired power stations.”

It is therefore unknown what will happen after the peak: will emissions decline in a straight line, will they remain more or less the same or will they rise again? Depending on this, it will only become clear whether all that green technology really brings about a revolution.

If it succeeds, China will not hesitate to present it as a victory over the West, Grünberg thinks. Climate politics is increasingly also an international test of strength. “China will say: See, our method works and it is better than yours. If we had wanted to, we could have gone much faster.”