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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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The High Price Of Energy Security: China’s Love-Hate Relationship With Coal

  • China is the leader in clean energy spending, but its reliance on coal-fired power remains a significant threat to energy security.
  • Despite massive investments in renewable energy, China's addiction to coal hinders progress toward global emissions goals.
  • The paradox of China's clean energy boom and coal-fired power surge raises questions about the country's ability to balance its commitment to clean energy with its reliance on coal.
Coal

China’s massive clean energy boom has unfolded in tandem with a major uptick in coal-fired power, proving onceagain that the country’s leading role in clean energy spending is all about energy security rather than a commitment to cleaning up its carbon footprint. 

China has the second biggest economy in the world after the United States, but it is the world’s single largest greenhouse gas emitter. This means that China could make or break the world’s ability to meet global climate goals and emissions targets. Whether or not this will happen will heavily depend on two broad developments in the Chinese energy sector: ramping up renewable energy production capacity and decreasing the country’s heavy reliance on fossil fuels, and especially coal-fired power. China is knocking that first imperative – clean energy spending – out of the park. The second one – kicking coal – has proven to be comparatively rather low on President Xi Jinping’s agenda. 

This duality is pronounced: China is at once the undisputed leader of the clean energy revolution and the world’s largest burner of coal. According to a recent BloombergNEF analysis, China was responsible for nearly half of global spending in the renewable energy sector last year, clocking in at a whopping $546 billion. That’s three times more than the second-highest spending bloc, which was the European Union at $180 billion, and nearly four times the $141 billion spent by the United States. Together, China, the U.S., and the EU were responsible for more than 80% of global clean energy spending for the year, according to the WEF 2022 Fostering Effective Energy Transition report

But at the same time that China was smashing green spending records and making “staggering progress on renewables,” Beijing greenlit 106 gigawatts of new coal-fired energy capacity – a fourfold increase from 2021. 106 gigawatts is the equivalent of 100 large-fired power plants according to reporting from CNBC. It’s clear that all of China’s energy spending isn’t discriminatory; they’re trying to build up any kind of energy capacity that they can, as fast as they can.

China’s most recent push to shore up energy independence comes on the heels of a year of extreme energy insecurity. A severe drought in Sichuan Province took a massive bite out of the country’s hydropower sector. As water levels dried up to half their normal quantities, energy scarcity spread rapidly throughout the region. Historically, China has been heavily dependent on hydro; in 2020, nearly a fifth of the country’s installed energy production capacity was hydroelectric, and in Sichuan hydro represented nearly two thirds of the energy mix. As temperature fluctuations grow more frequent and more intense with climate change, hydropower is becoming more and more variable, posing a considerable threat to energy security. The result was a massive increase in China’s already considerable coal spending to make up for the lost hydropower – a trend that continues to shape China’s energy policy in 2023. 

In fact, China has not only invested heavily in ramping up its own domestic coal production, it has also been importing coal in enormous quantities to build up its stockpile. In the first two months of this year, China’s coal imports increased by a whopping 71% compared to the year before, when coal demand was unusually low thanks to the country’s economy-killing Zero Covid Policy. This development is proof that old habits die hard, and for China, security and reliability remain synonymous with coal. Coal has been the stalwart foundation of China’s economic development for generations

Yes, the country is now making a heroic effort to diversify its portfolio, but the beginning of this year has made it abundantly  clear that the more things change, the more they stay the same. As much as Beijing wants to place itself at the vanguard of the global clean energy transition, it just can’t sever its ties with coal, which are so deep-seated that they are as ideological as they are economical.

By Haley Zaremba for Oilprice.com

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  • Mamdouh Salameh on March 12 2023 said:
    Energy security is quintessential for Chinathe world’s largest economy based on purchasing power parity (PPP). Therefore, it will use all energy resources to ensure its energy security and the needs of its economy.
    Moreover, for countries with large coal reserves like China, Russia, India, the United States and Germany, it is also a very important economic source for the regions where the reserves are mined and above all a cheap energy source. So they aren’t going to keep their reserves underground when there is a need for them exactly as Germany and the EU did by resurrecting a multitude of coal-fired electricity generation plants.
    The fact that China is the world’s undisputed leader of the clean energy revolution shows how much it cares about combatting greenhouse emissions but being the world’s largest burner of coal signifies that energy security and the needs of its economy take precedence over the dictates of climate change.
    Finally, China and not the United States is the world’s largest economy based on PPP. In fact, China’s economy is 32% bigger than the United States’.
    Still the author of this article insists deliberately on claiming the opposite. If it isn’t deliberate, then she lacks understanding of the difference between GDP (nominal) and GDP (PPP). Let me then enlighten her.
    The key difference between GDP nominal and GDP PPP is that GDP nominal is GDP unadjusted for the effects of inflation and is at current market prices whereas GDP PPP is GDP converted to US dollars using purchasing power parity rates adjusted for inflation.
    This means that GDP PPP is far more accurate and more credible that GDP nominal. It also means that with inflation of 7%-8% in the United States, US GDP nominal will show false growth reading and the only way of correcting this anomaly is by basing GDP on the PPP measure.
    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • Mamdouh Salameh on March 12 2023 said:
    Energy security is quintessential for China, the world’s largest economy based on purchasing power parity (PPP). Therefore, it will use all energy resources to ensure its energy security and the needs of its economy.

    Moreover, for countries with large coal reserves like China, Russia, India, the United States and Germany, it is also a very important economic source for the regions where the reserves are mined and above all a cheap energy source. So they aren’t going to keep their reserves underground when there is a need for them exactly as Germany and the EU did by resurrecting a multitude of coal-fired electricity generation plants.

    The fact that China is the world’s undisputed leader of the clean energy revolution shows how much it cares about combatting greenhouse emissions but being the world’s largest burner of coal signifies that energy security and the needs of its economy take precedence over the dictates of climate change.

    Finally, China and not the United States is the world’s largest economy based on PPP. In fact, China’s economy is 32% bigger than the United States’.

    Still the author of this article insists deliberately on claiming the opposite. If it isn’t deliberate, then she lacks understanding of the difference between GDP (nominal) and GDP (PPP). Let me then enlighten her.

    The key difference between GDP nominal and GDP PPP is that GDP nominal is GDP unadjusted for the effects of inflation and is at current market prices whereas GDP PPP is GDP converted to US dollars using purchasing power parity rates adjusted for inflation.

    This means that GDP PPP is far more accurate and more credible that GDP nominal. It also means that with inflation of 7%-8% in the United States, US GDP nominal will show false growth reading and the only way of correcting this anomaly is by basing GDP on the PPP measure.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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