Energy Insider: Beijing Sets Target for National Renewables Use, Electricity Demand Grows ‘Significantly Faster’ Than GDP

In the recent Caixin energy wrap, several significant developments in China's climate and energy policy are highlighted. These include the establishment of a national target for renewables, an increase in Shanghai's green electricity certificate trades, and the realization that China's electricity demand is growing faster than its GDP. The central government has also set carbon accounting goals, and China has become a leader in overseas cleantech investments.[para. 1]

In a bid to enhance renewable energy consumption and reduce carbon emissions, China's central government has outlined plans to escalate the adoption of renewables. Guidelines issued by six governmental bodies aim to increase renewable energy consumption to the equivalent of at least 1.1 billion tons of standard coal by 2025, and 1.5 billion tons by 2030. The policy aims to integrate renewable energy into various industries, promoting innovative technologies like vehicle-to-grid charging. This action plan signifies China's commitment to transitioning its energy sources from fossil fuels to renewables, covering a broad spectrum of sustainable energies.[para. 2]

Shanghai has witnessed a significant surge in the sale of green electricity certificates (GECs). Over 20 million of these certificates have been sold in the city this year, which is a vast increase compared to 2023's total. China Huadian Corp., a key state-run power generator, has begun supplying GECs in Shanghai, showcasing a growing support for renewable power demands, like those for the upcoming China International Import Expo. Nationwide, the issuance of GECs has skyrocketed, with significant contributions from hydropower, wind, and solar energy.[para. 3][para. 4]

The demand for electricity in China has outpaced its economic growth, with a 7.9% increase in electricity consumption over the first three quarters of 2024 compared to a 4.8% GDP growth. This rise is attributed to a hot summer, increased electrification, and the expansion of industries like artificial intelligence and electric vehicles. Despite significant growth in renewable energy capacities, the demand continues to stretch the country's resources, complicating efforts to move away from coal. From 2020 to 2023, China's wind and solar power generation skyrocketed, but electricity demand increased even more, suggesting an ongoing reliance on coal-powered resources.[para. 5][para. 6]

China is advancing a carbon-accounting system to better manage its emission reduction, shifting from energy consumption and intensity control to carbon emission and intensity control. By the end of the following year, carbon reporting standards will be instituted at both national and provincial levels, aiming for a comprehensive system by 2030. This shift is crucial for international trade as countries adopt carbon-pricing mechanisms.[para. 7]

In terms of global positioning, China is leading the charge in overseas cleantech investments, investing significantly more than both the U.S. and EU combined. From the beginning of 2023 to September, Chinese companies committed over $100 billion in foreign investments, focusing on developing manufacturing infrastructure abroad to mitigate potential tariff impacts.[para. 8]

Lastly, wind and solar energy accounted for 80% of China's new power installations this year. Of 240 gigawatts installed, 200 gigawatts were wind and solar, with estimates suggesting total installations for the year could reach 330 gigawatts. While renewables are expanding swiftly, this surge poses challenges for local power grids in absorbing the increased capacity, highlighting potential issues in energy distribution.[para. 9][para. 10]