Renewable energy will meet over 70 per cent of China’s additional electricity demand in the next three years as coal’s role in powering the world’s second largest economy continues to decline, according to the International Energy Agency (IEA)’s latest projection.
Additional demand refers to any increase from today’s level.
Even as state subsidies are being phased out, the rapid growth of onshore wind and solar farm installations is expected to continue, with their combined generating capacity surging 75 per cent to 930 gigawatts by 2024 from 530GW in 2020, it projected, according to a report by SCMP.
Renewable energy expansion is the mainstay of China’s strategy to gradually decarbonise its coal-dominated electricity supply, as it aims for peak coal consumption by 2025 and peak carbon dioxide emissions by 2030 to help fight global warming and climate change.
“By 2024, we expect the share of coal in the [nation’s electricity supply] mix to decline to 59 per cent,” said the Paris-based intergovernmental organisation in the latest edition of its “Electricity Market Report” published on Friday.
“Renewable energy sources are set to meet over 70 per cent of additional demand during 2022-2024, while coal meets 25 per cent of the increment.”
In 2021, coal made up 64 per cent of China’s power generation, followed by hydropower with a share of 16 per cent, wind at 7 per cent and nuclear at 5 per cent, it noted.
The nation has been criticised by some climate and environmental campaigners for not doing enough to stop the growth of its fleet of coal-fired power plants, which makes up half the world’s total by capacity, even as it has shut some inefficient ones.
Analysts pointed out that the pace of energy transition needs to be balanced with the requirements for growth and reliability of the energy supply.
“A successful electricity transition requires the deployment of clean electricity to first meet incremental demand for electricity, and then replace coal and other fossil fuels in meeting the existing demand for electricity,” said Muyi Yang, the Sydney-based senior Asia electricity policy analyst at climate and energy think tank Ember.
“Instead of considering more aggressive actions towards electricity decarbonisation, China should consider how to find the right balance between ‘stability’ and ‘change’. This is critical to ensure the decarbonisation process progresses in a timely and orderly manner.”
The contribution of coal and other fossil fuels in meeting China’s incremental electricity demand has fallen from around 80 per cent in the first decade of this century to 52 per cent in 2010-2015 and 46 per cent in 2015-2020, he noted.
“The IEA’s projection of 30 per cent of incremental demand for electricity met by fossil fuels over 2021-24 is a continuation of [this] trend,” he said. “It is very likely that this declining trend will continue, if not accelerate, in 2026-2030.”
As part of efforts to boost the power grid’s capacity to absorb intermittent renewable power while ensuring the its stability, Beijing announced in July an ambitious target to install more than 30GW of new non-hydro energy storage capacity between 2021 and 2025.
The capacity of pumped-storage hydropower will rise from 31.5GW at the end of 2020 to over 62GW by 2025 and 120GW by 2030.
Meanwhile, the IEA has projected that China’s power demand growth will slow to a compound average of 4.5 per cent between this year and 2024, citing slower economic growth and gains in energy efficiency.
Last year’s power consumption grew 10.3 per cent, the National Energy Administration said on Monday. The average over the past two years – when demand was affected by the Covid-19 pandemic – was 7.1 per cent.
Global electricity demand is projected by the IEA to grow at an average rate of 2.7 per cent in the next three years, with renewables meeting 90 per cent of the demand growth.