China can lead the world in achieving net zero emissions – pv magazine International

July 5, 2024 pv magazine

From the 24.06. print issue of pv magazine.

China currently finds itself in a transitional space in terms of its energy profile. It is by far the largest global consumer of coal, with more than 50% of global consumption, but it is also by far the leading installer of renewable energy capacity. This paradox currently leaves China behind its affluent Western counterparts in terms of the share of renewable energy in its primary energy consumption—energy that is directly available, such as coal, oil, solar and wind. That will change as renewables are poised to replace coal en masse over the next three decades. This will help propel China to the top of the regions in terms of the share of non-fossil fuels in its energy mix.

China’s central government sets the direction and goals of energy policy and has the authority to ensure the party line is maintained, but relies heavily on lower levels of government and local officials for implementation. Government stability likely removes some uncertainty from a forecasting perspective. However, some uncertainty remains about the effectiveness of the state’s future investment strategy as it shifts from spending on real estate and infrastructure toward support for higher value-added manufacturing and consumption-led growth in consumer goods and services.

Energy independence

Energy security is a key driver of China’s energy transformation, but DNV believes it will only be partially achieved. Combining national energy security with social and economic imperatives, China is pursuing energy autonomy by conserving energy, switching sources and strengthening domestic energy capacity. The power sector is leading the way, replacing coal with domestic renewables. However, dependence on oil and gas imports will persist into 2050 and beyond. Accelerating the transition to net zero emissions by 2050 with a greater focus on domestic renewables will further enhance energy independence.

China’s energy consumption is set to peak in 2030, before a significant reduction of 20% by 2050 as a result of electrification and efficiency initiatives. This decline will also be directly related to demographic changes, including a projected population decline of 100 million people by mid-century. Of the 10 world regions in DNV’s forecast, China currently ranks sixth in demand electrification, but is projected to move up to second place, with electricity accounting for 47% of final energy demand by 2050, overtaking Europe and North America and second only to the Pacific region of the Organisation for Economic Co-operation and Development. Improving energy efficiency is an important part of China’s energy policy, and the targeted reduction in energy intensity – the ratio of energy supply to GDP – is clear: a 33% reduction to three megajoules (MJ) per dollar is foreseen by 2035, followed by a further reduction to 2.2 MJ/$ by 2050. Regulatory frameworks such as the Energy Saving Law and the Renewable Energy Law reinforce these efforts. Sectoral analyses reveal significant efficiency gains in buildings, where efficiency is expected to more than double by 2050. The manufacturing sector shows gradual gains, and the transport sector is forecast to modestly increase to 75% efficiency by 2050.

Solar and wind energy

Already a leader in renewables, China is on track to more than fivefold increase its renewable energy installations by 2050 (see chart above). The share of renewables in China’s total electricity generation will rise from 30% today to 55% by 2035 and 88% by 2050. By mid-century, solar and wind will each generate about 38% of electricity. For solar, more than a third of installed capacity will be combined with storage, mostly batteries. For wind, 77% of the power will be supplied by land-based installations, 20% by fixed offshore installations, and 3% by floating offshore structures. Continued cost reductions, driven by learning effects, will be the main driver of the projected growth in solar and wind. Of the other non-fossil fuel sources, nuclear capacity will double in absolute terms but remain small in relative terms, accounting for just 5% of energy in 2050. Capitalizing on cost reductions and sustained global exports, China is poised to help the rest of the world meet renewable energy targets by exporting solar panels and, most likely, wind turbines to most parts of the world.

Emission reduction

In 2022, China emitted about 12 gigatonnes (Gt) of CO₂33% of global CO2 is related to energy and processes₂ emissions. DNV believes that the reductions are consistent with China’s twin carbon emissions goals of peaking by 2030 and achieving carbon neutrality by 2060. DNV forecasts that China’s emissions will peak by 2026, followed by a 30% reduction by 2040. The share of emissions will fall to 22% of total global emissions by 2050. However, our outlook suggests a reduction in the carbon intensity of the global energy system (per unit of GDP) of only 59%, while China aims to reduce the carbon intensity to 65% of 2005 levels by 2030.

Popular content

Given China’s significant contribution to global emissions, the timing and depth of China’s emission reductions are of great global importance. If China were to follow a net-zero emissions pathway by 2050 (described in a separate DNV publication, “The pathway to net-zero emissions”), our calculations show that this could result in cumulative emissions of 113 Gt CO₂ less than our headline forecast, significantly contributing to global efforts to achieve net zero emissions by 2050.