China’s clean energy outpaced electricity demand growth in May, pushing coal-fired power to new lows | News

Myllyvirta said that these numbers published by China Last month, the Office for National Statistics – in a widely reported move – excluded roof-mounted solar panels, among other things, which resulted in around half of the electricity generated by solar power being missed.

So-called “utilization” data for wind and solar power, which tracks actual power output relative to maximum potential, was also not included in the latest monthly update, despite being included in previous data releases.

The omission prompted media speculation that China’s record wind and solar installations last year may not have reached expected results in May due to grid constraints. – the view that Myllyvirta’s analysis disproved this theory.

“First, the reports confused utilization rates and curtailment rates (the extent to which electricity production is deliberately reduced below actual capacity to prevent grid congestion), which are reported separately. The articles claimed that the reason the National Energy Agency (NEA) did not publish utilization data was because curtailment rates increased dramatically,” Myllyvirta said.

“However, the restrictions data was released promptly, showing a small increase in restrictions, although not large enough to significantly impact overall usage, given normal month-to-month variability.”

Instead, his analysis of May electricity usage data released by industry association China Electric Council (CEC) showed that that year-on-year use increased by 3 percentage points for solar power and by 10 percentage points for hydropower. However, wind power use fell last year, which Myllyvirta attributes to “monthly fluctuations in wind conditions.”

Meanwhile, the average use of energy from gas and coal fell by 6.3 percentage points and 3.3 percentage points, That’s despite China’s recent coal craze, which has seen an average of two new coal-fired power plant permits issued every week in 2022 and 218 gigawatts (GW) of new coal-fired capacity approved over the past two years.

Myllyvirta estimated that the recent decline in fossil fuel power generation has led to a 3.6% drop in carbon dioxide emissions from the power sector, which accounts for almost half of China’s total greenhouse gas emissions and is the largest driver of the country’s emissions growth in recent years.

The reversal in emissions trends in the sector suggests the country’s emissions may have peaked last year, Myllyvirta said.

“If the current rapid expansion of wind and solar power continues, China’s carbon dioxide emissions will likely continue to decline, making 2023 the country’s peak emissions year, he said.

A wave of positive climate assessments

Several reports released in the past week suggest China is on track to meet its climate goals.

ON same day Myllyvirta withdrew his analysis and research American NGO Global Energy Monitor (GEM) revealed that China is home to almost two-thirds of all new wind and solar power plants being built worldwide.

While the country has not signed up to the COP28 commitment to tripling renewable energy capacity by 2030, GEM said the target is “achievable” even without increasing hydropower capacity, given the pace of clean energy deployment in China.

A separate study released Thursday by the Helsinki-based nonprofit Energy and Clean Air Research Center, which Myllyvirta co-founded in 2019, found that China will stop allowing new coal-based steel projects in the first half of 2024 — the first time the country has done so since announcing “dual carbon” goals in 2020 to peak emissions by 2030 and achieve carbon neutrality by 2060.

The entire 7.1 million tonnes of annual permitted steel production capacity was for lower-carbon arc furnace designs, “which could mark a turning point for China’s steel industry in terms of halting new investment in carbon-based steelmaking,” the report said.

The steel industry is the second largest emitter of greenhouse gases in China after the power sector, due to its heavy reliance on coal.

Last week, Sydney-based think tank Climate Energy Finance also released a report saying China is on track to meet its 2030 target of installing 1,200GW of wind and solar power this month, six years ahead of schedule.

Reforms of China’s energy system underway

Myllyvirta previously wrote in a LinkedIn post that China’s power outages are not due to the variability of solar and wind power — as they have proven more than capable of meeting the country’s growing energy needs — but to the grid’s lack of flexibility, which prevents the country from responding effectively to spikes in demand.

“The reason there is a need to build new coal-fired power plants is because of the outdated way in which China’s power grid is run, which means that existing capacity is not used efficiently to respond to demand,” he said.

For example, a province struggling with an electricity shortage may be forced to export electricity rather than use freed-up transmission capacity to import power to meet demand.

China has launched some power system reforms to ease grid bottlenecks while reducing reliance on coal. In May, Beijing set a new goal of increasing battery storage capacity to 40 GW by 2025, up from a previous target of 30 GW. It also aims to build more than 200 pumped-storage plants with a total capacity of 270 GW in the same period.

In March, Bloomberg reported that China’s largest utility company had begun construction on a $3.9 billion transmission and storage project – which includes a transmission line spanning more than 1,000 kilometers that will transmit wind and solar energy across three provinces, as well as a pumped-storage power plant – to integrate the growing amount of renewable energy in the country.

The government also recently relaxed limits to allow for a 10% reduction in clean energy use (previously 5%), which will enable more renewables to be introduced even in energy-rich areas where the grid would otherwise be considered congested.

“The thinking behind this change is that China aims to build a power grid by 2027 that can handle greater penetration of solar and wind power. Easing the cap can be seen as a bridging measure,” Myllyvirta said.

“This change will increase uncertainty for investors in wind and solar projects, but … in most cases, the project economics are strong enough to withstand this uncertainty, and this change will, on net terms, support capacity and generation growth.”