Webinar: Charting China’s Power Sector Coal Decarbonization
Recorded Video
Remarks
Thank you, Jessica, for the nice introduction.
Let me start by congratulating Dr. Cui and the team for the release of such an important and timely report. I want to echo what Prof. Yuan has just shown about the implications of China’s coal transition. The report lays down groundbreaking work to identify low-hanging fruit in coal plant retirements and shows a feasible strategy to phase down coal power in China.
I hope to add a few comments focusing on renewables. You may be curious: this is a coal phase-down event, so why am I talking about renewables? Here is the thing: it’s good to phase down coal, but then where will our electricity come from? The answer is non-fossil sources, especially renewables. My rationale is that the more we can provide stable and secure renewable supply, the less we will rely on coal, and the better chance we have to successfully phase down coal.
First, China’s clean power transition needs two accelerations at the same time. While accelerating the phase-down of coal, we will need to accelerate renewable development and integration. Renewables will need to first meet all new demand and then replace coal. Let’s be real: coal generation is still growing, but the good news is the share of renewables is growing too. In 2021, coal accounts for about 62% of total generation, hydro about 16%, nuclear 5%, wind 8%, and solar 4%. Renewables (hydro, wind, and solar) overtook coal in new capacity in 2013, and renewables combined exceeded 50% of new capacity in 2016; in 2021, 78% of new capacity was renewables. According to the latest data from the National Energy Administration, by the end of 2021, the country’s installed wind and solar capacity both exceeded 300 GW: wind 328 GW and solar 306 GW. To achieve the carbon neutrality goal, we need 10x today’s solar and wind capacity by mid-century; that’s the scale of acceleration we are talking about.
Second, cheap renewables are a game changer: a renewable-dominant path is not just technically feasible but also cost-effective, with water savings and other co-benefits. This chart from Our World in Data shows that from 2009 to 2019 the cost of PV fell by 90 percent, onshore wind by 70%, and concentrated solar by 16%. The learning rate reaches 36% for PV and 23% for onshore wind, meaning that for every doubling of cumulative installed capacity, the cost of PV fell 36% and onshore wind 23%. 2021 can be described as the tipping point of grid parity, or what we call the “low-cost renewable era”. In China, the National Development and Reform Commission canceled the subsidized tariff for new central PV and onshore wind projects, a milestone for renewables. The arrival of grid parity, relative to the 2000 forecast, was about 50 years ahead of time; relative to the 2010 forecast, about 30 years ahead of time; relative to the 2015 forecast, about 10 years ahead of time. The early arrival of grid parity accelerates the development of renewable energy and opens new possibilities for achieving carbon neutrality to confront climate change.
In a collaborative Nature Communications paper with Lawrence Berkeley National Laboratory, we found that if the current trend of declining renewables costs continues, by 2030, wind and solar could provide 39% of electricity generation, together with hydro (14%) and nuclear (10%), the share of non-fossil electricity could be 62%, compared to 50% commonly discussed. What’s more, it will be 11% cheaper than in the reference scenario. Wind and solar together could exceed 1800GW of capacity, compared to the 1200GW national goal. In another collaborative paper with Tongji University, we find cheap renewables reduces the need for carbon capture and storage by 80% in 2050 and saves water consumption for cooling by 10 billion cubic meters annually compared with the reference scenario.
Third, coal could play a facilitator’s role in integrating renewables; coal needs to reposition or repurpose itself from cornerstone to stepstone in the clean power transition. Flexibility retrofitting and converting coal plants to reserve capacity could help address the flexibility challenges in a renewable-dominant grid, even though coal flexibility’s contribution to renewable integration is marginal compared to building a national electricity market and dispersed renewable investments, according to a collaborative paper with LBL published in iScience.
In summary, accelerating coal transition and renewable development need to go hand in hand, and renewables achieving grid parity not only make this technically feasible but also economically effective, and coal could reposition and repurpose itself from footstone to stepstone in the clean power transition.