By Paul Davies and Andrew Westgate

China has made notable strides to transition towards a lower-carbon economy. Most recently, local authorities were ordered to halt construction of coal-fired power plants in 13 provinces where capacity already outstrips demand. Demonstrable of its efforts to end reliance on coal and invest in green alternatives, China is ramping up efforts to increase renewable energy use.

China is rapidly emerging as a renewable energy leader and has committed significant investment to achieve a low-carbon future:

  • China invested US$110.5 billion in clean energy in 2015 – a 17 percent increase on the previous year, and nearly double the USA’s investment of US$56 billion.
  • China’s capacity for solar power has grown 169-fold and its wind power capacity has quadrupled in five years.
  • The total share of non-fossil fuels in energy consumption increased to 12 percent in 2015, putting China on track to meet its Paris pledge of 20 percent by 2030.

Whilst encouraging, these figures mask a common challenge faced by all countries seeking to diversify energy resources – renewables capacity going unused. For example, nearly 10 percent of China’s solar capacity remained untapped during Q1 and Q2 of 2015, and 15 percent of wind power remained unused across the year. Daiwa Capital Markets analysts forecast this figure could rise to 18 – 20 percent in 2016. This problem is also common in Europe and referred to as “curtailment”, which typically occurs because the market is structured to source energy from fossil fuels. Consequently, the market must evolve to achieve a fuller transition to renewables.

By Paul Davies and Andrew Westgate

China’s National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have ordered local authorities to stop construction of coal-fired power plants in 13 provinces where capacity already outstrips demand. A further 15 provinces will be required to delay construction of previously approved coal-fired power plants. These provinces include Shanxi and Inner Mongolia, home to much of China’s coal industry.

These orders reinforce China’s efforts to transition towards a lower-carbon economy – an economy no longer heavily dependent on coal power.