Climate Laboratory: “China is building coal-fired power plants that it will never need”

China is a contradiction. Last year, the People’s Republic put almost as many solar systems (216 gigawatts) into operation as the rest of the world combined and – to the anger of Western manufacturers – produced so many more that world market prices fell by 50 percent. At the same time, China has 2023 coal-fired power plants with a capacity of 47 GW put into operation, more than twice as many as in the rest of the world. The explanation for this contradiction? “No country thinks economy and climate together as well as China,” says Barbara Pongratz from the University of Bremen. However, the principle of China’s energy transition is security, explains the expert on Chinese environmental and climate policy in the “Climate Laboratory”. “First build, then destroy.”But not everything is going perfectly: many Chinese provinces have not yet internalized President Xi Jinping’s green approach, fear the end of their prosperity and know that they cannot rely on their neighbors if they do Energy becomes scarce.

ntv.de: Last year, China installed almost as many solar systems as the rest of the world combined. At the same time, twice as many coal-fired power plants as in the rest of the world were put into operation. Is China’s energy transition good or bad for the world?

Barbara Pongratz: That’s a mixed picture. China is making determined progress with the energy transition, but there is the aforementioned contradiction: a lot is being invested in renewable energies and a lot of capacity is being built for coal. This has always been the most important source of energy in all kinds of industries. The share of coal in the energy mix is ​​56 percent.

Still?

Still. China is home to more than half of the world’s coal-fired power capacity and more than half of the world’s planned new coal-fired power plants.

Because you can’t support a population of 1.4 billion people without coal?

As in Europe, it’s about energy security. China can rely on coal as an energy source and is not dependent on foreign countries like we were in 2022 when the Russian gas tap was turned off. It has long been an argument from Chinese experts: There are fewer gas reserves than coal, so we have to focus on them.

Is only Chinese coal consumed?

China also imports a lot. In addition to the pursuit of energy security, the internal energy market, which is still being built, and the political system are responsible for this: in the past, responsibility for energy supply lay at the provincial level. At the same time, there were certain efforts in the area of ​​climate goals. These are set by the Communist Party at the central level and then broken down to the provinces.

The provinces calculate their electricity consumption and someone in Beijing says: Then you need so and so many coal-fired power plants. This is how it works?

Since 2014, energy supply has been a matter for the provinces. The central government in Beijing recently took back control. Because the provinces acted like in a bubble because they knew: If energy is scarce, I can’t rely on my neighbors or other provinces. The Chinese power grids are too poorly developed for this and the energy system is inefficient. That was also the reason for that Power outages 2022. These, in turn, were one reason why China changed its energy strategy and expansion goals again: transferring responsibility for energy supply to the local level did not work.

There is no electricity market like in Europe, where electricity is imported from neighbors when it is scarce or exported when more is produced than is needed?

Correct. There are severe deficiencies in the electricity market. It can neither act efficiently nor comprehensively. Many provinces have planned very conservatively and have built and approved many new coal-fired power plants because, in extreme cases, you cannot rely on your neighbors.

Can we assume that the almost 60 percent share of coal in China’s energy mix will decrease in the next few years?

The coin has two sides: renewable capacities are being expanded significantly, but so is coal. Actually, two energy systems are currently being built because the grid and the energy market are not working. China wants to reach peak CO2 emissions by 2030 and reach CO2 neutrality by 2060. Until then, the energy mix will not be free of coal. This is what the new climate representative Liu Zhenmin recently said at the Boao Forum in Hainan, China, the Asian Davos: China wants to rely on fossil energy sources for even longer.

But from 2030 the energy mix will be a little cleaner?

After that, emissions should definitely fall. This is the principle that President Xi Jinping presented a few years ago when explaining China’s energy transition: first build, then destroy.

The opposite of Germany.

Yes, and concerned about security of supply.

Also different than in Germany…

Exactly. Only when the renewable energy system is built will the old one be destroyed. From 2030 onwards, less coal should be consumed. The question is whether emissions will decline immediately or whether a plateau will form. The aim is to achieve CO2 neutrality just 30 years later. This is the difference from Europe and the USA that China always brags about: We are much faster.

More quickly?

The EU and the USA reached their peak in the 1990s, and CO2 emissions have been falling since then. But we don’t want to be climate neutral until 2050, i.e. 60 years later. China has only been developing rapidly since the 80s and 90s, has only had increasing emissions since then and has not yet reached the peak. That should happen before 2030. And China often brags that it can do in 30 years what the United States and Europe take 60 years to do.

The argument that is often put forward: We are actually still a developing country and first have to get to where Germany and the USA have been for decades. That’s why we don’t have to reduce emissions yet.

Yes. In 1992, the treaty on the UN Framework Convention on Climate Change stated that there are developing countries and industrialized countries. But if you look at the relatively low per capita income and the enormous resources that China has, this is no longer true. That’s why China, as the world’s second largest economy, should come up with different calculations these days.

Can it be expected that China will achieve its goals and that emissions will actually fall from 2030 if coal is still being built on such a massive scale?

This can be assumed because the way China sets goals is also different than we do in Europe and the USA: China generally sets rather conservative goals and usually exceeds them. It’s also about trust in Xi Jinping. As head of state and general secretary of the Communist Party, he personally stands for compliance with long-term goals: At the top is usually that the legitimacy of the Communist Party is preserved. Then, of course, building up economic and technological strengths. Climate protection is also a goal that must be achieved – and will be achieved. China, for example, wants to build an enormous 1,200 gigawatts of renewable energy capacity by 2030. This goal will probably be achieved this year.

And how exactly does that work? In Germany there is a lot of discussion about things like network expansion and areas. This is probably different in a country like China?

There is no country in the world where economic development is so closely linked to climate protection. Electric cars, batteries and solar have been identified as the three new industries. Last year they were already responsible for 40 percent of the growth in gross domestic product (GDP).

Everything that is currently causing headaches for Europe and the USA.

Yes. We just saw this again at the National People’s Congress, which takes place every year in March: China thinks about the economy and the climate together and does it better than any other country. A side effect is the large excess capacity: in a phase of low domestic demand, the Chinese economy produces excessive capacity for the external market. This has an impact on global prices.

But what happens after China makes the solar panels: Where do you put them? How do you connect it to the power grid?

As I said, the first thing is to create a uniform and efficient energy market. Things aren’t going so well so far, the reforms are extremely delayed. The provinces, their economies and jobs are enormously dependent on the coal industry. China is building capacity it will never need.

The coal-fired power plants will not be used at all later?

There is a difference between capacities and consumption. Many coal-fired power plants are only used during peak times, when electricity consumption is particularly high. In summer, for example, when people turn on their air conditioning. That’s why the reforms for the unified energy market are so important. But this plan is set to last 15 years – comparatively long when you see how quickly other things are being done in China. The new capacities are actually evidence of a systemic problem: the provinces would shoot themselves in the foot and destroy their domestic economies if they phased out coal. In some industries, many jobs would be lost.

Similar to Germany, where coal was the dominant industry in Lausitz or the Ruhr area and with the exit, entire regions had to create new jobs and retrain people.

Yes, this goes back to the 80s and 90s. Since then, economic development has been the top priority in the provinces. It is still anchored in the minds of party officials and civil servants today: achieving economic growth is the top priority. This is often associated with a strong coal industry. The fact that sustainable goals are also important has only been taken into account since 2013, when Xi Jinping became the new head of state. Since then they have become more important. But that’s why these problems exist. This adjustment of the objectives for local officials will show whether China is really serious about the energy transition and how quickly it is progressing.

Clara Pfeffer and Christian Herrmann spoke to Barbara Pongratz. The conversation has been shortened and smoothed for better clarity. You can watch the entire conversation in the podcast “Climate Laboratory” listen.