Author Archives: David Solomon

China’s Impressive Clean Energy Progress Confronted by Emerging Challenges

Severe pollution levels in China are complemented by the rapidly growing presence of renewable energy infrastructure

Severe pollution levels in China are complemented by the rapidly growing presence of renewable energy infrastructure

The energy landscape in China is evolving rapidly. Dire environmental conditions throughout the country are complemented by the growing presence of renewable and efficient energy systems. This trend offers the vivid juxtaposition of a nation desperate to overcome its troubling present development stage through forward-thinking sustainable planning. The world’s second largest economy has also earned the status of the world’s worst polluter. Facing surmounting challenges, China seeks to revise its environmental trajectory, determined to smoothly and successfully transition from an overdependence on fossil fuels—particularly coal—to an embrace of clean energy.

Ambitious energy production and carbon reduction targetsoutlined in the recently released 13th Five-Year Plan indicate China’s serious desire to achieve a practical path to sustainability. With these goals in mind, the PRC government seeks to incorporate energy efficient technologies and investments into forthcoming urban development—an effort to withstand a slowing economy through innovative and sustainable systems that provide power for the masses at a reduced cost.

Beijing’s evolving reform of the Chinese economy intends for energy demands to sharply decline over the coming 20 years. This includes a concerted effort to significantly reduce dependence on coal—curtailing coal consumption to 0.2 percent annually during that period, following two decades of 12 percent annual demand growth. These plans vary by locality, as Eastern Chinese economic zones such as Beijing-Tianjin-Hebei (JingJinJi), Yangtze River Delta, and Pearl River Delta target major cuts, while lesser-developed regions in Central and Western China seek to control demand and accommodate gradual urban growth.

China’s NDRC and NEA recently announced the government has postponed construction of new coal-fired plants, while halting approval for new plants

China’s NDRC and NEA recently announced the government has postponed construction of new coal-fired plants, while halting approval for new plants

The government has demonstrated its commitment to these goals, as the National Development and Reform Commission (NDRC) and National Energy Administration (NEA) announced recently that China has halted plans for new coal-fired plants and postponed the construction of about 200 planned generatorsthroughout the country—forgoing roughly 105 gigawatts of environmentally unfriendly power production. This type of trend, though increasingly common in the US as a result of the Obama Administration Clean Power Program, is very new for China. The measures would suggest that Beijing has begun to take more thoughtful action around addressing the country’s egregious environmental situation—degradation that has had far-reaching global climate implications.

Meanwhile, China’s surging emphasis on clean energy offers accelerated natural gas production and imports, and will increase hydropower capacity by 60 million kilowatts. Nuclear power plants are under construction up and down China’s coasts, which will provide 30 million kilowatts in total capacity. China’s total wind power generation is expected to triple to 495 gigawatts of installed power capacity by 2030, compared to only 149 gigawatts in 2015. Already the world leader in solar capacity production, China added 15 gigawatts of new photovoltaic capacity in 2015.

China has also risen as a world leader in new energy vehicles, accounting for 40 percent of global sales in 2015

China has also risen as a world leader in new energy vehicles, accounting for 40 percent of global sales in 2015

Renewables, however, are only part of China’s growing efforts to incorporate efficient technologies into the broader national energy landscape. China has recently established itself as a world leader in new energy vehicles, as 2015 electric car sales reached 330,000—40 percent of the global total. Sales figures for the first quarter of 2016 are already double that of the year before, suggesting a continued surge in this trend. Seeking to reach five million electric vehicles by 2020, China’s local brands have invested nearly $6 billion over the past five years. During this period, manufacturers will strive to improve car battery durability and affordability, while increasing the number of charging stations, in a push to make new energy vehicles more accessible and desirable to the masses.

In addition to new electric vehicles, China is making strides in a variety of other clean energy technologies. A recent United Nations Environment Program (UNEP) report noted that China had built 10.5 billion square meters of energy saving buildings in urban areas through 2014. Last year, China began to require that at least 50 percent of new real estate projects comply with energy efficiency standards. Beijing, Shanghai, Tianjin, and Chongqing and other east coast provinces are promoting newly introduced green building standards, which focus on lighting, air conditioning, water heating, and other appliances—part of China’s broader eco-cities initiative.

China has shown strong interest in CCS technology development, as it tackles its vast pollution problems

China has shown strong interest in CCS technology development, as it tackles its vast pollution problems

Preparing for a 70 percent rate of urbanization by 2030, which will add 350 million people to the nationwide urban population, China outlined a wide range of infrastructure upgrades to public utilities, smart grids, smart transport, smart water supplies, smart land administration, and smart logistics in the 13th Five-Year Plan. This includes smart city-focused investments that exceed the $260 billion offered for these initiatives by the 12th Five-Year Plan. The Chinese smart grid market is expected to grow at a rate of 20 percent between now and 2020, the result of significant government investment. This includes plans announced in 2015 for $31 billion-worth of smart grid infrastructure in Xinjiang.

China has also shown leadership with carbon capture and storage (CCS) technology, which acquires carbon dioxide emissions from sources such as fossil fuel power plants and other large industrial plants, and stores this carbon underground. In many cases, these carbon dioxide emissions can be converted and then used to enhance production of oil and natural gas. With a wide range of projects underway, China has risen to number two in the world for CCS technologies. Many believe that China will be the location for the major CCS projects of the future.

China’s impressive efforts to assimilate renewables and other cutting edge efficient technologies into its broader energy expansion plans has demonstrated the ability for economically developing countries to play a prominent role in the global movement to combat climate change. Yet, while these trends are important and should be duly recognized, China’s prospects for accomplishing its lofty energy objectives depend on a number of uncertain factors—including potential obstacles.

Excess coal production in China, enabled by industrial overcapacity, has caused grid system operators to curtail renewables in order to satisfy coal generation quotas

Excess coal production in China, enabled by industrial overcapacity, has caused grid system operators to curtail renewables in order to satisfy coal generation quotas

Though China has risen to become the preeminent world leader in renewable energy investment—having committed $110.5 billion during 2015—limitations to energy infrastructure throughout the country are preventing proper integration of these systems into the larger national grid. Industrial overcapacity challenges continue to favor state-owned factories, as China’s official annual planning process is designed to ensure a minimum number of operating hours throughout the year for coal-fired generators. Seeking to meet this quota, system operators at grid companies most often curtail renewables to offset these coal-fired generation figures. Because generators are paid only when providing energy to the grid—guaranteed through a set price per kWh—there is no capacity payment for these generators. Making up more than 60 percent of total installed capacity and represented by longstanding influencers, the coal industry is resistant to concerted efforts to reform the current operating hour quota system.

These grid inefficiencies are disproportionately impacting the renewable energy sector—exemplified by a 15 percent curtailment in wind energy during 2015. Present challenges toward properly integrating wind, solar, and other renewables into the greater energy grid are illustrating the growing need for more effective energy storage mechanisms and technologies that ensure stronger short- and long-term efficiency.

Despite world-leading renewable investment and installed capacity figures, grid inefficiencies are allowing a large portion of China’s wind and other renewable energy generation to go to waste

Despite world-leading renewable investment and installed capacity figures, grid inefficiencies are allowing a large portion of China’s wind and other renewable energy generation to go to waste

Proving to be a major barrier to seamless grid integration for renewables following years of aggressive expansion, overcapacity has left the Chinese energy sector in more than $16 billion of outstanding debt—with $4.4 billion of those bonds due from renewable companies. This record debt is plaguing China’s largest renewable energy producers, with four companies defaulting on $1.8 billion worth of bonds—including top solar panel producer, Yingli Green Energy Holding Co., which missed payments on more than $268 million of notes. These financial trends are highly concerning, as solar- and wind-power generating plants throughout the country are noticeably lagging behind production of equipment—a potentially destabilizing trend as the Xi Jinping Administration strives to uphold its commitments toward reducing never-ending nationwide pollution problems.

Yet, while these limitations pose fundamental challenges for China in its long-term efforts to realize its energy efficient goals, they remain a technical obstacle within what is proving to be an encouraging stage in the country’s clean energy revolution. China’s impressive investments in renewables are influencing other developing countries to push strongly for similar clean energy development, while simultaneously pressuring leading developed countries—such as the US—to expedite domestic transitions to energy efficient economies. The International Energy Agency (IEA) announced earlier this month its decision to select a Chinese official as a special advisor to the IEA head. This is the first time a Chinese official has filled the role, underscoring growing cooperation between the leading energy agency and the world’s number one polluter and energy consumer.

China’s ability to overcome inefficiencies by successfully integrating renewables into the larger national grid could serve as a blueprint for a globally integrated sustainable energy grid

China’s ability to overcome inefficiencies by successfully integrating renewables into the larger national grid could serve as a blueprint for a globally integrated sustainable energy grid

China’s growing leadership around energy efficient technology and policy, coupled with its perpetuating environmental troubles and grid infrastructure inefficiencies, demonstrate the complex and dichotomous identity of this 21stcentury global giant. Though record-breaking investments in renewable energy and concurrent efforts to curb carbon output through coal factory closings offer a glimpse of China’s great desire to surmount its environmental struggles, a bureaucratic stranglehold over state-owned energy companies enables industrial overcapacity to offset much of the nation’s progress in clean energy.

China’s prospects for accomplishing its clean energy and climate change prevention goals will greatly depend on its ability to overcome internal political and infrastructural inconsistencies. However, should the country prevail in its energy goals—transforming successful local energy systems into a blueprint for a comprehensive integrated national grid—China will usher in an innovative future for global energy. The successful integration of renewables could offer a new foundation of technologies and standards for a globally integrated grid—enabling humanity to move one step closer toward achieving a healthier future for the planet.

This article was originally posted here on David Solomon’s China Rising blog and is reposted with permission from the author.

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Filed under China, Energy, Environment and sustainability, FEATURES, SLIDER

China’s Humanitarian Policy in the Philippines: Politics Over People?

Image courtesy Bruce Reyes-Chow

Image courtesy Bruce Reyes-Chow

China has been no stranger to territorial conflict throughout its long and complex history, having met plenty of resistance while spreading its dynamic culture near and far. Today is no different, as intense disputes over tiny island chains in the South and East China Seas have left China in a state of particularly poor relations with some of its most important neighbors. These disputes, of course, do not bode well for maintaining reasonable terms over some of the region’s most important geopolitical issues. However, what has become equally as apparent—and potentially more important—is the way these conflicts are currently affecting the way China conducts humanitarian policies in the region. As China continues to rise toward the top of global power and influence, many assert that with it comes a rising role of global responsibility. What we have found thus far is that China does not appear interested in taking up that challenge.

After Typhoon Haiyan—an exceptionally powerful storm—roared through Southeast Asia in early November and devastated parts of the Philippines, leaving the country’s death toll at over 6,000, China surprised the global community by offering a meager $100,000 in humanitarian aid. This, compared to the tens of millions of dollars in aid offered by many of the world’s most powerful countries, was perceived as particularly frugal and, to some, downright disrespectful. Understandably, China received quite a bit of backlash for its decision and soon thereafter increased its contribution to $1.6 million and committed state medical resources to the areas of the Philippines most affected by the disaster. However, China’s initial contribution seemed to clearly define its true opinion on the issue.

Despite China’s late arrival to the hard-hit Philippines, its aid and assistance was, of course, still received warmly and excitedly by the victims. When a natural disaster afflicts a nation, political relations no longer seem to matter to many. Filipino residents greatly embraced China’s support. Gina Tubigon expressed her appreciation after China’s arrival ensured the survival of her sister-in-law, Elesea. A 75-year-old suffering from a chronic respiratory ailment that worsened in the wake of the typhoon, Elesea may not have lived through the storm’s aftermath had it not been for the assistance of the Chinese medical team. Relieved about her sister-in-law’s stabilized condition, Gina expressed her appreciation, noting, “I know the relationship between the Philippines and China is not good, but we’re very thankful for the help.” This purely honest and non-politically calculated sentiment sums up the importance of cooperative relations between the two nations. It also suggests the possibility that a lack of increased aid and assistance from the Chinese government may have caused Gina to lose her sister-in-law.

 Relations between the two countries have been tumultuous for some time. As China continues its unprecedented rise, with an increasingly strong military accompanying extraordinary economic development, its Southeast Asian neighbors have become more and more anxious about territorial integrity. As China’s claims to the region become more extensive, the Philippines has been bolstering its defense and maritime law enforcement—with the help of US support—and has sought endorsements from ASEAN during the process. The Philippines, just like many of its regional neighbors, has endorsed the US’s recent pivot to Asia, as a mechanism to balance against Beijing’s increased maritime objectives.

These exhaustive disputes have occurred between the two countries for decades, but have become further amplified in recent years, as China’s claim to maritime territory off the coast of the Philippines—the 200 nautical mile radius that makes up its Exclusive Economic Zone (EEZ)—has continued to expand. This includes a tiny rock called the Scarborough Shoal, which is no bigger that the size of a relatively small raft, yet vital to the two countries, as it holds important designation for charting territorial boundaries. The dispute between the two countries serves as a microcosm for a more general trend of tension and insecurity that has existed between China and its neighbors further south.

Though these tensions have persisted for many years, amplified to greater extents during certain periods more so than others, they have ceased to have a highly significant or long-term impact on trade relations in the region. Yet, China’s frugal initial response to Haiyan relief reflected a new realm of implications—that these strained relations are having a negative impact on how China is handling its humanitarian policy in the region. As the countries of East Asia continue developing economically, their regional interdependence grows in import. They must be prepared to support one another in combatting natural international crises that extend beyond politics, such as typhoons of the magnitude of Haiyan, especially when these crises have potential for mutually severe impact on multiple countries in the region.

China’s interest in extended control and influence over the region of the South China Sea—and East China Sea as well—has caused many to ponder whether Beijing also plans to embrace a wider role of responsibility regarding international crises. By offering such a small amount of financial aid during the immediate aftermath of this horrific storm, Beijing has implied that—at least for the time being—national interests remain the focal point of its current objectives, clearly trumping the need to be an international leader.

Of course, China’s stance toward the Haiyan relief effort is certainly not simple—with a range of complex considerations likely at play throughout the decision-making process. One fundamental question posed in response to China’s position is whether China is currently choosing not to emphasize the importance of more intimate relations with its neighbors—and the international community more generally—in order to instead commit more focus inward. As the Chinese government creates very carefully calculated strategies regarding domestic economic growth and infrastructural development, large numbers of financial resources and assets are presently committed to various projects throughout the country.

Indeed, China’s current national economic milieu is one of many different parts. These parts include initiatives such as western economic expansion, raising the standard of living for larger populations, developing the nation’s energy sector in a push for cleaner sources of fuel to drive the country’s future development, further establishing modern industries throughout different parts of the country (i.e. financial, technological, and creative/cultural sectors)—and many others. In addition, unprecedented economic progress has also instigated a range of complex social strains, some of which have never before been seen. Actively seeking to deal with these increasingly pronounced issues, such as frustration with appallingly high levels of pollution, larger interest in individual freedoms and self-expression among Chinese citizens, and rapidly evolving national identity—to list only a few—the Chinese government is carefully undertaking its national strategy.

As China consciously addresses these economic and social factors, simultaneous emphasis on non-political/economic international issues may not be on the immediate agenda. National leadership may currently ascertain that, still in an infant state of modern global importance and influence, this complex and highly dynamic country is not in a position to fully involve itself financially and logistically in these types of crises. However, regardless of China’s strategy with respect to regional and international stability—which at this point can only be speculated—what is clear is that China’s highly active position in geopolitical affairs has caused its western counterparts to expect a greater level of support from the rising giant towards these types of crises. Most important will be how China responds to this increased level of pressure and expected responsibility from its global economic partners as similar issues come about into the future.

Nevertheless, in the case of Haiyan, this is only but one event in the midst of a lengthy modern history of strained relations between these two countries that has fluctuated in degree over the years. Therefore, only time will tell if China’s increasingly powerful international role will cause the economic powerhouse to engage the international community differently into the future. In the meantime, the aid and assistance that China did eventually provide to the Haiyan relief effort was effective and surely prevented many from severe illness or death. The victims of the storm as well as those on the medical relief team were not considering regional political tensions as lives were saved. This kind of understanding and expectation will hopefully be at the core of decision-making between China and its Southeast Asian neighbors into the future, as a rapidly changing world seeks to prioritize people over politics.

 

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Filed under China, Current Events, Foreign policy, Philippines, Regional Relations, SLIDER, South China Seas

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