China needs to slash coal consumption to a fraction of its current level if the country is to have a chance of hitting its target of carbon neutrality by 2060, with up to $20 trillion of investment needed to reach the goal.
To hit the ambitious target, coal will have to drop from the expected 56% of China's energy mix this year to just 5%, Ding Zhimin, the former deputy director of the Policy & Law Department of the National Energy Administration, told the International Energy Executive Forum 2021 held in Beijing late last week.
Renewables replacing coal
Ding said coal will be replaced by renewable energy — led by wind and solar — which will eventually account for more than 85% of China's total energy mix by 2060, up from the 15% forecast this year.
This carbon neutrality drive, Ding said, will require China to invest 100 trillion to 130 trillion yuan ($15.4 trillion to $20 trillion), which accounts for 1.5% to 2% of the country's total gross domestic product — much higher than the more than $5 trillion earlier predicted by energy consultancy Wood Mackenzie.
The hydrogen 'grey rhino'
Hydrogen will have a key role to play in China’s energy transition, she added.
“Hydrogen energy will become a grey rhino in the energy industry,” a metaphor Ding used to describe the potentially enormous impact hydrogen will have on energy industry development.
China is already the world's top hydrogen producer, with output this year expected to reach 294 billion cubic metres, according to Ding.
She said that, out of the country’s 96 state-owned enterprises, 26 have been engaged in hydrogen-related project development, while each of the country’s 34 provinces, regions and municipalities directly under central government control are rolling out hydrogen energy development plans for the country's 14th five-year development period from 2021 to 2025.
Based on a government plan laid out by the State Council in October this year, China is aiming to boost the sale of cars powered by new energy to account for 25% of the total car sales in 2025. By 2035, it is hoped the country will run all of its public transportation on electricity.
China is one of the world’s largest carbon-emitting countries, with carbon dioxide emissions of 10 billion tonnes per annum now accounting for 30% of the world's total.
Speaking at the 75th session of the United Nations General Assembly via video in late September, President Xi Jinping said his country aims to reach peak CO2 emissions before 2030 and to achieve carbon neutrality before 2060.
Wide array of energy sources
By the end of last year, China's power generation capacity with renewable resources reached 794 million kilowatts, including 356 million kilowatts of hydropower, 210 million kilowatts of wind power, 204 million kilowatts of solar power and 22.5 million kilowatts of bio resources, said Ding. The power generation capacity fueled by clean energy accounted for 40% of the country’s total power generation capacity.
Last year, power generated by renewable energy rose by 6% to 190 million kilowatt hours, accounting for 30% of the electricity production.
The drive to use more clean energy will boost electricity generated from non-fossil fuels to account for 43.5% in 2035 and to 60% by 2050.
China holds some of the world’s largest coal reserves and is the world’s top coal producer, with domestic production last year rising 4.2% year-on-year to 3.754 billion tonnes.