Can China decarbonise its economy and if yes what will be the cost for its energy supply security?
We argue that continuous fuel mix shifting towards renewable energy will allow the Chinese electricity sector to improve its supply security while reducing its GHG emissions.
The Chinese economy is very carbon intensive. Substantial improvements in this front brought China from the worst end of the list of countries ranked by carbon intensity, closer to the middle. While the detailed determinants of the Chinese carbon intensity require further investigation it can be said that it is primarily owned to its largely manufacturing driven economy (services can generally be less emissions intensive) and the fact that China uses a highly carbon intensive fuel mix.
|Figure 1: Electricity Fuel Mix in 1972 (IEA)|
Carbon intensity is prevalent in the Chinese electricity sector where the fuel mix is moving from a simple 62% coal; 21% hydro; 17% oil in 1972 (see Figure 1) to a predicted 73% coal; 14% hydro; 7% nuclear; 3% wind; and about 0.5 for solar and biofuels respectively in 2020. (see Figure 2)
As it becomes obvious the role of coal has grown substantially to support China's economic growth. and no despite the record breaking investment in renewable energy, coal will remain the dominant fuel in China until 2020 and beyond.
|Figure 2: Electricity Fuel Mix in 2020|
Similar to several developed countries (USA, UK, Australia, Germany) China has relied on its indigenous coal reserves to fuel its economy. This approach reflected a supply security paradigm that focused on control of national resources against imports. While mature economies were forced to abandon this paradigm because of national resource depletion, costs, environmental concerns etc China is just about reaching that point.
|Figure 3: Electricity Import Dependence|
Inevitably that leads to the current energy security paradigm, that of diversity. As it has been previously pointed out the Chinese persistence on coal is not only harmful for China emissions record but also for its own electricity supply security. We found that coal does not any more support independence of fuel imports since it is partly an imported resource. China's efforts to reform its coal sector, mainly via shutting down small, inefficient and dangerous coal mines, needs to go further in reducing the impact of the coal pathway dependency.
Figure 4: Shannon Wiener Index (SWI) for Electricity Sector
reducing the impact of the coal pathway dependency.
Since coal imports are rising (partly driven by record-low international coal prices as the rest of the world moves away from coal) then coal increases electricity sector import dependence (see Figure 3) and at the same time keeps its diversity very low (see Figures 4 and 5). Both HHI and SWI show that the diversity of the Chinese electricity sector is very low. Despite the absence of any absolute thresholds SWI is generally considered to be good when it is near 2 and HHI when it is near 2000.
Figure 5: Herfindahl-Hirschman Index (HHI) for Electricity Sector
We argue that China should reduce its dependence on coal and increase the presence of other resources in its fuel mix. All fossil fuels and nuclear energy are partially imported in China and while they will improve diversity they will also increase import dependence. However, if China substitutes coal with renewable energy sources then it will benefit both its independence (since renewable energy sources are predominantly indigenous) and its resource diversity.
This article is based on research conducted by Keagan Rubel and Konstantinos Chalvatzis and has been published at the Journal of Technological Forecasting and Social Change. The authors are grateful to the anonymous reviewers and the journal's editors for their constructive and helpful comments.