The Yin And Yang Of China’s Renewable Energy Policies – More Solar, More Wind, And More Coal

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In 2021, China’s president, Xi Jinping, called for a dramatic increase in the country’s renewable energy resources. When Xi speaks, things happen — quickly. China has vast deserts in the northwest part of the country that are lightly populated and blessed with abundant sunshine. Eastern parts of the country are favorable locations for wind farms. Between the two, China expects to install 455 GW of wind and solar before the end of this decade.

That’s more clean energy generation capacity than is currently available in any nation outside China and almost the size of the entire power network — including coal plants and nuclear reactors — in India, which has the world’s third largest amount of installed renewable energy. “It’s mind-blowing,” said Cosimo Ries, an energy analyst with Trivium China in Shanghai tells Bloomberg. “There’s nothing in history you can benchmark this against.”

So much clean power is coming online that the country could reach peak emissions well ahead of its 2030 deadline, giving the planet a better chance of keeping global temperatures in check and demonstrating a pathway forward for the world to successfully transition away from fossil fuels, as stated in the final report from the COP 28 climate conference in Dubai last year.

This week, China broke ground on a massive new 55 billion yuan ($7.7 billion) project in Shanxi province southwest of Beijing that will combining wind turbines, solar panels, and battery storage in an old coal mining area, according to a report from Shanxi Daily picked up by Bloomberg. “China is relying on these large wind and solar bases to play a key role in its new energy system,” said Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies.

The new facility in a derelict coal area in the mining hub of Datong will have 6 gigawatts of wind and solar capacity and 3.4 gigawatt-hours of energy storage. For comparison purposes, a typical nuclear power plant produces about 1 gigawatt of electricity. The new facility in Shanxi will be connected to the grid by the end of 2025, feeding power to Beijing and its surrounding areas via the Datong-Tianjin ultra high voltage power line, according to the report.

Constructing large scale energy bases can help take advantage of China’s now mature clean energy industries, according to Liu Hanyuan, the billionaire founder of Tongwei Group which owns one of the world’s largest solar firms. “They can support the country to accelerate its energy transition,” Liu said at a Chengdu conference this month. China “can even complete the process ahead of Western countries.”

Renewable Energy And Transmission Lines

China is roughly the same size as the United States including Alaska. The areas most conducive to renewable energy generation are in the northwestern part of the country and may be a thousand miles or more away from China’s densely populated areas in the east and south of the country. One such project in the Kubuqi desert in Inner Mongolia is the size of 20 Central Parks and provides enough electricity for 1.1 million homes.

China intends to build the equivalent of 225 more of these massive renewables bases across vast swathes of the country’s interior. Because the areas chosen for renewable energy development are lightly populated, the land is cheap, which lowers the cost of new renewable installations. When completed, these renewable energy hubs may produce the least expensive electricity in the world.

That means there is a need for lots of high voltage transmission lines to move the electricity from where it is generated to where it is consumed. China is creating a national network of new power lines that could take decades and cost as much as $300 billion to install. It’s already built more than 30 such conduits, while the rest of the world has only a handful. State Grid Corporation of China supplies electricity to more than 1.1 billion people. Last year, it started constructing a 150 billion yuan ($21 billion) power line project.

Renewable Energy Heads West

There is also another prospect. Instead of electrons just flowing east, factories could move west. Around the hydropower-rich mountains and rivers of Sichuan and Yunnan, local leaders previously used the promise of cheap electricity to woo energy-intensive industries and now host plants for Toyota and CATL.

Now Bautou, an industrial center in Inner Mongolia, is marketing itself as the “World’s Green Silicon City.” It wants to lure factories that process the silicon needed for semiconductors with low cost renewable energy. 70 miles south in Ordos, Envision Energy — a battery producer and China’s second largest turbine maker — is building a wind, solar and hydrogen powered industrial park for the production of electric vehicles and components.

The surge in investment in renewable energy in Inner Mongolia is acting as a catalyst for high tech industries, Wang Lixia, head of the autonomous region’s government, said last month in Beijing. “The growth of new energy has brought rapid growth to our economy,” she said, following a meeting with California Governor Gavin Newsom.

Ming Yang Smart Energy Group Ltd., which produces the world’s largest wind turbines is using a factory in Baotou to seek more orders from the desert buildout, according to Liu Wei, a manager at the site. The facility has an initial agreement in place to sell as many as 180 turbines to a development that will form part of the second wave of projects, he said.

Coal Rears Its Ugly Head

It’s not all sunshine and roses for China’s renewable energy sector, however. The country is including hundreds of new coal fired generating stations to supplement the output of electricity from solar and wind installations. Last year it approved the most new coal fired capacity since 2015, according to the Center for Research on Energy and Clean Air and Global Energy Monitor. Many of those new coal facilities, including in Inner Mongolia, are being constructed alongside the solar and wind arrays.

Beijing says its aim is to provide a potentially rarely used backstop for intermittent renewable generation, and to maintain energy security by keeping an option to use its domestically abundant coal. To help encourage the policy, China’s government this month set fees to compensate the fossil fuel plants when they’re left unused. Xi Jinping calls it the principle of “building the new before discarding the old.”

Critics like Greenpeace argue that adding new coal fired capacity raises risks of higher emissions and diverts spending from alternatives like grid improvements and battery storage. China burned more coal last year than the rest of the world combined, and relied on coal for more than 60% of its electricity generation, the IEA said in a report last year. While the nation’s coal power output will peak around 2025, the speed at which the fuel is relegated to a supporting role remains uncertain, according to the agency.

Solar, wind, nuclear, and hydro capacity is now at a level where it can meet and eventually outpace growth in energy demand in China, according to Lauri Myllyvirta, lead analyst for CREA. If the tempo of deployments is sustained China’s emissions will fall next year, and potentially “enter into a structural decline,” he said.

The Takeaway

In Hangjin Banner, a desert town with a population of about 112,000, officials are preparing to install 12 gigawatts of renewable energy as part of the second phase of President Xi’s strategy. That’s about the same amount currently installed in all of Denmark. Developers say they will first prioritize grid infrastructure and then add a combination of wind, coal and solar plants that they expect will contribute to global climate action. “You can drive all the cars you want,” said Li Lijun, head of the local energy administration. “We will be responsible for cutting the emissions from here.”

China’s continued reliance on coal even as it takes massive strides forward in the production of renewable energy makes a lot of people nervous. One strategy seems to contradict the other. And yet, it’s difficult to fault a nation that is being so aggressive about getting to 100% renewable energy faster than any other major economy in the world.

What we find most interesting around the geothermal hot tub here at CleanTechnica global headquarters is the idea that industry may move to where renewable energy is generated instead of needing to be transported via hugely expensive (and controversial) transmission lines to existing commercial centers.

Throughout history, people have been attracted to places that supplied power, starting with the mills in New England that were powered by rivers and streams. It’s interesting to think that the same dynamic could happen again as renewable energy supplies increase around the world. Everyone thinks in terms of moving electricity to where it is needed. The idea of moving demand closer to the source is intriguing and a trend that deserves to be watched carefully. Energy has always been a powerful force for social change and could be again.