If China is to make its contribution to the two-degree limit on global warming, it will need to impose an immediate moratorium on new coal-fired power stations and introduce an efficient carbon pricing system. These are the main results of the China Renewable Energy Outlook 2018 (CREO), which was presented today at the UN Climate Change Conference (COP24) in Katowice, Poland. The CREO is published by the think tank, China National Renewable Energy Centre (CNREC), and the state-run research institute, Energy Reform Institute (ERI). The Deutsche Energie-Agentur (dena) – the German Energy Agency, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) (German society for international cooperation) and other institutes, think tanks and universities from China, Germany, Denmark and the USA were involved in the preparation of the report.
In addition, the authors of the CREO recommend a plan for structural change in provinces that are heavily dependent on coal production, as well as strategies to fund measures aimed at supporting electrification in industry and in the heating of buildings. Ultimately, renewable energy in China needs to be developed more quickly than it has been up to now. The annual rate of expansion should be 80-160GW for photovoltaics and 70-140GW for wind energy.
‘In converting its energy system, China is faced with similar challenges to Germany. These include the phasing out of coal-fired power generation and the structural change that this entails,’ commented Andreas Kuhlmann, Chief Executive of dena, on the results of the 2018 CREO. ‘Nevertheless, the CREO scenarios affirm that a renewable, low-carbon future is both achievable and economically viable. Germany should work with China to find solutions, because climate change is a global challenge for humankind.’
Structural change creates jobs and brings macroeconomic benefits
The CREO scenarios also show that the development of the renewable energy industry will have a positive effect on the development of the whole economy in China. Between 2025 and 2035, as a result of strong expansion and positive developments worldwide, employment will increase strongly in those sectors that are directly or indirectly linked to renewable energy. According to the forecasts, the positive effects will outweigh the effects of declining employment resulting from the phasing out of fossil fuels, in particular coal.
The China Renewable Energy Outlook
The 2018 CREO is the third report in a series published by the CNREC. It analyses current Chinese energy policy and makes recommendations for its ongoing development. Its aim is to promote the energy transition and thereby help China to achieve its climate protection targets.
The CREO results are based on the comprehensive modelling of two main scenarios. The ‘stated policies’ scenario requires the complete and consistent implementation of the policy measures that have already been decided on for the various energy sectors. This is forecast to bring about a 61 per cent reduction in emissions by 2050. The ‘below 2°C’ scenario analyses the further steps that will be necessary to enable China to meet the requirements of the Paris Agreement. For this, China would need to reduce its emissions by more than 75 per cent. A comparison of the two scenarios reveals gaps between the policy measures agreed upon and the actual course of action necessary between now and 2050. Based on this, proposals can be put forward as to how these gaps can be filled through short-term political action.
Following a resolution in the German Bundestag (lower house of Federal Parliament), the Federal Ministry for Economic Affairs and Energy is providing support for dena to advise the CNREC.