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China’s commitment to decarbonisation has not changed, despite increase in coal power use

At a recent hearing on “China’s Energy Plans and Practices” held by the US-China Economic and Security Review Commission before the US Congress, a member asked those testifying: “When do you think the Chinese leadership will not be concerned about energy security?” It was a trick question, but the panellists knew the correct response: never.

China’s recent focus on coal supply and coal power generation has generated fear that it has chosen energy security over decarbonisation. However, like many countries right now, China has both immediate priorities and long-term goals.

While it’s true that China has prioritised coal at present, it’s a mistake to conclude that it has postponed its decarbonisation plans. On the contrary, China has taken significant steps to increase its clean energy supply.

China’s power outages last September resulted from a combination of strong demand, weak coal production, high coal prices, and coal pricing restrictions. The common thread running through all these was a breakdown in policy coordination: coal mining regulators ignored output bottlenecks; provinces didn’t heed calls to manage energy consumption; there were no plans to offset hydro production shortfalls; and pricing market rigidity backed generators into a corner.

Those immediate issues were addressed, but since then, the central government’s tone displays a greater awareness of the risks of a chaotic energy transition.

Since these problems began to emerge last summer, Beijing has admonished cadres at all levels to take measured actions consistent with the goals of decarbonisation. It sent a message that there would be no reward for actions that appeal to long-term goals at the expense of immediate priorities.

Data from the China Electricity Council shows that the country sourced well over 60 per cent of its power from thermal coal in 2021. This will not change overnight, even as the country adds more than 100 gigawatts (GW) of wind and solar every year.

China’s immediate priority to preserve uninterrupted power was made more urgent this year. Growth in 2022 will be challenged by a property sector slowdown, Covid-19 policy impediments to consumer spending, and a military conflict that could put China on the wrong side of global sanctions.

Beijing has further need to elevate the importance of stability as the party congress prepares to break with tradition and appoint Xi Jinping to a third term, something no leader has been granted since the 1980s.

This is not to suggest that China would be justified in abandoning, altering, or delaying its decarbonisation efforts under any circumstances. China produces almost a third of the world’s carbon dioxide, and about half of that comes from coal power. Changes to China’s decarbonisation commitment would have profound effects on global efforts.