Is Coal Done Growing in China?

On the tree of eco-friendly energy policy options, there isn’t much low hanging fruit left, but in China, where every big energy decision has global consequences, there remains a massive opportunity for emissions reductions: phasing out coal.

China consumes roughly half of the world’s coal, and that heavy reliance is evidenced by the toxic smog that chokes its major cities every winter. The Chinese populace has agitated for change, taking to social media platforms like Weibo to demand action on the country’s deadly air pollution problem, and Beijing has shown signs of taking that unrest seriously.

As a result, projections for China’s energy mix going forward show that coal will occupy a smaller slice of the country’s energy pie. The EIA expects Chinese coal consumption to stay relatively level through 2040, but that means other energy sources will grow to meet the rise in demand that will accompany the country’s ongoing economic development. Today, coal accounts for 72 percent of Chinese electricity production, but by 2040 the EIA expects that share to drop to 47 percent. That’s a major shift.

So how is this happening? Well, as the EIA notes, “[as] part of China’s 13th Five-Year Plan, a total of 150 gigawatts (GW) of new coal capacity has been canceled or postponed until at least 2020.” Restricting the number of new coal plants will level off coal consumption, but that means that Beijing will have lean more heavily on alternative sources. China has the world’s largest reserves of shale gas, but tapping that resource is easier said than done. Nuclear power production is expected to rise to provide a bigger proportion of Chinese electricity than the 3.6 percent it supplies today, but its gains by 2040 will be relatively modest compared to those of solar and wind.

Renewables are projected to supply the majority of China’s emergent energy demand, and that includes solar, wind, and hydropower. Greens will applaud this outlook, as will Chinese urbanites desperate for breathable air. But consumers—both businesses and households—can reasonably expect to be paying more for their power than they currently do as renewables displace coal. Coal is one of the dirtiest fossil fuels around, but it does have one thing going for it: it’s dirt cheap. Wind and solar have seen costs fall in recent years, but the industry still relies on government subsidies and a whacked-out global supply chain that often relies on companies producing products below cost, especially in China.

Reducing China’s reliance on coal is a low hanging fruit for sustainable development and climate change mitigation, but the bill it’s going to run up is going to make that fruit taste awfully sour.

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