Plummeting of renewable energy, battery prices mean that China could have 62% clean power and cost 11% by 2030

China is the largest emitter of greenhouse gases in the world, and builds the most power plants of any country in the world, so its decarbonization is at the forefront to prevent dangerous climate change. But the cost of storing wind, solar and energy has fallen so fast that building clean power is now cheaper than building fossil fuels – a lot cheaper.

New research shows that clean energy prices plummet means China could run its grids at 20 reliably on at least 62% non-fossil electricity production by 2030, while costs cut 11% compared to a business-as-usual approach. Once again, it is cheaper to save the climate than to destroy it.

While rapidly falling clean energy prices enable the transition of clean energy in China, only smart policies can achieve a future with low carbon. Fortunately, this transition from clean energy would also stimulate long-term sustainable economic growth while cleaning the country’s air.

Short term decisions, long term impact

COVID-19 causes global emissions drip – China tumbles by an estimated 25% in the first quarter of 2020. But without decisive action to transform the country’s energy system, the pandemic could be a lightning strike in the long term increasing emissions trend of China. May data showed a rapid rebound driven by coal and cement production, with emissions rising 4% to 5% year over year.

The choices for economic recovery that China is making today could improve or worsen its air and water quality. While the Ministry of Ecology and Environment recently confirmed the country’s climate commitment, which promises to reach peak emissions and reach 20% non-fossil electricity production by 2030, its recovery from coronavirus could rely heavily on polluting sources as China more coal permits in March 2020 approved then the whole of last year.

China’s scale makes these decisions globally important, and potentially dangerous – emissions from the country’s power sector are comparable to combined emissions from power sectors from the United States and Europe.

The additions of coal capacity in 2019, for example, accounted for about two-thirds of all globally added capacity. However, the country has also demonstrated unparalleled ability to scale zero-carbon generation, leading the world in installed wind and solar capacity, as well as nuclear power.

China plans its economy in “Five-Year Plans” that lead development and serve as the most important measure of performance for officials. The plans set binding, quantitative goals for everything, from the economy and infrastructure, to health and social development, to the environment.

China’s leaders are currently developing the 14th Five-Year Plan for 2021-2025, and greater ambitions for climate and clean energy could accelerate decarbonization. For example, the country’s current climate targets could increase emissions by 2030 before declining, and to this day the country’s carbon dioxide (CO₂) targets are expressed as carbon intensity per unit of GDP, allowing emission increase with economic growth.

A more realistic picture of energy costs

Despite the forthcoming prospects of future emissions, China’s current climate goals are within reach, with multiple studies charting scenarios to achieve high penetration of sustainability in the coming decades.

But as the new paper from Stony Brook University and Lawrence Berkeley National Laboratory researchers indicates, even these optimistic analyzes do not capture how dramatically sustainable energy and storage prices have fallen in recent years. The global weight-average level cost of electricity (LCOE) of solar panels, wind turbines, and battery storage fell between 2010 and 2018 by 77%, 35%, and 85%, respectively.

And widely cited references such as the International Energy Agency’s World Energy Outlook and the US Government’s International Energy Outlook have underestimated the development of clean energy due to rapidly falling costs that made the previous analysis obsolete.

Considering the mismatch between projections and the project’s real economy, the researchers updated SWITCH-China, an optimization model originally developed at the University of California-Berkeley, to determine how different costs affect sustainable energy scenarios. have on future commitment (SWITCH is a loose acronym for investing in sources of solar, wind, transmission, conventional and hydro).

The study examines four scenarios: business as usual, which assumes that current policies continue with moderate cost reductions for sustainable; sustainable sustainable costs, with sustained rapid declines in sustainable and storage costs; a carbon reduction scenario, in which carbon is limited to 50% lower than the 2015 level in 2030 on top of the low-cost scenario; and a deep carbon reduction scenario that includes 2030 emissions 80% below 2015 levels.

China’s economic opportunity for clean energy

If the rapidly declining price trend for renewable energy continues and choices for capital investment move away from fossil fuels – as indicated in the second scenario above – China could supply 62% of its electricity from non-fossil sources by the end of the decade.

Electricity costs are reduced in this scenario by 11%, from $ 73.52 per megawatt-hour (MWh) below the status quo to $ 65.08 / MWh. Emissions from power sector would be 22% lower compared to levels in 2015 instead of 5% higher. This trend reflects widely reported modeling allowing the US to achieve 90% clean energy by 2035, while cutting energy costs by 10%

With a lower carbon cap of 50%, however, China was able to cut its 2015 electricity sector emissions by half and still come up with costs 6% lower than the base case.

Higher concentrations of wind and solar energy on the grid encourage a major overhaul in storage capacity. To support 62% non-fossil energy, the analysis estimates that storage capacity should increase more than eightfold from the current range, from 34 gigawatts (GW) to 290 GW. The model also allows existing natural gas generation to fill in the gaps to meet peak loads, although the need for natural gas capacity would be almost halved in this low-cost scenario.

Regional variations in demand and capacity for innovation generation will also require changes to China’s transmission infrastructure. A large part of the nation’s solar capacity is concentrated in the northwest, which becomes a net exporter of electricity to the central, northern and eastern regions under the low cost scenario. As much as 35 GW of transmission capacity could be needed to move solar and wine generation to demand centers such as Jing-Jin-Ji, the Yangtze Delta and the Pearl River Delta – the double current cross-provincial transmission capacity.

China can have clean air and economic growth thanks to cheap clean energy

While plummeting prices for wind, solar and energy storage technologies will enable this clean energy transition for China, policy action is required for its ‘low carbon’ future.

Because the 14^th Five-year plan and other policies expected in the coming years determine China’s priorities in energy investment and trajectory of decarbonisation, policymakers must use current and projected low renewable energy prices to set ambitious targets for deploying clean power. These goals should be accompanied by decisions to reduce investment in fossil fuels, and provide job training to help workers transition to clean energy.

China could also accelerate its “peak date” by five years, ensuring that official plans include reducing overall emissions by 2025. The country could also support an absolute carbon cap with stronger underlying targets for key economic sectors – power, industry , transportation, buildings, and non-CO₂ emits.

These goals would generate demand for new infrastructure that stimulates long-term economic recovery through clean energy supplements, and wise long-term investments that provide cleaner air at lower costs.

Dirty air is compatible with economic growth and a thriving modern society – thanks to cheap clean energy, China can have both.