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1. Winter Coal Shortages Reveal Chinese Energy Vulnerabilities

Author:
Elizabeth Chen
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
Amid the coldest winter recorded since 1966, provinces across the People’s Republic of China (PRC) struggled with the worst electrical blackouts seen in nearly a decade (OilPrice, January 8). More than a dozen cities across Zhejiang, Hunan, Jiangxi, Shaanxi, Inner Mongolia, and Guangdong provinces imposed limits on off-peak electricity usage in early December, affecting city infrastructure and factory production. Analysts expect power shortages to persist through at least mid-February (SCMP, December 23, 2020). Officials have repeatedly assured the public that residential heating would not be affected and that China’s electrical supply remained “stable” and “sufficient,” even as energy spot prices continued to rise into the new year.
Topic:
Energy Policy, Services, Electricity, and Coal
Political Geography:
China and Asia

2. Getting to 30-60: How China’s Biggest Coal Power, Cement, and Steel Corporations Are Responding to National Decarbonization Pledges

Author:
Edmund Downie
Publication Date:
08-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In September 2020, China announced its intentions to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. The neutrality goal in particular was a breakthrough for global climate ambitions: a net-zero target from the world’s largest emitter, responsible for around one-quarter of global greenhouse gas (GHG) emissions. The two new goals—referred to in Chinese policy discourse as the “30-60” goals—are not China’s first public targets on GHG reduction. They are, however, the centerpieces of a new Chinese climate policy in which GHG cuts are a standalone goal rather than an ancillary benefit of more immediate priorities like energy efficiency and industrial upgrading. Prior approaches had required little engagement from firms in carbon management. Indeed, none of the largest Chinese firms in the coal power, cement, and steel sectors had publicized quantitative targets for reducing or controlling carbon emissions before the government announced the 30-60 goals. They faced little pressure to do so; authorities pressed firms in climate-adjacent areas like reducing air pollution rather than carbon management. The 30-60 announcement appears to mark a break from this era, forcing firms to adjust accordingly. This report, part of the China Energy and Climate Program at Columbia University’s Center on Global Energy Policy, assesses how China’s high-emitting industries have responded to the 30-60 targets and the accompanying elevation of climate within national policy priorities. It focuses on corporate and sectoral emissions reduction targets through June 2021 among 30 major firms in three of China’s largest sources of direct emissions: coal power generation, cement, and steel.
Topic:
Energy Policy, Natural Resources, Infrastructure, Coal, Industry, and Decarbonization
Political Geography:
China and Asia

3. Domestic Coal: A Hindrance to Renewable Energy Development?

Author:
Margareth Sembiring
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
Low carbon transition is an important climate change mitigation measure. It entails a switch from fossil fuels to renewable sources. The presence of cost-competitive domestic coal in coal-producing countries like Indonesia is often cited as a major stumbling block to renewable energy development. This article aims to probe the cheap domestic coal argument. It does so by examining the changing share of renewable energy sources in electricity production over a certain timeframe. The study finds mixed observations across important coal-producing countries. It thus argues that there is a need to go beyond the low-cost domestic coal axiom and examine deeper underlying factors that support or hinder renewable energy development in coal-producing countries.
Topic:
Climate Change, Energy Policy, and Coal
Political Geography:
Asia and Southeast Asia

4. Direction of Energy Strategy for the Sustainable Development of China’s Economy — Clean Utilization of Coal

Author:
Bai Yunfeng, Yi Peng, Du Shaozhong, and Wang Ying
Publication Date:
12-2019
Content Type:
Special Report
Institution:
Pangoal Institution
Abstract:
China is at the stage of urbanization and industrialization. The Chinese economy, which is mainly based on a large consumption of energy and resources, is growing extensively with an increasing demand for energy. Resources are exhausted, and a series of environmental problems occur with the rapid development of the economy. At present, China has surpassed the United States as the country with the highest carbon dioxide emission. As the world’s second largest economy, China is under a considerable amount of pressure to save energy and reduce its carbon emission. The persistent and severe large-scale smog in the country deeply affects people’s daily lives. Coal is the main source of air pollution. The extensive development and utilization of coal has largely caused pressure on the ecological environment and has directly influenced the socioeconomic development of the country. China is the world’s largest coal producer and consumer. Coal accounts for 68% of China’s energy consumption structure. The characteristics of resource endowment and the current industrial structure of China indicate that the dominant role of coal in China’s energy structure will not change for a quite a long time. Therefore, clean and efficient methods of energy utilization should be adopted to promote the sustainable development of China’s economy. The clean utilization of coal will be the strategic choice and landing point of the sustainable development of China’s economy.
Topic:
Climate Change, Development, Economy, Coal, and Sustainability
Political Geography:
China and Asia

5. A Tale of Three Coal Markets Common Challenges and Unique Attributes of U.S., Chinese, and Indian Markets

Author:
Jane Nakano and Sarah Ladislaw
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The United States, China, and India together constitute about 70 percent of global coal consumption and 64 percent of global coal production. Each country is an important contributor to the global coal supply and demand picture and yet each stands at a very different stage in its relationship with coal. The history of coal in the United States is predicated on a long-term decline in its share of the electricity fuel mix, but deep regional socioeconomic ties give the fuel an outsized role in national energy politics. Coal makes up 15 percent of the total U.S. energy mix and 30 percent of the electric power mix while the power sector accounts for about 90 percent of coal use in the United States. Over the years, electricity demand has flattened thanks to strong efficiency gains. Moreover, the abundance of inexpensive natural gas and rapid decline in renewable energy costs have significantly diminished the competitiveness of coal-fired power generation. Unlike in China and India, the U.S. coal fleet is in contraction as a wave of retirements is underway, with little evidence of reversal, indicating that the current downturn appears structural and not cyclical. After a recent period of decline and bankruptcy for the U.S. industry, a political movement to revitalize the coal sector has emerged from the current presidential administration. Notwithstanding the renewed political support, however, the regulatory uncertainty clouds a future pathway for a coal power resurgence. The notion of economic and energy security benefits long associated with the use of coal has effectively disappeared in one of the largest producer and consumer markets for coal in the world. China is far and away the largest coal consumer and has built coal-fired power generation capacity at an unprecedented rate over the past couple of decades. As it enters a new phase of development, China seeks to reduce the role of coal in its economy both to mitigate the environmental impacts of coal production and use but also to harness its domestic power consumption to drive its competitive advantage in things like solar, wind, and nuclear power generation. China has concrete targets to reduce greenhouse gas emissions and ambitious plans, such as a nationwide emissions trading system, that can influence the pace and scope of shift in its power supply mix. Despite these government targets and the ongoing industrial structural reform that can reduce coal’s dominance in the electric power sector, the trajectory for coal use remains significantly subject to the future of state-owned enterprises and economic liberalization. In contrast to the United States and China, India is a fast-growing market for coal where economic development and universal energy access goals often override concerns about environmental pollution and climate change. India also sees enormous opportunity in renewable energy development—for the positive environmental attributes, the potential commercial opportunities, and the ability to lessen reliance on imported sources of energy like oil, gas, and coal. The Indian central and state governments have set up ambitious policies to foster a greater share of renewable energy in the electric power mix. The growth in renewable power-generation capacity shows early indications that renewables as an indigenous resource have the potential to challenge not only coal’s economic advantage but also its energy security value propositions as an indigenous resource, warranting close attention for some potentially valuable lessons for power-sector management in other developing economies where renewables increasingly beat out coal. How India will calibrate its desire to phase out coal imports despite the quantitative and qualitative issues its domestic supply has is another issue with major implications for both global coal markets and the future of its power supply mix, particularly solar and wind. Even as each market navigates a unique set of circumstances surrounding the role of coal-fired power generation, the availability of midstream infrastructure looms large as a universally important determinant of the competitiveness of coal resources, and thus the fuel hierarchy. Railways are the dominant mode for transporting coal in China and the capacity constraints continue to intensify, disadvantaging domestic resources to imports. Midstream is also a major topic in the United States, where a lack of west coast export terminals limits the U.S. ability to take advantage of continued demand growth in Asia. Low utilization rates also reflect the headwinds facing coal-fired power generation in all three countries. For example, U.S. coal-fired power generation experienced a 20 percent decrease in coal fleet utilization rates and a 12 percent decrease in the generation capacity from 2015 to 2016. Also, while China is expected to add another 200 GW of new coal-power capacity by 2020, the utilization rate of 47.5 percent for the thermal power fleet in 2016 indicates a complex nexus between capacity investment and power demand in the country, where the capacity growth does not give a solid indication of electric power output or fuel consumption. The local air pollution and climate implications of coal-fired power generation in each country also depend on the age of their fleet and capital stock turnover. The perceived future direction of coal in each country impacts the willingness of investors to upgrade or build new, more efficient plants. Whereas the ever-weakening coal-power demand in the United States is diminishing investor appetite for new coal plants with higher efficiency, lower emissions (HELE) technology, the capacity expansion in China is enabling the modernization of its fleet that includes more HELE plants. The pace and scope of modernization for India’s coal fleet, which is much younger yet remains low efficiency and high emissions today, will be an important indicator for its future emissions profile. Lastly, various noneconomic forces at play can generate a tension between the needs of a changing electricity market and the political-economic pressures of expanding coal-power capacity. The coal sector enjoys a powerful narrative on its socioeconomic benefits like jobs and tax revenues for coal-mining communities, but enabled by technology advancements, the emerging focus on values like flexibility in the power sector has elevated attributes of many alternative sources of electricity, including renewables and natural gas in the United States. Likewise, the Chinese expansion of coal capacity appears to be misaligned not only with the projected level of power demand growth but also with government efforts to expand alternative sources of electricity, thus raising the risk of stranded or severely underutilized coal plant assets.
Topic:
Energy Policy, Natural Resources, Renewable Energy, and Coal
Political Geography:
United States, China, India, and Asia

6. The Trump-led Trade War with China: Energy Dominance Self-destructed?

Author:
Sylvie Cornot-Gandolphe and Jean-François Boittin
Publication Date:
09-2018
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Under particular US legal rationale, such as calling foreign imports a “national security threat”, President Donald Trump has started imposing tariffs and/or quotas and has launched national security investigations on a growing number of imported goods from US allies and others alike.In March and June 2018, the US imposed tariffs or quotas on steel and aluminium on all trading partners, but Australia. In July and August 2018, the US began imposing tariffs on $50 billion in Chinese industrial goods on the ground of unfair trade practices. As China has retaliated with tit-for-tat measures, President Trump has imposed tariffs on $200 billion in Chinese goods from 24 September 2018 onwards, and in an unprecedented escalation of his trade war with China, he has also threatened to impose tariffs on an additional $267 billion in Chinese goods. If eventually carried out, Trump’s latest threat could result in tariffs on all Chinese goods entering the US. China has retaliated and imposed tariffs on $60 billion in US goods, including a 10% duty on liquefied natural gas (LNG). For the time being, trade tensions have had a limited impact on the energy market. But the new round of US tariffs and retaliation measures by China suggest that this is going to change.
Topic:
Climate Change, Energy Policy, International Trade and Finance, Gas, Renewable Energy, and Coal
Political Geography:
China, Asia, North America, and United States of America

7. Everything You Think You Know About Coal in China Is Wrong

Author:
Melanie Hart, Luke Bassett, and Blaine Johnson
Publication Date:
05-2017
Content Type:
Policy Brief
Institution:
Center for American Progress - CAP
Abstract:
China’s energy markets send mixed signals about the nation’s policy intentions and emissions trajectory. Renewable energy analysts tend to focus on China’s massive renewable expansion and view the nation as a global clean energy leader; coal proponents and climate skeptics are more likely to focus on the number of coal plants in China—both in operation and under construction—and claim its climate rhetoric is more flash than substance. In December 2016, the Center for American Progress brought a group of energy experts to China to find out what is really happening. We visited multiple coal facilities—including a coal-to-liquids plant—and went nearly 200 meters down one of China’s largest coal mines to interview engineers, plant managers, and local government officials working at the front lines of coal in China. We found that the nation’s coal sector is undergoing a massive transformation that extends from the mines to the power plants, from Ordos to Shanghai. China is indeed going green. The nation is on track to overdeliver on the emissions reduction commitments it put forward under the Paris climate agreement, and making coal cleaner is an integral part of the process. From a climate perspective, the ideal scenario would be for China to shut down all of its coal-fired power plants and switch over to clean energy full stop. In reality, China’s energy economy is a massive ship that cannot turn on a dime. The shift toward renewables is happening: China’s Paris commitment includes a promise to install 800 gigawatts to 1,000 gigawatts of new renewable capacity by 2030, an amount equivalent to the capacity of the entire U.S. electricity system.1 While China and the United States have roughly the same land mass, however, China has 1.3 billion people to the United States’ 325 million.2 It needs an electricity system that is much larger, so adding the renewable equivalent of one entire U.S. electricity system is not enough to replace coal in the near to medium term. To bridge the gap, China is rolling out new technologies to drastically reduce local air pollution and climate emissions from the nation’s remaining coal plants.
Topic:
Climate Change, Energy Policy, Natural Resources, Green Technology, and Coal
Political Geography:
China and Asia

8. Another Energy Competition in Northeast Asia Coal Policies of South Korea and Japan in Comparative Perspective

Author:
Eunjung Lim
Publication Date:
04-2012
Content Type:
Journal Article
Journal:
Joint U.S.-Korea Academic Studies
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Northeast Asian countries compete against one another in order to procure natural resources from abroad. Moreover, competition surrounding energy-related technologies is getting overheated in this region. It would be worth paying attention to energy competition between South Korea and Japan, so we can better understand energy security in Northeast Asia by comparing South Korea’s and Japan’s energy strategies. This paper examines how important coal is in the two countries’ economies and why coal has become so important . It also analyzes the similarities and differences of their coal policies, especially focusing on policy trends and prospects related to Clean Coal Technology. This paper will warn of another hot competition among the countries in this region and suggest multilateral cooperation.
Topic:
Natural Resources, Coal, Energy, and Competition
Political Geography:
Japan, Asia, and South Korea