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By Mark Golden
China and India are aggressively investing in wind and solar power, which are displacing a perhaps surprising amount of coal-fired electricity production in those countries, according to two senior executives of renewable companies in the countries.
From 2008 through 2018, China’s use of renewable energy – excluding hydroelectricity – grew 33 percent annually, according to BP’s Statistical Review of World Energy. Over that same period, China’s coal consumption has grown 1.7 percent per year, well below its economic growth. In India, renewable energy was growing 17 percent per year 2008 through 2018, with coal consumption at 5.5 percent. Use of renewables has grown at a slower pace of late in both countries, while coal use in India last year was flat.
“When I talk to the CEOs of Chinese big utility companies, most of them already realize a coal plant is going to become a stranded asset,” said Lei Zhang, chief executive of Envision Group, a Chinese company that sells wind turbines around the world.
Zhang, speaking at Stanford University’s Global Energy Dialogues, on August 18 added that the only reason the Chinese utilities are still building a few coal-fired power plants is because in combination with renewable power the utilities can export excess electricity profitably.
“Renewable energy certainly in India and as we all know in many parts of the world has now become cheaper on a pure cost of generation basis than any other form of energy of electricity,” said Sumant Sinha, chairman and managing director of ReNew Power, an independent renewable power producer in India. “It’s certainly cheaper than coal.”
Still, China and India together account for almost two-thirds of the world’s coal consumption. While both executives would like to see that number decline, they said that greenhouse gas emissions in their two countries per person remain a small fraction of emissions per person in developed economies, especially the United States.
Given India’s continued rapid economic growth and the even greater growth in electricity use, Sinha said, just maintaining renewable’s share of the power sector is a challenge. Acquiring land, and building new solar and wind power facilities is difficult. Coal-fired power plants now often idle will be forced to run more over the next few years, he said.
No climate vaccine
Both of the guests were quite dire when asked by an audience member if it is already too late to address the climate crisis.
“We've kind of missed the bus on one and a half degrees some time ago,” said Sinha, referring to a goal to limit the global temperature rise. “We’ve probably also missed the bus on two degrees, and I think we're fighting a losing battle right now for a three degree centigrade temperature change.”
“But, we have to do as much as we can,” Sinha added, “because otherwise we're going to be looking at even more dramatic consequences.”
Earlier in the discussion, Zhang had compared climate change to the COVID-19 pandemic in that getting ahead of the virus quickly is the key to containing it before it spreads out of control. That strategy, he said, is even more critical for climate change.
“For COVID-19 luckily we are able to develop a vaccine,” Zhang said. “However, there is no vaccine for climate crisis.”
“According to scientists, we're almost running out of time,” he said later in response to the audience member. “Still, we should never give up. We still have chance.”
Governments in both countries are incentivizing more sustainable energy consumption and generation.
“China has 3.3 million electric vehicles on the road, which is roughly equal to that in Europe and the U.S. combined,” he said.
The government continues to give provinces quotas for building renewable power facilities. Jiangsu Province, will build 50 gigawatts of renewable capacity over the next five years, said Zhang. Over that time they will build two gigawatts of coal-fired power, and that is just as back-up power for renewables. The motivation to build renewables at the provincial level comes from targets set by the central government, Zhang said, adding that ever cheaper energy storage technologies will replace coal as the back-up resource.
Both countries are also introducing market reforms to allow easier trade of electricity as well as incentives for customers to cut back when supplies are tight. Neither of the executives expect new nuclear power plants to be built in their home countries, because they are too expensive compared with renewables.
The next Global Energy Dialogues session on Sept. 15 will feature Anne Finucane, vice chairman at Bank of America, discussing sustainable finance with Richard Kauffman, chairman of the New York State Energy Research & Development Authority. Global Energy Dialogues are free and open to all. Registration is required at gef.stanford.edu.
The Global Energy Dialogues are produced by Stanford’s Precourt Institute for Energy and funded by the Stanford Global Energy Forum.