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15/10/2024
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China could accelerate clean energy transition with strong coal phase-out mandate

Implementing a robust mandate to phase out coal power before 2045 could allow China to achieve a “positive tipping point” where clean energy becomes cheaper than fossil fuels, potentially advancing the country’s zero-emission goal by three years, according to climate expert Simon Sharpe.

Sharpe, the director of S-Curve Economics, a UK-based non-profit research organization, emphasized that such a mandate would be more impactful than current carbon trading markets and renewable energy subsidies. However, he noted that it would necessitate significant structural changes to China’s power system and economic model. “There’s no reason to believe that China couldn’t phase out coal and transition to a nearly zero-emission power system by the mid-2040s,” he stated.

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Earlier, China announced a nationwide “phase down” of coal starting in 2026, aiming for 80% of its energy mix to come from non-fossil sources by 2060. Sharpe suggested that the country should redirect investments from fossil fuels to bolster clean energy initiatives and create targeted policies for zero-emission industrial production, particularly in sectors like steel.

His perspective aligns with a recent report from the University of Exeter and the Climate Group, which urges global governments to adopt regulatory mandates to limit global warming to below 1.5 degrees Celsius and to halve carbon emissions in the next five years. Recommended mandates include a coal phase-out in developed economies by 2035 and a similar target for developing nations by 2045. Additionally, the report calls for 100% zero-emission vehicle sales by 2035 and 100% zero-emission truck sales by 2040.

Such measures could ensure that clean energy becomes more affordable than fossil fuels globally, potentially three years earlier than anticipated. The report underscores that phasing out coal is the most powerful initiative for accelerating the clean energy transition in various countries.

Tim Lenton, a professor at the Global Systems Institute at the University of Exeter, highlighted the urgent need for economic and societal transformations to significantly reduce prices and carbon emissions. He called for rapid implementation of mandates, warning that failure to act could lead to severe human and economic costs.

As the world’s largest polluter and biggest coal producer, China plays a crucial role in the fight against climate change. The country, which is also the leading user of solar and wind energy, achieved its 1,200-gigawatt solar and wind capacity target six years ahead of schedule last month. Nevertheless, as of last year, clean energy only accounted for 26.4% of China’s total power consumption, with coal making up about half.

Sharpe pointed out that significant challenges remain, such as the lack of long-term energy storage systems to support intermittent solar and wind energy during adverse weather conditions. Additionally, he noted the need for improved connectivity between regions rich in renewable resources and those that lack them.

The reluctance to quickly transition away from coal, due to economic and job concerns, poses further obstacles. “In the power sector, the shift to clean technologies is clearly underway in China and globally,” Sharpe remarked. “Focusing on expanding jobs and supply chains around new technologies makes more sense than clinging to jobs in an increasingly uncompetitive sector.”

While China operates a carbon pricing system through its emissions-trading scheme, Sharpe described the current price as likely too low to significantly reduce coal power usage. He recommended introducing a carbon floor price, effectively a tax high enough to render the most polluting coal plants unprofitable, thus phasing them out.

Additionally, Sharpe mentioned that the recent “coal capacity-payment mechanism” allows coal plants to receive fixed payments based on capacity rather than electricity generated, designed to aid the transition and support variable renewable energy sources. He suggested incorporating clean technologies like energy storage into this mechanism, enabling coal plants to compete for payments with other technologies, thereby accelerating the transition to clean energy.

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