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AB 2000 studies

Alain Boublil Blog

 

The China energy transition

Two events give a good illustration of China determination to transform its energy model and of the followed orientations to improve the population quality of life and to bring its contribution to the reduction of greenhouse gas emissions, according to the country commitments regarding the Paris Agreement. Some days ago the second Taishan EPR power plant has been put in operation in the south of the country. It is run through a partnership between EDF and its long time associate, CGN, with whom the French utility has strong relationship for more than thirty years. Next, in October, the natural gas pipeline coming from Siberia will be operational, bringing natural gas in China northern regions. Beijing finds, in doing that, alternative solutions to coal in its power production because that fossil fuel is the main culprit for the CO2 accumulation in the atmosphere and, atop of that, has disastrous effects on wealth through the issuance of particles around the installations.

Emerging countries, including China and India, due to their economic backwardness and to the necessary strong growth to make it up, contribute more than the others nations to make worse climate threats. But they rightly put forward that it is the CO2 inventory in the atmosphere which generates climate warming and that it is developed countries which during the past, were at the origin of this accumulation. They wouldn’t have to do the same efforts. Developed countries, with a large majority, have accepted this principle. So China will to stabilize and as soon as possible to reduce its emissions is even more remarkable.

The adopted policy is the systematic reduction of the use of coal in power production. It is efficient since it is what has allowed the U.S., for four years to reduce their own emissions. The natural gas price fall due to the put in exploitation of shale gas resources has incited American utilities to shelve their coal power plant and to activate their gas-powered ones. The progressive exit from coal in China creates nevertheless heavy social problems because it concerns hundreds of thousands of miners, many of them living in the Shanxi province. But the new policy has been lauched. A hundred of mines producing less than 300 000 tons a year have been closed, including 18 in Shanxi. New technologies able to extract natural gas from coal mines are also put into experiment.

To offset the reduction of coal share, there is first nuclear power. Along with the two EPR, two power plants using Chinese technology, Hualong 1 and 2 would come into activity during the next two years. With 47 reactors in operation, China is nearing France and targets to produce 10% of its power in the future from 5% now. But the most spectacular effort regards natural gas, to produce power as to supply household and to replace wood and coal in cities. Annual consumption went from 90 to 281 bnm3 in ten years and a new 10% increase is expected in 2019. To cope with that, the country has had to take up a triple challenge. It strongly increased its own production and, along with traditional gas fields, shale gas production has started with a production of 10 bnm3 in 2018 in the Fuling field located in the Sichuan province, whose reserves are evaluated at 600 bnm3. But the production level is by far inferior to the local demand and to satisfy it, Chine has multiplied GNL terminals dedicated to Australia and Middle East producers and has financed the construction of gas pipelines carrying the fuel from Central Asia, Myanmar and since next autumn from Siberia.

But the most delicate challenge, which is not completely taken up concerns storage and distribution. As natural gas consumption is very volatile according to the periods of the year, especially for domestic uses, heavy investments are still to be achieved to avoid cuts as it still happens too frequently in the big cities of the north-east of the country.

At last, the effort so frequently put forward in Western countries in favor of renewables, hydraulic, wind and solar, is spectacular if we consider production capacities put into operation but due to their high intermittence, these sources are still low regarding primary energy consumption, 9% for hydraulic and 4,25% for cumulated solar and wind. It remains that China, through its 135 bn$ investments in the energy sector alone per year, is among these, in the world, which have devoted the most important resources.     

The energy transition policy is also developing itself in transportation with the electrification of the car sector, which has known a very strong increase, to the opposite to what we see in Europe. Preoccupation is mainly about the fight against local pollution provoked by the real explosion of the urban traffic, which generates particles hurting health. If that has not been the case and due to the composition of the power mix of the country still largely dominated by coal, that wouldn’t have had any sense to incite household to make this choice. In many cities, local authorities have imposed the acquisition of electric vehicle to obtain a registration. These measures have not been badly welcomed because the utilization of vehicles is quite different from what we observe for instance in France or in Germany. In China, long trips in car are almost non-existent. Inside the country, to meet their families living in rural areas Chinese people take trains. And travels for tourism are made by air transportation because destinations are islands, as Taiwan or Hainan, or a very far country. The electric car autonomy issue, which is highly dissuasive in Europe, is not a problem in China. But that development gives an industrial and technological know-how which put the country in advance compared to its Western competitors. That will not be without consequences on the future of the European industry when obstacles coming from the low autonomy of vehicles will have been lifted.

China determination to manage its energy transition is as strong as its willingness to reorient its growth model. The reduction of the heavy industries share and the development of services are quite compatible with the transformation of the power mix reducing significantly the share of coal and offsetting it by the growth of natural gas, nuclear and renewable. The pursuit of urbanization is going along with investments in transport and distribution networks of natural gas and electricity, with certainly technological progress to be expected in consumptions optimization. The country has shown in the past its innovation capacity. The point that it put it to the service of the fight against climate warming is good news.

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