Government Goals in Renewable Energy Remains a Tough Challenge
The slowing economic growth paired with shrinking energy consumption means that meeting the government’s goal for renewable energy consumption remains a tough challenge as China energy sector is embarking on a restructuring program in the next five years. Top leaders in Beijing have gathered at the session of the Communist Party of China Central Committee in formulating proposals for the 13th Five Year Plan. Under the plan energy strategy will be intensely scrutinized due to the sector’s close connections with the economy and environment. China has pledged to increase the share of non fossil fuels in the primary energy mix up to 15 percent in 2020 and 20 percent by 2030.
Experts are saying that the program for the next five years is clear and the general thrusts will control coal consumption thus stabilizing the use of oil and gas, increase the use of wind and solar power while speeding up the energy pricing reform in support of the structural transition. A target is set to limit energy use to the equivalent of the annual use of 4.8 billion metric tons of standard coal by 2020. By taking a slower economic growth and weaker energy demand into account the target is not daunting as when it was set. Theoretically the government should be imposing restrictions especially on the use of coal and to press ahead with the transformation of the economic model but it will be a difficult strategy to accomplish.
Coal remains a competitive and convenient choice especially during a time when the industry is facing excess capacity. Energy use has increased by 45 percent in the past seven years up to 2013, as a result of the rapid economic growth in the country. This affected global energy demand and because China accounted for at least 23 percent of the total energy use in the world. Major coal consumers and industries such as steel, chemicals, power and building materials are facing overcapacity and are now more stringent environmental standards are released along with factors that are dragging down coal consumption.
Last year saw the first decline in the coal output in China after 15 years of consecutive growth and coal is still accounted for 666 percent of the country’s energy consumption. Both solar and wind power are enjoying a rapid expansion in the past couple of years and based on a recent medium term report on renewable energy, China accounts for 40 percent of global renewable capacity growth.