China’s economic growth will cease without energy diversification: explosive new report

August 2, 2015 |

The global economic engine known as China will creak to a halt, tossing a big question mark into global economic growth, without energy diversification away from fossil energy, especially coal, according to new research from the University of East Anglia (UEA).

The study, published in the journal Technological Forecasting and Social Change, looks at the future of electricity supply in China and the issues it faces in reducing its carbon emissions – nationally China’s electricity sector accounts for more than half its total greenhouse gas emissions.

Lead researcher Dr Konstantinos Chalvatzis, of UEA’s Norwich Business School and the Tyndall Centre for Climate Change Research, said: “China’s energy sector is under pressure to achieve a secure and affordable supply while at the same time reducing its carbon emissions. There has been this long argument about whether China can give up coal because that would harm their supply security.

Other observers have pointed over the years towards the dwindling yield of energy per tonne of coal recovered, indicating that China’s coal reserves are depleting in quality as well as quantity, raising the prospect of spiking energy prices even if there is no diversification away from fossil energy over emissions and air quality concerns.

“China’s rapid growth rate presents a challenge as well as an opportunity for the country’s energy future. The challenge is to secure increasing energy supplies while maintaining a decarbonisation path. In contrast, the opportunity lies in transforming the historical coal lock-in into a diversified and secure energy supply system that will fuel the Chinese economy for the years to come.”

China is the world’s largest consumer of coal and its electricity sector is the largest single source of coal demand, consuming approximately half of the country’s coal. Electricity consumption continues to grow rapidly, reaching a growth rate of 7.2% in the first three quarters of 2013, while electricity production for the same period grew at 6.8%.

Dr Chalvatzis said: “Policy makers must design a path that will be influenced by the international energy prices and the role of technological ‘dumping’ caused by China or other countries. In this process climate policy, its effect on energy prices and their subsequent consequences for the well-being of the global economy will also need to be considered.

“The success of China’s decarbonisation path is keenly observed by the international community. The capacity of the Chinese Government to commit to international emission targets is linked to its capacity to achieve these targets without compromising its energy supply security and development prospects.”

“We recommend that the Chinese Government continues to work towards two main objectives. First, increase the share of renewable energy sources, such as wind and hydro-power, in the fuel mix and as a result maintain high energy independence. Secondly, improve diversity in the fuel mix. If imports are necessary, prioritise non-coal fuels, such as nuclear fuels and natural gas. These two objectives will improve electricity supply security while allowing China to decarbonise its economy.”

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Category: Research

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