China

Pursuing low-carbon growth policy at unprecedented scale

China has pursued aggressive climate and energy policies with particular focus on energy efficiency and renewable energy. Still, between 2000 and 2010, China represented 68% of the increase in global energy-related CO₂ emissions.

sectorPower

These graphs show the changes in emissions, emissions drivers, and policy in the Power sector in China

 
 
 

Emissions Greenhouse gas emissions and generation


Electricity generation and the associated CO₂ emissions increased significantly in the past three decades, with generation growth accelerating significantly in the tenth Five Year Plan (2001-2005). Since 2006, the growth in power demand has slowed slightly with CO₂ emissions following suit.

     
     
     
     

    Emissions Drivers Fuel sources for power generation


    The vast majority of increased generation came from conventional sources, primarily coal. However, the past decade saw exponential growth in low-carbon fuel sources, such as renewable energy, although this energy represented a very small portion of overall electricity production.

       
       
       
       

      Policy Total installed capacity targets


      Policy encouraged increased renewable energy deployment through a mix of generation targets.

         
        • China increased and diversified its power supply in the 1980s while focusing on energy efficiency improvements. China took first steps towards building an initial institutional framework for environmental protection.

          • Policy Barriers

            • State Council announced Promotion of Small Hydro Power for Rural Electrification Policy, 1983
            • Nuclear licensing and regulatory body National Nuclear Safety Administration (NNSA) established, 1984
            • Electricity sector reforms in mid-1980s (Qui 2012)
              Opened up non-government investment in powerplants
              Government maintained full control of transmission
            • Small Coal-Fired Plants Development Provisions, 1986
            • Energy Ministries’ assets corporatized to state-owned enterprises
              Ministry of Petroleum Industry converted to China Petroleum and Gas Corporation (1988)
              Established China National Offshore Oil Corporation (CNOOC) (1982)
            • Air Pollution Prevention and Control Law of 1987 laid broad framework for regulation of air pollution (2001)
            • National Environmental Protection Agency established, 1984
          • Underlying changes

            • Reform and Opening Up Policy of 1978 introduced economic incentives and some competition
            • Domestic market began to open to global competition and imported technologies (Rosen 2007)
            • Increased railway construction between western coal production provinces and coastal areas
        • As China’s power supply grew and diversified, the government began programs to close small coal-fired power plants, but coal continued to dominate the energy supply. The corporatization of state power-related assets began.

          • Policy Barriers

            • Government-set coal price transitioned to government guidance on coal price, 1993
            • National Electric Power Law of 1995 reiterated encouragement for private and foreign investment in the power sector
            • State Planning Council supported domestic/foreign joint venture to develop wind power technology, 1996
            • Energy ministries’ assets corporatized to state-owned enterprises
              Ministry of Electric Power converted to State Power Corporation, 1997
              China Petroleum and Gas Corporation converted to Sinopec and China National Petroleum Corporation (CNPC), 1998
            • Closure of Small Coal-Fired Power Plants, 1999
            • Air Pollution Prevention and Control Law amended, 1995
            • National Environmental Protection Agency upgraded to State Environmental Protection Administration (SEPA), 1998
          • Underlying changes

            • Nuclear power generation began
            • Three Gorges Dam hydroelectric project (22GW) began construction, 1992
            • Became net importer of oil, 1993
            • Energy shortage early 1990s:
              Small self-use industrial power generators boomed.
            • 1997 Asian financial crisis contributed to small coal-fired plant closures in late 1990s
        • China continued its corporatization of state assets. Balancing demand and supply became a key challenge as economic growth continually outpaced expectations. After marked increases in carbon intensity in the early 2000s, the late 2000s brought new emphasis on renewable energy and re-emphasis on energy conservation, along with a rapid improvement in the average efficiency of coal fired power plants.

          • Policy Barriers

            • Air Pollution Prevention and Control Law amended, 2000
            • Electricity System Reform to introduce competition, 2002
              State Power Corporation split into several companies
              State Electricity Regulatory Commission established, 2003
            • Major coal and power corporations allowed to spin out publicly listed subsidiaries
            • Electricity Price Reform Plan of 2003 deregulated generation and sales prices
            • Established Coal and Electricity Price Linkage Mechanism, 2004
            • Coal price liberalization, 2006
            • Renewable energy promotion
              Government financed wide range of renewable energy projects
              Renewable Energy Law, 2006
              Wind, solar PV, and bioenergy feed-in tariffs established in late 2000s
            • 11th Five-Year Plan, 2006-2010
              Small coal-fired power plant closure program, including new large plant construction contingent on small plant closures
              10% SOx emissions reduction target, including mandatory installation of scrubbers in many new plants
            • SEPA elevated to Ministry of Environmental Protection, 2008
          • Underlying changes

            • Power shortages
              2004-2005: power production capacity increase unable to meet surging demand
              Rail and port constraints became a major issue for supplying coal to generators
              Late 2000s: market coal prices higher than controlled electricity tariffs
            • Became net importer of coal
            • Coal-fired generator efficiency saw constant improvement throughout the decade, energy intensity decrease
            • Increasing residential electricity demand
            • Rapid increase in global coal prices
            • Beijing Olympics 2008