Coal left out in the cold as China shifts to clean energy

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While China suffers through the strongest cold stretch in three decades, partly due to record arctic warmth (source in Chinese), life is becoming colder still for the nation’s coal industry. In 2015 the industry suffered over 90 per cent losses, as the largest coal consumer shifted towards cleaner energy sources to control air pollution and build a resilient economy. Its coal fired power generation declined, by an estimated 2.8 percent last year, contributing to a two per cent drop in carbon emissions, while coal production fell 3.5 per cent and is expected to further decline in 2016 – especially after China allocated US$4.6 billion to close 4,300 coal mines. Coal imports also crashed by about 30 per cent, the biggest drop on record, which has “snuffed out the last flicker of hope” for large coal exporters, such as Australia. With China continuing to lead global renewable investment and clean up its economy, it appears the transition away from coal will only accelerate, yielding more economic, environmental and health benefits to China’s people.

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  • “This trend may continue for 3-5 years or even longer. Today’s figures are sending the strong signal of the clear acceleration of China’s energy transition. I think thermal [coal] power generation will continue to drop with an annual speed of 2-4% and the non-fossil power generation will stay in a high growth rate of 20%.” – Li Junfeng, director general at the National Climate Change Strategy Research and International Cooperation Centre, China
  • “China’s economic growth has decoupled from coal-fired power generation, and the increase in the service industry as a share of China’s GDP has also slowed demand.” – Dr. Yang Fuqiang, senior consultant on energy, environment and climate, Natural Resources Defense Council
  • “This telling import data confirms the last flicker of hope has been snuffed out, not least for Australia’s Galilee Basin. It also carries massive negative implications for Indonesia’s coal export market, given the concurrent collapse in Indian demand.The decoupling of economic growth and electricity demand is a key driver of the Chinese energy transformation and is being witnessed first hand.” – Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis (IEEFA)
  • “Great strides continue to be made in China in terms of growing clean energy investment and improving energy efficiency. This has significant implications for coal-fired power stations in China – in terms of utilisation rates and profitability – as well as for thermal coal miners that have made big bets based on seriously flawed projections of China’s future demand for imported coal.” – Ben Caldecott, Programme Director, Smith School of Enterprise and the Environment, University of Oxford
  • “If Australia is to navigate the rapid changes underway in the global energy sector we will need to build a net zero emissions economy. The Paris agreement, which for the first time committed all the countries in the world to ever-strengthening efforts to cut carbon pollution, built on actions already underway in the world’s biggest economies like China. China is successfully decoupling economic growth from a reliance on polluting industries. If our economy is to avoid being smashed against the rocks of stronger booming global investments in clean energy we must reorient the nation for zero-emission prosperity.” – Erwin Jackson Deputy CEO of The Climate Institute

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