馃攳
How China Plans to Win the Future of Energy - YouTube
Channel: Bloomberg Quicktake: Originals
[3]
China's appetite for energy is enormous.
[6]
The country consumes about a quarter
[8]
of the world's energy supply,
[10]
35% more than the U.S. annually.
[13]
Its energy needs have more than
tripled since the year 2000.
[17]
That consumption has helped
to fuel astonishing growth,
[21]
but it's come at a cost.
[23]
China is the world's largest
greenhouse gas emitter.
[26]
There is no way to tackle climate change
[28]
unless China reduces its
emissions to net zero.
[31]
The country's reliance on
fossil fuels is also a hindrance
[35]
to its own growth and the
wellbeing of its citizens.
[38]
China is not energy secure.
[40]
It has a massive import bill
for things like oil and gas.
[44]
It has a longstanding pollution problem,
[46]
and it is also prone to outages
[48]
that severely hamper industry.
[51]
All this has led the
world's biggest polluter
[53]
to take steps towards a
radical transformation.
[58]
President Xi Jinping outlined his plans
[60]
to make China carbon neutral by 2060.
[65]
COVID 19 reminds us that humankind
[67]
should launch green revolution
[69]
and move faster to create
a green way of development.
[73]
China's high level goals
are that within this decade
[76]
it's going to peak its carbon emissions.
[78]
And then it's going to
go to net zero by 2060.
[82]
So that gives it approximately 40 years
[85]
to do something that no
country has achieved,
[88]
let alone something
like the size of China.
[91]
As the world starts to turn
away from fossil fuels,
[94]
China is positioning itself
as the king of clean energy,
[98]
not only transforming
its own energy system
[100]
but also building a supply
chain that could leave the world
[103]
uncomfortably dependent on
China for its energy needs.
[107]
China has really expanded its grip.
[109]
So it's the processing,
it's the manufacturing,
[111]
it's all the way down to your
EVs and your battery packs.
[114]
How the West deals with that,
[116]
they're going to have
to be a bit creative.
[118]
What China plans to accomplish
[119]
by 2030 could determine the shape
[122]
of the global energy system of the future.
[133]
At the end of the last
century, China was on the cusp
[135]
of an economic revolution.
[138]
In 1990, its GDP was
only 6% that of the US,
[143]
and its energy use was only 34%.
[147]
But the economic reforms
of the '80s and '90s
[150]
started the process of
privatizing industry,
[153]
and opening up to trade
with the rest of the world.
[156]
By the time it joined the World
Trade Organization in 2001
[159]
China was well on its way to
becoming the world's factory
[162]
with booming energy needs to match.
[165]
The history of it is really dramatic.
[168]
I think just the condensation,
[169]
really China is doing
industrial revolution
[172]
a hundred years after that,
[173]
all of that in a very
concentrated period of time.
[176]
So what we saw is obviously
dramatic change in terms
[179]
of energy consumption, and
there were power crunches
[182]
in the early years, really
the system was still
[184]
trying to cope. Dramatic
addition of coal fired plants
[187]
in particular to deal with that.
[189]
From a climate perspective,
the position was,
[192]
well, you had your
turn, now it's our turn.
[195]
When you were growing, you as the West,
[197]
there was no question of
what carbon was doing.
[200]
You did whatever you
wanted, now it's our turn.
[203]
That really changed in 2008, 2009.
[205]
And that coincides with an
awareness of air pollution.
[209]
In Beijing, which is
facing another smoggy day.
[212]
Some environmentalists say it
is the worst air on record.
[218]
Beijing was famously
the most polluted city
[221]
in the world for almost a decade.
[224]
It also became very clear
to its leadership that
[227]
that kind of growth will be unsustainable,
[230]
not just from a fact of
putting out lot of emissions,
[234]
but from a fact that much of
the fossil fuel consumption,
[237]
for example oil and natural
gas will have to be imported.
[241]
And that's something China
wanted to walk away from.
[245]
So starting about 2010,
China committed to increase
[249]
its deployment of renewables.
[251]
China, like many other places
in the world, was faced
[255]
with initially very
non-competitive on a cost basis
[258]
economics for solar
projects, for wind projects
[263]
and being able to
subsidize the manufacture
[266]
of the key components,
[267]
ensuring the power that they
sell has an attractive rate.
[270]
All of these things, China
has done very, very well.
[274]
You push the market into existence
[277]
and then you're able to pull back
[278]
with some of the policy mandates
[280]
because now it just makes
good economic sense.
[283]
China's investments in
renewables helped drive
[285]
astonishing price drops
across the industry
[288]
leading to record levels of new
wind and solar installations
[291]
all over the world in recent years.
[294]
Last year, wind and solar
generated more than 10%
[297]
of the world's electricity.
[300]
Still renewables only
make up a tiny fraction
[303]
of China's energy mix today.
[305]
China is overwhelmingly
dependent on fossil fuels
[308]
at the moment.
[309]
And within that if you
look at power generation,
[311]
it's overwhelmingly coal, roughly 60%.
[314]
Wind, biomass, solar remain a
much, much smaller fraction.
[321]
There was pressure building up on China
[323]
for quite a few years that
China needs to do more
[326]
to cut emissions.
[328]
And that finally sort
of came together in 2015
[333]
at the Paris Agreement when
China agreed to sign it
[336]
alongside the US and pretty much
[338]
every country on the planet.
[339]
That bit of diplomacy
was crucial to take China
[343]
to the next stage, which is
when in 2020, it declared
[346]
that it will set a net zero goal.
[349]
And in a way it was a coup for China
[351]
because it set that goal even before
[354]
the US could have done so.
[356]
China's decarbonization
plan ramps up gradually
[359]
with fossil fuel emissions increasing
[361]
for a few years before peaking in 2030.
[365]
From there they've given
themselves another three decades
[367]
to get to net zero, with 80% of energy
[370]
coming from carbon free sources by 2060.
[375]
Getting there will be
a massive undertaking,
[377]
and it starts with renewable megaprojects
[380]
on a scale seen nowhere else on Earth.
[383]
So late in 2021, we took a
reporting trip to Qinghai
[388]
in western China.
[390]
It's quite wind swept.
[392]
It's a very sunny part of the world.
[394]
Very low population density.
[397]
We went to a facility that was spread out
[400]
over 600 square kilometers,
about the size of Singapore.
[436]
In that facility, they have a hydro dam,
[439]
they've got a massive solar buildup,
[441]
and they're adding wind
installations as well.
[444]
When all of that is up and running,
[446]
it's going to be producing
nearly 20 gigawatts of energy.
[451]
It's enough to cover the power needs
[453]
at any given time for Israel, for example.
[456]
By 2030 China plans to up to 1.2 terawatts
[461]
of wind and solar capacity, enough to meet
[463]
all of the US' electricity needs today.
[467]
But it's not enough just
to generate that power.
[470]
Getting the power where it needs to go
[472]
is a mega project in itself.
[488]
In order to ship all that electricity,
[490]
China has basically
built this huge network
[493]
of ultra high voltage power lines.
[496]
And they're designed to
get all of this energy
[498]
from the west to where it's needed
[500]
in the population and
industrial centers of the east.
[504]
Power lines might seem
like a mundane piece
[506]
of infrastructure, but they're
actually a crucial piece
[509]
of the decarbonization puzzle.
[511]
A conventional AC power cable
loses a lot of electricity
[515]
over the course of hundreds of miles.
[517]
Hence the need for these
specialized direct current lines.
[521]
What they do is they reduce
the wastage that may happen
[525]
on the way to transport this electricity.
[528]
There are only two
countries in the world where
[530]
these cables are operating,
China and Brazil.
[534]
Brazil has two of those
cables, China has 25.
[538]
By far and away, China is
absolutely the leader on this.
[542]
And the amount of money
that you're talking about,
[544]
I mean, it's hundreds
of billions of dollars
[546]
that they're going to be spending
on this in coming decades.
[551]
As China goes towards a net zero goal,
[553]
its leadership has recognized
that there is no way
[555]
China can meet those goals
[557]
without having what's
called firm clean power.
[562]
The idea of firm clean
power is that you're able
[564]
to generate carbon free
electricity when you want it,
[568]
rather than relying on when the sun shines
[570]
or the wind blows.
[572]
Nuclear power satisfies
those conditions quite well.
[576]
In most countries, the nuclear
industry is struggling,
[579]
facing huge upfront
costs, regulatory hurdles
[582]
and negative public opinion.
[585]
Still it is a carbon free
source of reliable power,
[588]
and many environmental
advocates see it as a key
[590]
to the green transition -
as does China's leadership.
[594]
China plans to build 150 new
reactors in the next 15 years
[600]
which is more than what
the entire world has built
[602]
in the last 35 years.
[605]
Nuclear isn't seen as
controversial in China,
[608]
or at least we don't know if it is.
[610]
It's not clear whether
China's own population
[614]
supports it or opposes it
[615]
because they're not allowed to protest
[617]
and show their opposition
to a certain technology.
[621]
That still leaves the
difficult economics of nuclear,
[624]
the high upfront cost of
building new reactors.
[628]
Here too, China may
have unique advantages.
[631]
One thing that we all know
China really excels at doing
[635]
is building huge infrastructure quickly.
[639]
After decades of building
bridges and skyscrapers,
[642]
and high speed rail, and
ultra high voltage lines,
[644]
like every super massive
industrial project
[647]
that China has built, that
know-how goes into also building
[650]
nuclear power plants.
[652]
When you build projects
consistently on schedule
[655]
and on budget, you actually
get to realize the benefits
[659]
that were imagined back when
the project was being planned
[662]
like stable, low cost electricity
[664]
at a certain rate, at a
certain production cost.
[670]
China's efforts to decarbonize are likely
[672]
to have many positive effects
on its domestic energy supply.
[676]
But that's not the only
reason China has gone all-in
[679]
on clean energy.
[681]
China certainly wants
to meet a net zero goal,
[684]
but it also wants to be
a country that is making
[687]
a lot of money exporting the technologies
[690]
that will clean up the
energy system globally.
[694]
China is incredibly
important when we think about
[698]
the supply chain for green
technology in general,
[701]
the green economy, whether
that's solar panels, or turbines,
[704]
or the elements that you need to process
[706]
along the way, incredibly significant.
[709]
China basically accounts for something
[711]
like 75% of the world's
supply chain for solar.
[716]
Anything that you're going to
do in the States or in Europe,
[719]
I mean, at some point Chinese companies
[722]
will have been involved in this.
[724]
That dependence on China has lately been
[727]
a source of strain.
[728]
Last year, COVID related
production issues in China
[731]
caused the price of of
solar panels to rise
[733]
for the first time in decades.
[736]
And some companies have pledged
[737]
to take their business elsewhere
[739]
due to reports of human rights abuses
[741]
in the majority Uyghur
province of Xinjiang
[744]
which produces most of
the world's polysilicon,
[746]
a key material in the
manufacturing of solar panels.
[750]
Obviously there have been
accusations in the west
[753]
that the Uyghurs are
subject to forced labor.
[757]
The industry and the Chinese
government have denied this.
[761]
Some in the west are also concerned
[763]
about China's dominance over the materials
[765]
needed to make lithium iron batteries.
[768]
Cobalt, for example, is a
scarce mineral produced mainly
[771]
in the Democratic Republic of Congo
[773]
where China has bought
up most of the supply.
[778]
The Congolese government
has recently pushed back
[780]
against those efforts, alleging
poor working conditions
[783]
and unpaid debts by a
Chinese mining company.
[786]
But the majority of
cobalt-producing mines there
[789]
are still at least part Chinese-owned.
[792]
Crucially what China's
done is it's also made
[796]
the processing of these
metals into the chemicals
[799]
that eventually go into
batteries an almost monopoly.
[803]
The processing capabilities of China
[806]
outstrip those of all the
rest of the world combined.
[810]
I think any kind of excessive
dependency is problematic,
[814]
and energy dependency is no different.
[817]
Think about Europe, Europe's
dependency on Russia for gas,
[820]
how problematic that has been.
[823]
So if we're going to have
that the West as dependent
[826]
on China for renewable energy,
for green economy ingredients
[830]
it is not going to be a healthy situation.
[835]
My instinct is that
these things are not done
[839]
for a nefarious purpose, right?
[841]
To dominate the supply chain
[842]
in a way that is disadvantageous
to another country.
[846]
But, you know, that the
primary consideration
[849]
is what is good for China.
[852]
I mean, remember we're
coming from a period of
[854]
not so long ago, late '90s, early 2000s
[857]
when China had rolling
blackouts all the time,
[859]
and we've got all this investment
[861]
into making sure it can't happen again.
[865]
From the way people talk about it here,
[868]
they believe in the
mission and the mission is
[871]
stable, secure energy
for the Chinese people.
[876]
Electricity rationing is being imposed
[878]
in more than half of China's provinces.
[881]
Power shortages are still ongoing.
[884]
I think we've got a count of 20 provinces,
[886]
where there are electricity curbs.
[889]
Recently, China has been having flashbacks
[891]
to the bad old days of
blackouts and power rationing.
[895]
A sudden spike in the price of coal
[897]
led to widespread power shortages,
[900]
leaving the government little choice,
[901]
but to rational electricity
and ramp up coal production.
[905]
It's indicative of a major flaw
[907]
in China's decarbonization plan:
[910]
even as they add world
historic levels of renewables
[913]
they largely cancel out those gains
[915]
with new fossil fuel additions.
[917]
And so this is the central challenge
[919]
because as your economy grows,
[921]
and even as you add all of
this renewable capacity,
[925]
you still need to make sure
that the coal supply is flowing
[928]
in order to keep the lights on.
[930]
That's going to be the big
challenge for policy makers.
[934]
Even China's world leading investments
[936]
in carbon-free energy
[937]
may not get them to their targets on time.
[940]
But Beijing has recognized
that the economic, political
[943]
and environmental rationales
[945]
for clean energy now
vastly outweigh the costs.
[949]
When it comes to the
2060 neutrality target,
[951]
obviously China's a long way off,
[954]
and it's a huge, huge, audacious target.
[957]
The people that are the top
leaders that are planning it
[959]
out right now, they probably
won't even be around
[961]
to see it, right.
[964]
Will they make it?
[967]
I don't know.
[968]
It's a huge, huge goal,
[969]
but they believe they're going to make it.
[972]
What I can tell you is they're
certainly going to try,
[974]
and they're certainly going to spend a lot
[975]
of money trying to get there.
Most Recent Videos:
You can go back to the homepage right here: Homepage