China Scores Some Climate Wins, But Energy Demand Growth a Risk

(Bloomberg) -- China’s clean power and electric vehicle sectors are on track to meet ambitious climate targets, but rapid energy demand growth and continued coal investments risk derailing the progress.

Several indicators were on pathways aligned with the Paris climate agreement, the Centre for Research on Energy and Clean Air said in a report published Monday. Electric vehicle sales, electrification and building sector emissions are all on track, and clean energy investments were nearing the scale needed to hold temperature rise within 1.5C of pre-industrial times, the researchers said. 

That good work could be undone if energy consumption -- particularly coal use -- continues to grow rapidly, which had been the case until the slowdown this year, according to the report. Even with the easing of economic growth, energy demand is outpacing the supply of clean electricity this year because of a drought-induced drop in the output of hydropower.

China needs to either improve energy efficiency, shift to a more sustainable economic growth model, or boost its clean energy investments even further, the centre said.

Much of the hard work to stay on track with the renewable power targets has been due to a massive solar panel manufacturing supply chain that China has helped cultivate.

Longi Green Energy Technology Co., the world’s largest solar company by market capitalization, expects China will install 150 gigawatts of solar panels next year, nearly triple the record in 2021, Morgan Stanley said in a note after a summit with the company.

On the global front, Longi sees installations of panels reaching 400 to 500 gigawatts next year, with manufacturers able to make even more panels than that, according to the note. That’s more than the 316 gigawatts that BloombergNEF is forecasting for 2023.

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