China to turn curse of coal to gospel of clean energy revolution

A new age has dawned again. It is defined by a few prominent characteristics - cascading crises, accelerated mass extinction, adaptivity and resilience, pivotal and reset. And very importantly, it is represented by a collective species-level reckoning and action towards carbon neutrality by mid-century.?

China and Chinese people have made the commitment of capping emissions before 2030 and then achieving carbon neutrality before 2060. This is not only aligned with the Paris Agreement 1.5C target, but also perfectly aligned with a global shared and common aspiration and destiny to accelerate a transition towards a clean, smart and zero-carbon energy future.?

And yet, China accounts for about one third of global emissions. With its energy today still heavily relying on coal, to a certain extent, China holds a key of make-it-or-break-it for humanity collectively to succeed in tackling the global warming challenge.?

One year apart since the Chinese President announced this 30-60 dual target at UN last year, the clarity and certainty of policy direction has triggered a nationwide frenzy to race to carbon neutrality.?

- While some leading companies and regions have announced their own carbon neutrality targets, some other regions geared up their rush to raise emissions, naively thinking that they would enjoy more quota of emissions when caps are set.?

- The stock markets reacted in favor of those companies clearly linked with such a clean energy revolution, while new VC and PE funds are set up in the name of carbon neutrality to invest in emerging technologies and innovation, and the national electricity sector carbon trading scheme has been up and running since early July, with a floating trading price at around 50 RMB yuan - 8 dollars per ton.

- Academics and think tanks keep releasing their modelling of the pathways for the country to achieve the set targets, while the individual consumers are joining forces to champion low carbon transportation and change behaviors.?

And in the middle of all this came the unexpected China black-out. About 20 provinces have to opt for a rationing scheme of power supply, in particular for industrial facilities, but also partly the households in some regions. A real-life living case to showcase the disconnects among crucial pieces of the puzzle, it also offers a chance and a new perspective in the last-mile space to understand what holds back the acceleration of scaling clean energy solutions and rethink policy innovation in the new context of age of resilience in order to deliver a successful transition towards carbon neutrality.

Let me highlight two linked dimensions to illustrate why connecting the dots has become so critical and how complex the landscape has become.

First, China's Curse of Coal - 56% of China's electricity today is generated from coal, down from more than 70% a decade ago, very impressive progress. Such an achievement is driven largely by national policy goals to control and reduce total energy consumption, in particular coal, energy intensity target and carbon intensity target.?

Electricity market is a system that holds all pieces together and connects many dots, from fuels to power generation to grids that dispatches and transmits electricity and then to end-users. The Curse occurred when sudden rise of electricity demand came due to 1) overshooting supply chain demand for Chinese manufacturing due to pandemic disruption; 2) sustained extreme heat in the summer which led to demand for powering cooling. Thus such rising demand overwhelms the energy and carbon control policy goals.

At the end it is a supply chain challenge, inadequate supply of coal. It is a value chain challenge - constrained by lagging power sector reform and demonstrated in mismatching pricing mechanisms that fail to reflect real costs. It is a geopolitical miscalculation, disrupting coal import from Australia. And it could also be regarded as a necessary chaos to get all things in order before embarking on the country's second decade of decarbonization, a most decisive one, to decode the curse of coal.

And Second, China's Gospel of Clean Energy Revolution. China's contribution to accelerating global clean energy transition is a case made and undoubtful. And the already built-up manufacturing capabilities and supply chains is a reflection of such a contribution. From solar and wind energy to batteries and materials, China is well-positioned to continue to play her due role in the transition and innovation.?

Achieving net-zero goal requires global deployment of best manufacturing capabilities. It calls for accelerated innovation in technology, costing and pricing, regulation and business model. And business model innovation is required in order to efficiently deploy Chinese manufacturing capabilities in solar, wind, batters and other carbon reducing technologies.

At the foundation of this Gospel is investing in New Infrastructure to enable the accelerated transition. The convergence of three internets - Communication Internets, Clean Energy Internet and Transportation and Mobility Internet - form the foundation to enable transformation. These three internets are continuously being fed data from sensors embedded across society that are monitoring activity of all kinds in real time, from ecosystems, agricultural fields, warehouses, road systems, factory production lines, retail stores, and especially from the residential, commercial, and institutional building stock, allowing humanity to more efficiently manage, power, and move day-to-day economic activity and social life from where they work and live.?

A united human front to achieve carbon neutrality, empowered by emerging technologies and enabled by infrastructure transformation, we are destined to win this war against ourselves. A most inspiring sign of home is a rising younger generation - millennials and Gen Zs who are?spearheading a planetary mobilization in support of a global Green New Deal to save life on Earth and is setting the agenda for a bold political movement with the potential to revolutionize society. They represent the rising biosphere consciousness. They advocate people and planet positive - an aligned and common purpose of human development measured by two interconnected fundamental indicators - Planetary boundary and people's well-being. And they not only demand change but take actions to become part of the solution.?

This is where our hope lies. We share a common destiny. And together, we can cool down the warming Planet.?