The dragon has a coal heart?

After a long pause, China returned to the faster construction of coal generation. Last year, China commissioned 50 GW of new coal—fired thermal power plants - this is the maximum in the last seven years. This year, according to the plans of the Communist Party of China, 106 GW of new coal-fired thermal power plants will be commissioned in the country, according to a report by the Center for Energy and Clean Air Research (CREA) and Global Energy Monitor (GEM).

That is, every week in 2023, China will launch about 2 GW of coal-fired thermal power plants. To understand the scale: for the whole of last year, 1.6 GW of capacity was introduced in Russia; no more than 82 GW of coal-fired generation has been introduced annually worldwide over the past ten years.

Thus, China was the first of the largest economies in the world to de facto move away from the "green" course, largely imposed on the country through global institutions - the UN and the IEA, the banking community, attempts to introduce a carbon tax, etc. Although on September 22, 2020, at a meeting of the UN General Assembly, Xi Jinping said that China would achieve "carbon neutrality" until 2060, and the peak of emissions is planned to be reached by 2030. On December 13, speaking at another UN event — the Climate Ambition Summit, the head of the country also named several key targets on the way to an ambitious goal: it is expected that by 2030 China will reduce emissions per unit of GDP by 65% and increase the forest fund by 6 million cubic meters compared to 2005. The share of non-fossil sources in total energy consumption will reach 25% in ten years, and the installed capacity of wind and solar generation will be 1200 GW.

Unlike the statements of the heads of many countries, Xi Jinping's words were not declarative. China really tried to achieve the stated "green" goals. For example, according to the National Bureau of Statistics, China produced 56.2% of electricity from coal last year — this figure has significantly decreased from the peak of 80%. To reduce carbon dioxide emissions, China has significantly increased the use of natural gas and renewable energy sources (RES) in recent years. Back in 2013, the country bypassed the entire EU in terms of the total introduction of renewable energy. In recent years, more wind turbines and solar panels have been commissioned in China than in all G7 countries combined. Which, by the way, did not prevent countries such as the United States from accusing China of being unecological.

Despite the rapid pace of renewable energy construction, the new "green" generation has never been able to cover the entire growth in electricity demand in the country. All this time, the construction of a new coal generation was under an unspoken ban. As a result, a significant imbalance accumulated, which played a cruel joke with China. In September–October 2021, the country faced a severe energy crisis. Power outages were recorded in more than 20 provinces. According to Goldman Sachs estimates, about 44% of industrial enterprises faced problems in the supply of electricity. To stabilize the power supply, entire industries, such as magnesium, were disconnected from the grid.

The reason for the crisis was called the shortage of coal in the country. However, this shortage is a direct consequence of the "green" roll of the PRC. For the purpose of greening, the country methodically "put things in order" (closed mines, restructured business, conducted anti-corruption investigations, tightened environmental requirements for coal mining, etc.) in the coal industry.

The crisis was overcome by the heroic efforts of a Chinese miner: coal production at the end of 2021 rose to historic highs in a matter of weeks. Obviously, such an active growth would not have been possible without conscious environmental and technical easing for the industry. And, it seems, this was the only possible adequate response to the crisis in the energy sector. The consequences of that crisis still affect the global economy: they gave the first impetus to the rise in the cost of gas (with which China closed the deficit in the energy system), non-ferrous metals and fertilizers (the production of which in China was temporarily reduced again due to a shortage of electricity).

In order to analyze the events taking place in the global energy sector, the role of China's energy system in it and the importance of coal in this very energy system, the country had a year. That is how much the development of the People's Republic of China was held back by covid restrictions. Now China is actively entering a new cycle of economic growth, and this growth will obviously be based on the domestic resource base: Chinese coal, Chinese gas and Chinese oil.

"We will strengthen the leading supporting role of coal and take orderly steps to increase coal production using advanced technologies while ensuring safety," the National Development and Reform Commission (NDRC) said in a report before the annual meeting of parliament. "We are stepping up the exploration and development of oil and natural gas at home to discover more untapped reserves and increase production," the NDRC also said in a statement.

The European gas crisis has allowed China to draw two important conclusions. First: RES at today's cost and application technologies do not yet allow it to act as a full-fledged alternative to traditional electricity generation, no matter how much the IEA and the EU would like it. Second: dependence on imported fuel is the Achilles heel of any economy. The rise in the price of gas, coal or oil can lead to collapse and degradation. Therefore, fuel imports need to be reduced and diversified both by type and by country of origin. So already this year, China has restored diplomatic relations with the traditional supplier of raw materials — Australia and has already received from there the first batch of coal in two years.