China’s National Energy Administration (NEA) has unveiled plans to invest ¥2.5 trillion (US$361 billion) in wind, hydro, solar, and nuclear generation through 2020, an initiative that will create 13 million jobs and contribute about half of the new electricity the country brings online by the end of this decade.
“The investment reflects Beijing’s continued focus on curbing the use of fossil fuels, which have fostered the country’s economic growth over the past decade, as it ramps up its war on pollution,” Reuters reports. Under a five-year plan released last month by China’s National Development and Reform Commission, “solar power will receive ¥1 trillion, as the country seeks to boost capacity by five times. That’s equivalent to about 1,000 major solar power plants, according to experts’ estimates.”
The Commission saw ¥700 billion allocated to wind farms, ¥500 billion to hydro, and the remainder to tidal and geothermal, the news agency states. “The government may exceed these targets because there are more investment opportunities in the sector as costs go down,” said securities analyst Steven Han at Shenyin Wanguo.
The rest of China’s new generation over the next four years will come from coal, Reuters notes—and despite a world-leading development boom, the NEA acknowledged that renewables will only account for 15% of total demand by 2020. Even so, ClimateHome reports that the NEA’s five-year plan “might have once again raised ambitions for its low-carbon future, highlighting the urgency that this smog-ridden country attaches to moving away from fossil fuels.” While many of the targets in the plan “are in line with the existing thinking of previous announcements,” it suggests that policy-makers are “even more determined to squeeze out coal’s share in the country’s energy mix, lowering its 2020 percentage in primary energy consumption from 62% to 58%.”
Then again, ambitious targets “do not necessarily translate into results,” notes correspondent Ma Tianjie. China is still building new coal facilities in spite of a serious problem with over-capacity, he writes, prompting regulators to consider a two-year freeze on new plant approvals. But so far, the country is keeping much of its existing renewables capacity off the grid, due to a combination of transmission bottlenecks and the design of the electricity market.
Yuan Ying, assistant manager of Greenpeace East Asia’s climate and energy campaign, said the new NEA plan “presents the framework to push forward the transition away from coal and towards renewable energy.” But to make it a reality, “China must push for more installation of wind and solar and get serious about tackling the enormous wastage of clean energy, which will also help propel a faster reduction in coal consumption.”
Greenpeace notes that in “the first three quarters of 2016, China saw an average of 19% curtailment of wind power, reaching as high as 46% in Gansu province. Gansu and Xinjiang provinces saw solar curtailment rates of 39% and 52%, respectively, in the first quarter of 2016.” But by designating central and eastern provinces as the location for 58% of new wind capacity and 56% of new solar, the plan “will increase efficiency by bringing energy generation closer to the market, and will go some way to tackling the curtailment problem.”
On Think Progress, veteran climate analyst Joe Romm said the NEA announcement highlighted the millions of high-wage jobs that U.S. President-elect Donald Trump seems poised to cede to China.
“China is preparing to go big on the only major new source of sustainable high-wage employment in the coming decades,” he writes. “China is already doing way better than the U.S. in this regard, and President-elect Trump’s commitment to opposing clean energy will not make things any better. As the International Renewable Energy Agency (IRENA) reported last year, China already has over 40% of all jobs in renewables, globally, while the U.S. has under 10%.”
“The change in leadership in the U.S. is likely to widen China’s global leadership in industries of the future, building China’s dominance in these sectors in terms of technology, investment, manufacturing, and employment,” agreed the Institute for Energy Economics and Financial Analysis in a broader sector study released last week.
“The U.S. is already slipping well behind China in the race to secure a larger share of the booming clean energy market. With the incoming administration talking up coal and gas, prospective domestic policy changes don’t bode well,” said lead author Tim Buckley, IEEFA’s director of energy finance studies.
“If the U.S. is serious about stimulating manufacturing-based growth, clean energy isn’t a sector to turn away from.”
Statoil ASA is taking a $500- to $550-million impairment charge to walk away from its holdings in Canada’s tar sands/oil sands, after selling its assets to Athabasca Oil Corporation for $832 million in cash and shares, the Norwegian state oil company announced Wednesday.
Fossil booster Claudia Cattaneo’s coverage in the Financial Post headlined the story as “the starkest sign yet Canada’s oilsands resource has lost its lustre.” At the Calgary Herald, columnist Deborah Yedlin said Statoil had made the decision to cut costs “after posting a surprise US$432 million third-quarter loss”; the headline on her story said the company’s “exit from Alberta reinforces cost challenges of oilsands”.
Climate hawks, need it even be said, had a different take. “The environment and Statoil’s shareholders are both winners here, as any serious attempt to meet the Paris climate commitments will turn this kind of high-carbon oil into a stranded asset,” said Greenpeace Canada climate and energy campaigner Keith Stewart.
While the decision was “10 years overdue,” said Greenpeace Norway, “we celebrate and congratulate Statoil on a wise decision.” “Hooray!” wrote WWF Norway. “Statoil is selling.”
“The deal marks a big retreat from the oil sands, which in the last decade had been the target of a massive spending boom among European and Asian companies,” the Globe and Mail reports. “Since then, development and operating costs jumped and planned export pipelines for the oil faced years-long delays. Meanwhile, the shale oil revolution unlocked massive reserves in locations such as North Dakota and Texas, which can be developed more quickly and cheaply.”
The Globe points to French fossil giant Total SA as another one-time investor that is scaling back its commitments in the tar sands/oil sands, stepping back from its Joslyn project and reducing its exposure in the $13.5-billion Fort Hills development.
Statoil country president Paul Fulton said the company’s “portfolio has changed and also the energy markets have shifted quite fundamentally” since it entered the tar sands/oil sands in 2007. “We’ve seen a decline in the oil price, and Statoil has a broader portfolio of assets that it needs to allocate its capital to.”
Those new interests include a boost to its renewable energy business unit, a possible record-breaking geothermal project in Iceland, and a stake in Convergent + Power, an American energy storage company with offices in the U.S. and Canada. “It is understood the investment from Statoil Energy Ventures will drive the expansion of Convergent’s commercial and industrial segments, with U.S. companies that commonly pay time-of-use and peak demand charges relying on energy storage to bring down their energy bills by a significant proportion,” Energy Storage News reports.
Statoil will now become an investor in Athabasca, with just under 20% of its shares.
The Dutch Parliament unexpectedly voted Thursday night to cut the country’s greenhouse gas emissions 55% by 2030, a move that will bring it in line with the Paris agreement and require all its remaining coal-fired generating stations to close.
The Netherlands closed five coal plants last year, but another five are still in operation—including three that came online last year and are being blamed for a 5% increase in the country’s emissions.
“Closing down big coal plants—even if they were recently opened—is by far the most cost-effective way to achieve the goals of the Paris agreement, and all countries will need to take such far-reaching measures,” said Parliamentary Vice-President and Liberal MP Stientje van Veldhoven. “We cannot continue to use coal as the cheapest source of energy when it is the most expensive from a climate perspective.”
While the Dutch government is not obliged to heed the Parliamentary motion, “the Liberal and Labour parties say they will now push for speedy implementation,” The Guardian reports. “The country’s centre-right coalition government is pursuing a twin-track response of appealing the ruling to the country’s higher court, while preparing a climate package for early November.”
Veldhoven stressed, however, that “it is our clear political statement, so this is what they must do. It is a motion, not a law, so there is some room for manoeuvre. But having one coalition partner support it is always a good guarantee that an adopted motion will be enforced.”
Last year, a Dutch court ordered the government to reduce its emissions 25% by 2020, noting that the country had recognized the severity of the climate threat in international treaties. The lawyer who brought that case, Dennis van Berkel, called the Parliamentary vote “an enormous leap for climate policy in the Netherlands”. But environmentalists are concerned the government’s forthcoming climate package—which could include limited coal plant closures and greater reliance on renewable electricity, geothermal heat, and carbon capture and storage—would neutralize the Parliamentary initiative.
Earlier this month, Economic Minister Henk Kamp came out against closing the three newest coal plants. “They are the cleanest in Europe,” he said. “We’d be crazy if we shut them.”
Norwegian oil and gas company Statoil and a group of Icelandic partners have begun test drilling for what they hope will be the world’s hottest geothermal production site.
“The concept of the research well at Reykjanes is to explore the opportunity to extract renewable energy by drilling wells into reservoirs of high-temperature water heated by the earth’s magma,” JWN Energy reports. “The drilling involves deepening of an existing geothermal well down to five kilometres depth at the Reykjanes site operated by HS Orka,” one of the project partners. “At this depth, superheated steam can be brought to the surface at 400-500°C and used for efficient electricity production in steam turbines.”
Drilling is set to conclude by the end of the year, JWN reports. After that, the partners will take 2½ years testing reservoir performance, well integrity, and power production potential.
“Research and technology is crucial for Statoil in a short- and long-term perspective, and having the high-beams on means looking many years ahead and beyond current business,” said Statoil Chief Technology Officer Elisabeth B. Kvalheim. “Geothermal energy is a renewable resource where we see potential for leveraging several of our core competencies from oil and gas.”
Statoil also announced last week that it had boosted its investment in one offshore wind farm in the United Kingdom and will soon take over operation of another one, Sheringham Shoal, a 317-MW facility that can power up to 220,000 homes.
“Taking over the operatorship for Sheringham Shoal represents a milestone for Statoil, as our first operatorship during commercial operations,” said Irene Rummelhoff, the company’s executive vice president for New Energy Solutions. “As operator of both the Sheringham Shoal and Dudgeon offshore wind farms, located in the same area, we can further improve efficiency and increase competitiveness across the projects.”
Statoil is increasing its ownership share in the newer Dogger Bank project—the world’s largest offshore wind farm, with intended installed capacity of 4,800 MW—from 25 to 50%. “This is in line with our strategy to gradually complement Statoil’s oil and gas portfolio with profitable renewable energy and other low-carbon solutions,” Rummelhoff said.