One Finite Planet

One Finite Planet

Cost of coal power vs renewables: China expanding coal while the suckers go green?

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Reports from COP27 seems indicate the key initiative this year to make wealthy nations cover the cost of the damages poor nations will incur as a result of emissions that have main originated from those wealthy nations.

The proposal as it stands has a missing an essential piece, and trying to cover for that essential piece, appears most to likely to increase emissions, and move COP away from a focus on solving the climate crisis and instead toward just fighting over the cost.

This is a troubled look at the key flaw in what has been put forward and the real solution that should be in place.

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If coal fired power can no longer compete on price, then why is China building two new coal power plants per week? Is China somehow able to use coal fired electricity to gain a competitive advantage against western manufacturing which increasingly relies on "clean green" but more expensive energy, with the result that emissions and jobs are simply transferred to China?

The current politics of climate agreements encourage rich countries to offshore some emissions to those countries often forced to be more reliant coal and with higher emissions. Could we fix the problem of China syndrome emissions if there was the political will?

Cost of coal power vs renewables: China expanding coal while the suckers go green?

If coal fired power can no longer compete on price, then why is China building two new coal power plants per week? Is China somehow able to use coal fired electricity to gain a competitive advantage against western manufacturing which increasingly relies on "clean green" but more expensive energy, with the result that emissions and jobs are simply transferred to China?

The current politics of climate agreements encourage rich countries to offshore some emissions to those countries often forced to be more reliant coal and with higher emissions. Could we fix the problem of China syndrome emissions if there was the political will?

Renewables are cheaper, but coal emissions are still increasing.

While the fossil fuel industry says otherwise and that renewables are increasing our energy bills, repeatedly the message backed by research and studies is: “energy from renewables is now lower cost than energy from fossil fuels”.

So, when the news about China building an average of two new coal-fired power stations per week throughout 2022 was brought to my attention, my first assumptions were:

  1. China choosing coal power may not prove coal really is always cheaper than renewables, but it does suggest that at least sometimes, or at least sometimes in China, coal power can be a lower cost choice than renewables for power generation.
  2. With so much of global manufacturing “offshored” to China, it raises question as to whether both emissions and jobs are simply moving to China as other countries are move to renewables.
  3. A system really is needed to ensure countries don’t end up simply offshoring emissions to countries with lower ambitions for emission reduction targets as the lowest cost option for business but potentially the highest cost option for the globe once the cost of offsetting emissions is considered.

To test these assumptions, I began by checking sources to find the reality behind this news that can be reported by either climate zealots or “big oil” sponsored journalists, and then analysing what is reported to see what is revealed about the reality of the cost of renewables vs cost of power from coal.

It turns out that the first assumption, that the building of all these new coal power plants suggests coal power may still be less expensive than renewables, at least in places like China, is flawed. It turns out it is not the overall cost, but the initial cash flow favours coal, and new power generation can start with coal even if the plan is to phase out coal power as soon as the cash flow permits.

China leads the world in constructing new solar and new wind, while also building more coal plants than any other country, the report finds.

NPR: China is building six times more new coal plants than other countries, report finds

Yes, China did add all those new coal power plants, but China also added even more renewable energy capacity during that same time period, and China is even five years ahead on the renewable energy capacity needed to meet climate targets, which provides quite compelling evidence that in China renewables are being chosen because they provide the lowest cost power, not just to meet targets. What pushes project s to coal is the required upfront investment and other factors create barriers particularly when the need is to get power quickly, forcing projects to take the quick and dirty path, even when ultimately the more expensive path, and at least start by using coal. Just as not everyone in Australia has home solar because despite home solar providing the lowest cost power, it is just not always practical to invest in solar, which leaves the majority stuck paying a higher price for power from the grid.

The second assumption, that China being still so reliant on coal means that countries importing from China may be effectively simply offshoring their emissions, was only partially flawed. With China doing so much of the worlds manufacturing, some of the emissions of the economy of almost every other country are happening within China. The ratio of renewables to fossil fuels in the in China is at least comparable, if not lower than, those of many other countries such as the USA and Australia, but still higher than those of many western European countries. China is better than I expected at “being green” and even leads the world in some areas of adopting renewables and clean energy, but it is still the case that for counties with very low emissions, some of their emissions are being masked by effectively happening in China.

The third initial assumption was that CO2 emissions from developed nations are often being “offshored“, or through international trade “outsourced“, to China are emerging nations, and in the process resulting in increased emissions. This process has played a role in building within China the electricity grid with the highest emissions of any in the world.

While China today is moving to renewables at an impressive pace, it is till adding coal as this is what happens when grids are built in locations where offshored and outsourced activities take place.

The result is a problem which I label the “China syndrome emissions“. It has already resulted in China becoming the world’s largest CO2 emitter, and if unchecked could see the rise of other new sources of CO2 emissions. What is needed is an updated method of calculated national emissions that includes “imported” emissions, thus giving the buyer of the emissions some incentive work together with the country’s conducting offshored and outsourced activities to ensure emission are no higher than those that would result if the projects remained at home. When project move to emerging markets, there needs to be a way to ensure the offshore producers have the incentive and financial return aid with covering the for investment in renewables.

China now has a stable population, and is quite developed, so going forward the main reason for growing the gid would be if this outsourcing and offshoring continues, or as a result of the growth of Chinese owned manufacturing. Regardless, the world needs to ensure the problem of “China syndrome emissions” does not continue.

In summary, although we do have the dream scenario where the clean energy happens to also be the lowest cost energy, the fact that the money is all up front with renewables complicates things.

Renewables are already cheaper, but that is not enough. Like the razor and blades model, there is a huge incentive for fossil fuel companies to help anyone needing power build a coal power plant, whilst those selling solar cells need to make all their money on the initial sale. For the same reason I can buy a new printer for less than a full set of original ink cartridges, no matter how much solar cells drop in price, a proportion of power generation is going to be installed running on fossil fuels.

The problem is not over.

It also means the politics of wealthy nations placing more importance of an appearance of clean energy results in some emissions being swept under the rug to locations less able to take advantage of low-cost clean power. The problem is the politics of emissions reduction, not the cost of renewables, and is not a problem restricted to what happens inside China.

Offshoring: The “China syndrome emissions” global problem.

What are China Syndrome Emissions?

I describe the rise in carbon emissions in a country with rapid economic growth driven by an expanding role as a manufacturing and production base for international markets as China syndrome emissions.

The original “China syndrome” is a term for a nuclear meltdown where the reactor and all its core components sinks right through to the other side of the Earth, which somehow always means ending up in China. This China emissions syndrome is where carbon emissions together with the activities that created the emissions are offshored to somewhere else, which mostly seems to really be to China.

Behind China Syndrome Emissions: A problem not limited to China.

There are several factors that have resulted in an increase in emissions in China and will continue to result in increases in emissions from many emerging markets:

  • Several factors combine to ramp up electricity generation:
    • Manufacturing and industry grow, leveraging a lower cost bases than in more developed markets.
    • Improved living standards increase domestic power consumption per capita.
    • A population boom as birthrates adjust to reduced infant/child mortality rates from improved health care.
  • The ramp up in electricity generation will normally include higher percentage of fossil fuel power generation than new power plants in more developed nation due to limited access. to capital ins raises the percentage of the new power generation that is dependent on fossil fuels.

The problem is less that China and emerging countries have particularly high reliance on fossil fuels for generating power, but rather that when manufacturing is conducted on behalf of developed countries the resulting emissions the developed country plays no role and takes no responsibility for keeping the emissions within the developed country’s emission targets.

China may today be progressing rapidly to renewables, but China was less advanced during the past 20 years when much of the current generation capacity was added, and China is still adding coal power. If countries having their goods manufactured in China had all contributed to ensuring the use of renewables at level matching their own domestic grids, global emissions would now be much lower.

Now much manufacturing is moving to other countries less developed that China, and the be entire cycle could be repeated many times, delaying for decades progress on the transition to renewables.

A problem is that there is political pressure in more developed countries to lower their emissions which can result in companies conducting activities that produce emissions those mean allowing activities that create emissions to move offshore, but no political or economic pressure to ensure actual emission do not increase as a result of their being offshored.

Why developed nations offshore their emissions.

While the richest countries can have aggressive targets for reduction of emissions within their own country, this usually centres around governments compelling businesses to reduce emissions. For international businesses it is often simpler to just “offshored“, or through international trade “outsourced“, emission producing activities to other countries. The other counties including China and emerging nations which typically have less aggressive targets and less pressure to reduce emissions, together with typically longer timeframes to reach net zero.

There is little point in developed countries signing up to ambitions emission reduction targets if the result is emissions being moved offshore and increased rather than eliminated.

If coal really is more expensive than renewables, then you think that offshoring emissions producing would be no problem as offshore suppliers would also all move to reusing renewables. The catch is that although renewables cost less overall, more investment is required at the outset with renewables, with the savings taking some time to payback the initial outlay.

The twist is that only the rich can afford the lower cost power, for the same kind of reasons that in Australia where home solar provides the lowest cost home power, those with the lowest incomes have the lowest use of solar. Like home solar, renewables require the ability to fund the initial investment in order to realise the savings.

Unless the national grid is already 100% “clean”, offshoring any activities that produce emissions can reduce national carbon emissions and help achieve climate targets. However, when those activities are offshored to countries with less wealth and thus usually less aggressive emission reduction targets, there is often less capital available which results in more coal and less renewables despite the reality that coal power costs more.

Is China really the world’s worst CO2 polluter?

The answer is both “yes” and “no”. China is the emitter of CO2 from a single country, but the “yes” comes from the fact that the total emissions are so high, while the “no” answer is based firstly the emissions per capita being lower than the world average.

When you have the most people of any country then total emissions are staggering. But it is more complex. Qatar for example has 5 times higher emissions per capita and per capita emissions in China as of 2018 data at 7.7 Co2/cap/yr are lower than Canada(16.9), Australia (16.5), USA (15.7), Russia (12.3), Japan (10.4), Germany (9.7), New Zealand (7.8).

So, population is a mitigating factor. Then add the fact that China is acting as the world’s main manufacturing base and creating emissions as a result of producing products for other countries. In part, some emissions in China are a result of other countries effectively outsourcing their emissions to China, and not taking steps to provide incentives for those outsourced emission producing activities to be as green as possible.

More relevant than per capita emissions to whether a country is a suitable place to conduct emissions producing activities on behalf of other countries, is the percentage of power than comes from renewables, which is the “RE% of total” column from this Wikipedia page. The data has limitations which need to be taken into account, as the data provided for different countries was collected in different years. As it would be hoped that the percentage of renewables would be rising, countries with older data, such as the USA where data on the page is at the time of writing from 2016, will be expected to show lower percentages than similar countries with newer data, and will be expected to show a higher percentage of renewables as the data is updated. China shows as 24% from 2019, which could be similar to the USA showing 14.7% from 2016, and Australia with 34% from 2021, with all of these countries being way behind leaders like Iceland, Paraguay, Costa Rica, Tajikistan, Norway or even New Zealand with respectively 100%, 100%, 97.7%, 97.5%, 96.2%, 83.9% of energy from renewables back in 2016.

As an emerging developed nation, China is currently progressing well. Already goods manufactured and shipped to countries such as the USA, Canada and Australia are being made with no more emissions than if those products were produced locally. In another decade the same could apply for nations with far cleaner domestic grids, China and at the current rate, China may well have a full renewable grid by 2050, but there is still a question as to whether this problem is fully the responsibility of China, and the threat that manufacturing may again move to other nations, and the surge in emissions that did happen in China is repeated elsewhere.

The politics barrier to solving “China Syndrome Emissions”.

As manufacturing moves offshore from rich countries, such as the USA, the UK, Canada, Australia etc to emerging economies, those activates move from countries classified as developed, and having stronger net zero commitments, to countries classified as “emerging” and typically with lower emission reduction obligations and less capital to enable installation of renewables.

Governments within “developed” countries put pressure on companies to reduce emissions within the country, but there is typically zero monitoring of any resulting emissions once projects are transferred offshore. Companies are obliged to do whatever is best for shareholder returns, which can mean moving emissions to wherever they are best tolerated, which will typically be in emerging economies least about to invest in renewables.

Realistically, the current system is better placed to “sweep emissions under the rug” by transferring them rather than eliminating emissions globally.

Without importers counting imported emissions, there will not be any incentive to go beyond shuffling deck chairs.

Even as solar gets even less expensive, the problem is not over.

The new coal power plants in China are creating increased global emissions, which if we believe climate science at all comes, means the actions of one country is creating a significant global cost.

One reason for the surge in demand that increased recent expansion of coal power was the loss of hydro-power due to extreme drought. Are these coal plants going to be used extensively, or will they be “mothballed” as hydro power comes back online? It may in part depend on weather over the next period. If hydro comes back online, it is does not have the ongoing cost of fuel of coal power.

If the hydo comes back online the capacity from renewables is sufficient, then of course there would be no need to buy and then burn coal, and China could finally stop adding more coal capacity, but although the trend since 2015 has been towards China adding less new capacity coal each year, eliminating adding coal does not seem imminent.

While China does keep adding coal, additional power capacity is around 80% from renewables.

Plus, while China may be further along the path than other merging countries with a strategy of becoming a manufacturing hub, it is not alone. Even if the growth in emssions from China was to end, the pattern could still be repeated in many other countries.

To achieve net zero globally, it will be necessary to find some way, by either carrot or stick, to stop coal or other fossil fuels being the choice in any circumstance as counties ramp up power production.

Yes, countries like Australia, Canada and USA need to be doing more to reduce their emissions, that will all be for nothing if countries adding new capacity are increasing emissions.

Renewables are already cheaper, but that is not enough. Like the razor and blades model, there is a huge incentive for fossil fuel companies to help anyone needing power build a coal power plant, whilst those selling solar cells need to make all their money on the initial sale. For the same reason I can buy a new printer for less than a full set of original ink cartridges, no matter how much solar cells drop in price, a proportion of power generation is going to be installed running on fossil fuels.

Using even “trade” stick against China may not be advisable, but some solution must be found.

This does raise questions on the overall merit of allowing tariff free import of goods manufactured in China or other countries regardless of the type of energy in use.

The Data: China building coal plants but leading in renewables.

Data sources: Who do you trust?

It is really hard to find unbiased sources of information, and every source I found seemed to present some distortion of information in support to support an opinion.

One strategy is to try to find clear statistical data or data agreed by both sides, and check and consider counter arguments from the other side before accepting other sides claims as correct.

However, on closer inspection, the distortions I found were not equal on both sides. After sufficient reading, it becomes a little like the “intelligent design vs evolution” debate. Plus, while articles from both sides can selectively overlook data that does not fit their narrative, the “coal is good” side tends quite often quote opinions from quite extreme echo chamber articles as references, rather than hunt down actual source data. I guess it does stand to reason that with an industry with over 1 billion in profits per day at stake, people are going to be passionate about protecting those revenues.

All sources add their own little twist to the story, but the following is clear.

  • China has added a lot of coal in 2022.
  • China also added even more renewable energy capacity in 2022.
  • Renewable capacity has far lower ongoing generating costs than coal, so the priority will be to use power from renewables whenever it is available, but it can be faster to add new fossil fuel generation capacity when there is a power shortfall. China Returns To Coal As Hydropower Falters

I at first assumed that “” would focus on promoting the fossil fuels industry and be promoting building new coal plants as China as an example that others should follow. A critical look at the data did not make any position clear:

Thermal power generation, mostly from coal, jumped by 15.9%, more than wind generation which surged by 15.3%, while solar power generation edged up 0.1%, according to the data.

China Returns To Coal As Hydropower Falters

That sounds like 15.9% coal power than coal power the previous year, and 15.3% more wind power than wind power the year before. If that interpretation is correct, you would think that coal increase would be on a larger base and thus be a far bigger increase than the increase in renewables. At first glance, it seems it is the renewables are being exaggerated, but:

China has reached its goal to have more non-fossil fuel installed electricity capacity than fossil fuels earlier than planned, with 50.9% of its power capacity coming from non-fossil fuel sources now.

China Returns To Coal As Hydropower Falters

Huh? So, the base of renewables is actually now more than the fossil fuels, so the same percentage increase in wind might even be more than the increase in coal power? Plus, something appears strange about the 0.1% increase solar figure. Other data reports even more new solar capacity was added than either coal or wind capacity over the period, yet this article seems to indicate almost no solar capacity was added.

What these percentage increases are relative to is still unclear, and actual figures on those increases are not in the article and could not easily be found from and linked data sources, so I had to find that data elsewhere.

The conclusion made by the article:

Despite record-breaking solar and wind power installations and power generation, China still relies very much on coal to keep the lights on and industry going.  

May sound reassuring to the coal industry, but to find the actual increases in power generation capacity, I needed to look elsewhere, and when the figures are included as when reported by CNN, the same data makes that conclusion less convincing.

CNN: China approved equivalent of two new coal plants a week in 2022, report finds.

Throughout 2022, China granted permits for 106 gigawatts of capacity across 82 sites, quadruple the capacity approved in 2021 and equal to starting two large coal power plants each week, said the report.
China added a record 125 gigawatts of solar and wind capacity last year, making up 2% of the country’s electricity demand.

China approved equivalent of two new coal plants a week in 2022, report finds

This data fits with the data presented above by, but is presented in in a different manner, making it clearer that despite adding so much cola capacity China is still adding more renewable energy capacity than coal power capacity. The key factor being that as quoted in the report, China has now passed 50.9% of energy being renewables, the expressing each energy increase as a percentage increase in that form of capacity, ended up making the coal look bigger despite in absolute terms being smaller.

The conclusion made by the CNN article still agrees that China made a large increase in coal capacity in 2022, but the difference is that CNN reporter saw this a reason to criticise China rather than a vindication of the future of coal.

The question over this conclusion is the failure to accept that China choosing more coal than in the past is a logical response to an unforeseen loss of hydro power due to the drought, and if the West wants the power to used by China manufacture iPhones and other products for the West to be more biased to renewables, then trade agreements need to reward products being made using renewable energy.

China Will Burn More Coal As It Supplies “Green Energy” Technologies to the World

This article from the “Institute for Energy Research” makes no mention of wind or solar generation in China, effectively leaving a reader to assume that coal is either all or the majority of the new power being added by China, rather than coal being responsible for a continually decreasing percentage of power generation in China each year.

This article seems entirely designed to selectively cherry pick information to try and support the premise that people in the USA are being forced into renewable energy whilst those in China are not. If you read this one story, and do not check against data elsewhere, it would be very misleading.

The Institute for Energy Research?

IER is often described as a front group for the fossil fuel industry.[2][3][4] It was initially formed by Charles Koch, receives donations from many large companies like Exxon, and publishes a stream of reports and position papers opposing any efforts to control greenhouse gasses.

Wikipedia: Institute for Energy Research

It is interesting how just by cherry picking and implication, such a misleading picture can be built. Much of the aritcle focuses on suggesting that China expanding coal power capacity, indicates the US is on the wrong path, while hoping the audience does not realise that China is more active than the USA in transitioning to renewables for power generation.

Which really costs less: Coal vs Renewables?

The message is “renewables cost less”, but it is not so simple.

Yet in the west, we are told coal power plants are no longer economically competitive:

It now ‘unequivocally’ costs less to build new renewable energy projects than to operate existing coal plants, according to a new analysis. 

Bloomberg: Replacing US Coal Plants With Solar and Wind Is Cheaper Than Running Them

If renewables cost less, why is China building coal power plants instead of “cheaper” renewables, and why do power bills keep increasing as power generation transitions to supposedly lower cost renewables?

The problem is renewables can have an “up-front cost” barrier.

Answer: Renewables face similar barriers to Australia households going solar.

Consider that in Australia, home solar provides lowest cost power, but most homes don’t yet have home solar.

It is estimated installing solar has only a 3-to-5-year payback period, and 30% of homes have solar energy in Australia. Given the solar cells last significantly longer than 5 years, that means home solar provides significant savings.

Yes, although solar energy costs less, most people don’t have solar, with a major reason being the initial cost, which is a significant barrier to those w3ho can least afford high power prices. creating the great

The reasons for not having solar are:

  • “Money up-front”: Solar energy requires initial investment as opposed to “pay as you go”.
  • The are some places where solar is not suitable:
    • Some people get too much shade on their roof.
    • When renting, it is not normal the occupants decision.
    • For apartments, the entire complex may need to go solar.

Renewables power generation vs coal follows the same cost pattern as home solar vs grid power to the home:

Running a coal plant is complex and expensive.
  • Renewables:
    • “Money up front”: almost all costs incurred before any power is generated.
    • Low ongoing costs, as once installed, there is zero ongoing no consumables expense, and minimal ongoing maintenance with often no permanently on-site staff required.
  • Coal power:
    • Lower initial construction cost.
    • High recurring costs as after the plant is built, there is still an ongoing expense of buying coal paying wages for normally a quite substantial on-site staff that is needed to keep a high complex and high maintenance plant operational.

Renewables cost less, not because the initial-cost of a wind farm or solar-farm is less than a coal plant, but because the recurring costs are almost zero. It may require a lot of solar panels or many large wind turbines, but the actual operation is far less complex and has no ongoing fuel costs.

Plus, also like home solar, there are some locations where power is needed that are not suitable for renewables The right environment is needed for solar or wind, and a significant land area can be required. Coal and wind need to be in suitable places to collect sun and wind, but sometimes the right locations on not those with easily available suitable connection for feeding into the power grid. Building new grid connections over long distances not only results in expenses, but also delays due to planning permissions and constructions that can mean the power may not be available in time for the projects needing power.

Why buy coal power? The printer ink example.

Coal or other fossil fuels are consumables like razor blades or printer ink, and thus can make sense for suppliers of fossil fuels to subsidise anyone building a fossil fuel power plant. In contrasts, there is no sale of sunshine or wind possible to provide incentive for anyone to subsidise solar or wind.

Consider the razor and blades model, and the example of printers and ink.

Traditionally, printers were sold at a loss and the profit was generated by consumables over the lifetime of the device, in much the same way as the razor industry operates.

HP to hike upfront price of printer hardware as ink biz growth runs dry

When recently faced with a child needing to print an assignment and empty ink cartridges, I found it was possible to buy a spare printer that came with ink for 5x less than it was possible to buy new cartridges from retail stores with stock. The environmental thing to do would be to buy a printer needs not cartridges but just ink, but they are too expensive to purchase, since the product price is not subsidised. Perhaps like those in China putting in coal power just to tide over until hydro power is available again, I do not believe I will use enough ink for a cartridge printer to become more expensive.

Given the fossil fuel industry spends billions on propaganda to protect their revenues of over 7 billion per day and funds bodies like the Institute for Energy Research, it is hard to imagine anyone contemplating a new power plant would be unable to get assistance to build a fossil fuel power plant so they can start consuming.

China’s cost advantage: The Evidence renewables are cheaper.

Yes, China is adding coal driven energy, but nowhere near the amount of renewable energy China is adding.

Solar: one key to cost savings in China.

China’s solar capacity is now 228 gigawatts (GW), more than the rest of the world combined, according to Global Energy Monitor. And wind capacity, at a whopping 310GW, also leads the world. With another 750GW of new wind and solar projects in the pipeline, China will hit its 2030 target of 1,200GW – an unimaginable number when proposed just a few years ago – five years early.

The Guardian: Is China really leading the clean energy revolution? Not exactly

Even in the above article also focused on how China is not driven by motives of avoiding climate change, it is conceded China is ahead of their targets for installing “green” energy. Either China is ahead of their targets because they are such model global citizens that they were prepared install more than the commitment amount of renewable power despite it being more expensive, or because, as concluded by the article, installing that much renewable power was in China’s economic interest and they did so because it was less expensive. Once all factors limiting renewables when renewables are a viable choice are taken into account, it becomes clear that for ren3ewabvles to be more than 50% of the new power capacity, the economics must stack up.

The National Renewable Energy Laboratory (NREL) report I’m getting these stats from indicate that the country’s [China’s] renewable energy market has shifted as follows in the past 11 years:

  • “In 2011, renewables made up 26% of 1.1 TW of total capacity.”
  • “In 2022, renewables made up 45% of 2.5 TW of total capacity.”
Solar = 44% Of New Electricity Capacity In China In 2022
While China does keep adding coal, additional power capacity is around 80% from renewables.

Renewables win in the long term, but it can take a long time.

With the migration from fixed line phones to mobiles, emerging markets could bypass fixed lines and go straight to mobiles because the newer solution required the least initial investment. Unfortunately, the opposite applies with energy and renewables, and renewables require higher initial investment.

While renewables are the lowest cost power, their requirement for up-front investment will often mean that when new generation capacity is required, the economics can favour starting with fossil fuels for much of the new capacity and then making the investment to get the savings from transitioning to renewables after revenues are in place.

This means that without policies that provide emerging markets access to capital to move directly to renewables, the same pattern of “fossil fuels first” will be repeated in each emerging market. It is actually China who at least claims to be doing something to avoid the fossil fuels first pattern being repeated in each emerging market being repeated, but this should ideally be addressed at COP conferences.

Despite stories like this on how China is doing its part, surely global strategy would be preferable.

China is one country that has shouldered much responsibility for investing in renewable projects around the world until this point. A perfect example of the role that China plays in energy investment in the global south is its large-scale investments in hydroelectric and solar projects in South America. Ecuador receives 92% of its electricity from hydropower, much of which is financed through the $19 billion that Chinese banks loaned to Ecuador in part to finance seven large hydroelectric projects. In Argentina, China is the principal investor in projects such as the Cauchari Solar Farm. Moreover, Chinese company Goldwind owns both the Loma Blanca Wind Farm (250 MW) and a 96 MW wind farm in the Buenos Aires Province. In total, China’s two primary finance institutions have invested almost $10 billion in generation and distribution projects in Latin America and the Caribbean since 2000.

If Renewable Energy Goes South, Things Will Look Up

The urgency problem: Coal has most appeal when adding capacity in a hurry.

China added a record 125 gigawatts of solar and wind capacity last year, making up 2% of the country’s electricity demand. And though that target is even higher this year, “even this increase won’t be sufficient to supply all of the demand growth without increasing power generation from fossil fuels,” said the report.

It added that for China to truly cut down on carbon emissions, it needs to start phasing out its “vast coal power plant fleet” rather than continue growing it. Besides the plants’ environmental impact, their “politically influential owners … have an interest in protecting their assets,” said the report.

China approved equivalent of two new coal plants a week in 2022, report finds

So, while China is adding so much new power generation, even if the majority of the new power capacity is from renewables, China will still also be adding coal.

The most optimistic interpretation of what is happening would be China is building coal power to temporarily replace energy from hydropower that is offline temporarily as a result following recent droughts and heat waves. Unlike windfarms which produce power whether you need it or not and at no extra cost, part of the cost of coal power is the coal consumed. So, for power plants which are planned to be offline during most years, coal plants save on coal costs but wind or solar has no saving from being offline, which makes coal plants more competitive in this case than in other situations.

The less optimistic view is to look at how despite increasing the percentage of renewables, total emissions from China keep increasing.

The evidence is that when increasing the capability to generate power, the economics favours fossil fueled power being part of the mix. In most developed countries, the demand for power has been static for most of this century, but for emerging economies, unless the rules or the system is changed, power demands will increase and while renewable may play a role, they won’t’ stop an increase in global emissions.

Are renewables a scam that causes rising energy prices?

In many western countries the message “renewables are now the lowest price form of electricity”, is heard repeatedly, yet power prices keep rising despite the grid as the grid transitions to supposedly lower cost renewables.

One possible reason is that the fossil fuel industry benefits in two ways from rising power prices as the grid transitions, and at least until that transition is largely complete, has the ability to ensure prices keep rising. The double win is that they can increase prices and profits, while at the same time be able to blame renewables for the price increases and feed anti-renewables sentiment.

Another reason that applies in Australia, and possibly also in other countries, is that the “poles and wires” were sold by governments to private operators, and now, being monopolies by nature, exist as government regulated monopolies with pricing controlled by government bodies. The problem is that in order to gain the highest price from buyers when selling these assets in order to privatise them, governments effectively provided profit guarantees to buyers. These guarantees could effectively mean that prices to consumer cannot fall no matter how much more home solar is deployed, as the protected profit will ensure prices rise to compensate for the new poles and wires owners for then selling less power transmitted over the poles and wires.

This section still to be updated.

The question of who pays for the cost of cleaning up?

The currently often ignored cost of power from fossil fuels.

Although at one time, chemical plants could just intentionally dump their waste into rivers with impunity, most countries now require companies to bear the expense of remediation of any pollution that reaches river systems, and adopted the polluter pays principle.

Society started way earlier with steps to address polluting of rivers than with steps to address polluting the air, partly because rivers fall within national boundaries,

With over 8 billion people as a source of waste, the same approach of allocating someone responsible for types of pollution will at some point likely need to be adopted for plastics, even for pharmaceuticals, maybe even litter, and clearly for CO2 emissions.

COP27: Reparations over climate action.

Plans to allocate responsibility for CO2 emissions, have already been raised at COP27, politics again played a major role. The problems with what was suggested include:

  • The allocation of responsibly was not proposed to be linked to actual emissions, but instead, wealth, providing zero incentive to reduce emissions.
  • The motive was not to encourage reducing emissions, or to provide mechanisms to allow countries to avoid needing to increase fossil fuel consumption, but instead all about finances.

The problem seems to be the initiative was very much based on astroturfing, with smaller Pacific nations coerced financially towards supporting initiatives rather than motivated by climate goals.

What action at COP would help?

to be added