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College fossil fuel divestment – Yes we must! Updated for 2026

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I have taught courses in the energy and environmental sciences at Boston University for 27 years.

For most of that time I have remained ‘above the fray’ when it comes to activism, preferring to let others, including many of my students, engage in the political process.

I can no longer stand on the sidelines. Climate change and other impacts that stem from our reliance on fossil fuels are large, growing and they disproportionately harm the poor in every society.

As a scientist, I conclude that the evidence is unassailable. As a citizen, I am compelled to try and use this information to help steer our energy system to a sustainable future.

Many universities hold large endowments or funds that have significant positions in fossil fuel companies. This investment will increasingly be viewed as an abdication of the university’s treasured position as representing the intelligence of society.

Three years ago, I wrote a letter as then co-chair of Boston University’s Committee on Sustainability urging the university’s Board of Trustees to seriously investigate divestiture. And with my colleagues, I recently started a blog that discusses issues surrounding energy transitions.

I’m not the only academic to get involved in this issue. At least 200 institutions of higher education, foundations, religious organizations, and cities have committed to divestment. This includes about 32 colleges and universities that have pledged some level of divestment; at least an equal number have publicly rejected divestment.

At Boston University, a faculty petition and the student group DivestBU have prompted the University’s Advisory Committee on Socially Responsible Investing to take up the divestment issue. So pressure by faculty and students has helped make divestiture a front-burner issue.

Why we need to change

This is a multi-faceted problem, but one issue, in particular, motivated me to act. Boston University and many other institutions of higher education have education and research programs that describe the nature of climate change and its impacts on society.

The same institutions have invested considerable effort in ‘greening’ their business operations, including efforts to improve the efficiency of energy and water use, recycling, purchasing and procurement, building and renovation, and outreach to students, faculty, and staff.

But climate change has not been confronted in the boardroom, where endowments have been ring-fenced from transparency and scrutiny. This is what I want to change. Universities face charges of being hypocritical.

What message do you send when you grant degrees with titles such as ‘Sustainability’, ‘Environmental Science’, and ‘Climate and Society’ with one hand, yet with the other hand invest in the activities that drive the very problems those degrees aim to address?

Yet the argument for divestment spans the financial, economic, environmental and ethical domains. One guiding principle is the existence and degree of harm caused by the use of fossil fuels.

As stated by Robert Knox, chair of the Board of Trustees of Boston University, circumstances exist to consider divestment only when “the degree of social harm caused by the actions of the firms in the asset class is clearly unacceptable.”

A prodigious body of evidence indicates that the fossil energy system causes pervasive human health, environmental, and social harm across every society, and that these costs will grow in the absence of explicit measures to address them. Climate change will shave about $1.2 trillion from global GDP this year, and that cost is growing by about 2% per year.

The World Health Organization estimates that an additional 250,000 people will die annually between 2030 and 2050 from conditions caused or worsened by climate change. Air pollution from fossil fuel combustion reduces life expectancy by up to 1.6 years in the US and five years in northern China.

These costs will grow if we continue to develop unconventional oil and gas sources such as oil sands, shale gas, and shale oil which have larger ecological footprints than conventional sources.

Fossil fuel risks

The dependence on oil leads directly to violent conflict. In the name of national security, the US military has frequently been used to protect access to foreign sources of oil and to protect key suppliers such as Saudi Arabia and Kuwait from internal revolt and external attack.

Oil revenue channeled through charities, schools, and private donors in some Middle East nations helped create and sustain both Al-Qaeda and the Taliban.

University endowments face tangible financial risk from their investments in fossil fuels. Material efforts to enforce a carbon budget designed to prevent unacceptable damage from climate change will result in a dramatic loss of value for fossil fuel assets, principally in the form of stranded assets, or energy sources that will left in the ground.

Companies with large amounts of stranded carbon resources could see their stock prices fall, lowering the value of investment portfolios that hold the shares.

Universities also face risk to their reputation. The ability of the university to sell itself to prospective students, faculty and contributors rests on its authority as a source of knowledge vital to humanity. If there is a misalignment of its teaching, research, operational, and financial behaviors, that authority and the institution’s viability, is put at risk.

Failing to act carries a significant reputation risk, as the university’s very existence is defined as a civilizing force. Universities seen to be complicit in destruction will likely lose position, students, faculty and reasons to be proud of what they do.

There is an alternative

Some say divesting from fossil fuels while at the same time using those fuels to run campus operations is hypocritical. But I believe hypocrisy only arises if one’s investment behavior is misaligned with the nature of your research and teaching programs, and with your campus operations.

No one expects to flip a switch and be divorced from fossil fuels. But many universities have expansive research programs that provide elements of the roadmap to a sustainable future.

This includes teaching programs that prepare young adults to navigate life in that future, and campus operations that reduce the institution’s carbon footprint and overall environmental impact. In this situation, there is no hypocrisy in divestment, even if the institution continues to rely on fossil fuels for some time.

Another frequent argument made against divestiture is that low-carbon forms of energy are more expensive than fossil fuels, so ‘forcing’ a transition will impose a significant cost on society. As a blanket statement, this is demonstrably false.

Multiple independent studies and the observation of actual investment patterns unequivocally demonstrate that energy efficiency and onshore wind power are as cheap or cheaper than electricity generated from fossil fuels in many regions. The cost of electricity from solar sources is plummeting.

The price for solar photovoltaic technologies has dropped from $50-80 per watt in the 1970s to less than $1 per watt today. Lower cost drives adoptions; about 26% of all new electric capacity in the first half of 2014 in the US was solar.

A university’s role in society

There are three takeaway points on divestment. First, addressing climate change is central to the mission of every institution to higher education because it imperils vital aspects of human existence and, therefore, crosses every academic discipline and profession.

Universities have an obligation to their students, facility, alumni and society to understand the nature of, and the risks posed by, climate change. To the best of their abilities, they must see that such knowledge is used in society’s best interest. This obligation holds regardless of whether or not divestment is being considered.

Second, divestment is feasible and, if intelligently implemented, should not threaten the financial health of endowments.

Third, universities do not have to go it alone. There is a rapidly expanding set of informational resources, analytical tools, and institutional partnerships that support the planning and implementation of divestment.

 

 

http://theconversation.com/college-fossil-fuel-divestment-the-view-from-the-lectern-38138

Cutler J Cleveland is Professor of Earth and Environment at Boston University.

This article is adapted from ‘The Path to Fossil Fuel Divestment for Universities: Climate Responsible Investment‘, Cutler J. Cleveland and Richard Reibstein. and was originally published on The Conversation. Read the original article.

The Conversation

 




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Let them eat carbon! The corporate plan to cook Africa in its own fossil fuels Updated for 2026

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If you have ever wondered about what is blocking action against climate change, consider this.

There’s an estimated £19 trillion GBP ($28 trillion) worth of fossil fuel reserves in the world. Only 20% of these can be extracted and burned if the world is to stay below a 2°C temperature rise from pre-industrial levels and avoid catastrophic climate change.

The sensible solution to tackling global warming is thus clear and simple: keep these fossil fuels underground. This means that £15 trillion ($22 trillion) worth of carbon must remain untouched. To burn it would be tantamount to committing global suicide!

So, why is no real action being taken to tackle global warming? Because it’s all about capital: profit, not people and planet. It’s about the insatiable appetite for financial accumulation by fossil fuel companies, their shareholders and their agents.

To avoid a catastrophic temperature rise, industrial economies must urgently decarbonise the way they travel, power and move things. Even a 2°C rise in global temperature would have huge impacts. In Africa, this ‘safe’ 2° will in effect translate to a 3°C increase. The current ‘business as usual’ fossil fuel path we are on is set to burn up and fossilise the African continent.

And yet, though the stakes could not be higher, rather than halting the exploration and extraction of fossil fuels, corporations are digging deeper and using ever more extreme means of extraction. In this effort they are aided by their unprecedented political connections.

Papering over Africa’s scars

Chatham House’s Extractive Industries in Africa conference, which concludes today, has brought together miners and politicians to discuss strategies for exploiting Africa’s mineral resources. It is a clear indicator that the quest for profit does not consider the great harm inflicted on the continent and our shared climate.

Indeed, the damage done by the extractives sector goes beyond climate impacts and includes a wholesale disregard for human rights, the displacement of communities and unthinkable levels of pollution of land, water and the air.

The scars of mining in Africa are visible in the coal mines of South Africa, the gold mines of Ghana and Mali, as well as in the devastation caused by oil companies in the once verdant ecosystems of the Niger Delta. It is also well known that mining causes many of the persistent violent conflicts in Africa.

Sadly, however, ecological destruction for the purpose of appropriating ounces of minerals is often not seen as outright violence as it lays waste to the life support system that is our environment.

Designed to exclude civil society? That’s how it looks

By hosting this conference in London, not Africa, and charging exorbitant fees – £580 is the cheapest fee for non-member NGOs – Chatham House has effectively prevented the participation of African civil society and community members.

In doing so, the think tank has, intentionally or unintentionally, attempted to silence the people best able to describe the true costs of the extractive industries and to contest Chatham House’s conservative development narrative of ‘resource extraction = growth’.

Fearing that this may well be another Berlin Conference (1880) aimed at carving up and appropriating the African continent’s resources, we delivered an open letter from African Civil Society to conference organisers and participants on the afternoon of Monday 16th March.

In it we raise the voices of African communities and civil society and call upon Chatham House to show genuine leadership of thought. They must recognise that now is the time to think of the future of people and planet, not the health of the extractive industries.

Not a land grab – a continent grab!

Mining companies have learned new strategies for pulling the wool over the eyes of unsuspecting members of the public who invest in their stocks and thus back up the atrocious actions of these companies.

Through public-private partnerships with mining and fossil fuel companies, governments and other public bodies are sucked into unequal partnerships.

For the companies these partnerships offer legitimacy, a better image and a social license to operate as supposed agents of development. For public bodies and governments the equality of these relationships is merely illusory. A few will benefit, most will not.

Chatham House’s conference directly promotes such joint initiatives to give the extractive industries further access to Africa’s wealth. Yet it is clear that tactics such as public-private partnerships, so-called corporate social responsibility, good governance and transparency are too often mere green washing initiatives.

Despite these token efforts, Africa is experiencing new levels of ecosystem destruction and the intensification of poverty in impacted communities as part of what the No REDD Africa Network have described as a “continent grab“.

The time has come to challenge out-dated gatherings like that at Chatham House that exclude the voices of the people. We must move into the present by envisioning a fossil free future, reimagining our systems of design, consumption and use.

This cannot happen whilst we continue to sugar-coat destructive, unsustainable mining. The level of destruction already inflicted on Africa is nothing short of ecocide.

Rather than finding underhand ways to exploit new mineral and fossil fuel reserves in Africa, extractive companies should be challenged to invest in clean-up and environmental restoration activities.

These companies must not be allowed to position themselves as saviours when they have been the abusers of the African continent. They must be held accountable.

 

 

Read the letter to Chatham House from African Civil Society groups and their supporters here.

Nnimmo Bassey is a published poet, head of Home of Mother Earth Foundation, Nigeria and former Chair of Friends of the Earth International. He also runs Oilwatch International. Bassey’s poetry collections include ‘We Thought It Was Oil But It Was Blood’ (2002) and ‘I will Not Dance to Your Beat’ (Kraft Books, 2011). His latest book, ‘To Cook a Continent’ (Pambazuka Press, 2012) deals with destructive fossil fuel industries and the climate crisis in Africa. He was listed as one of Time magazine’s Heroes of the Environment in 2009 and won the 2010-Right Livelihood Award also known as the ‘Alternative Noble Prize.’

Sheila Berry is a psychologist and long time environmental justice activist from South Africa. She is currently fighting alongside South African communities in KwaZulu Natal to protect the iMfolozi Wilderness Area from Ibutho Coal’s plans to build Fuleni open-cast coal mine just 40m from the park’s edge.

Both Nnimmo and Sheila are members of Yes to life, No to Mining, a global solidarity movement of and for communities who wish to say no to mining out of a shared commitment to protect Earth for future generations.

 




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London Assembly votes for £5 bn fossil fuel divestment – listen up, Boris! Updated for 2026

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Some victories are sudden and unexpected. Some take time, planning and weeks upon weeks of hard work. Today’s City Hall divestment victory falls into the latter category.

For months, the campaigners of Divest London have waged a less-than-silent war of persuasion, argument and charm on members of the London Assembly.

With the Green party as an ally, we fought to expand our influence on Labour and the Liberal Democrats. We prepared, we practiced and we convinced. We tweeted, we emailed, we called, we wooed.

And we won!

The London Assembly has voted – with an overwhelming majority of 15-3 – in support of fossil fuel divestment. Specifically, it has called on the Mayor of London to support divestment and on the £4.8bn London Pension Fund Authority to divest over the next five years.

This is no small feat. The motion – drawn up by Divest London and filed by Green Party Assembly Member Jenny Jones – will help to push fossil fuel divestment high up on the agenda for the 2016 mayoral race in the UK capital and square in front of Boris Johnson for the rest of his term. (You can read more about the motion here).

Now it’s over to Boris

This is a key moment for our campaign to get City Hall to go fossil free. The London Assembly is our voice in city government. The 25 elected members examine issues on behalf of Londoners and hold the Mayor to account.

Although Boris gets the final say, this positive vote at the Assembly is a key milestone for the campaign and gives us a strong mandate to put pressure all the way to the top.

Boris does not directly set the agenda for the LFPA, but he does appoint its chair and half of its board. This influence is significant given the political and financial scale of the Fund.

We estimate that the Fund currently invests upwards of £100 million in fossil fuel companies, including Shell and two coal companies – Rio Tinto and BHP Billiton – despite the fact that Goldman Sachs has warned thermal coal is reaching its ‘retirement age’, downgrading its long-term valuation by 18%. Meanwhile Ed Davey has singled out coal as “the short-term biggest worry by a long way.”

Boris Johnson is already behind on his climate adaptation and mitigation targets, receiving a 4.6 out of 10 scorecard from the London Assembly.

Perhaps most outrageously he had been accused by the head of the Met Office’s Climate Monitoring and Attribution Unit of “misleading the public” over spurious claims that global warming is due to solar activity.

Growing risk of ‘stranded’ carbon assets

If the Mayor refuses to divest, he will be forced to justify why City Hall is investing in companies that bank on the Conservative government, at both the city and national level, not enacting their emissions policies and not meaningfully tackling climate change.

This is what the major fossil fuel companies hope will happen. Shell and Exxon Mobil have written letters to shareholders saying they think it “highly unlikely” government will limit emissions in the way they have promised. We’re going to prove them wrong – starting today.

If Boris Johnson refuses to divest, he will be actively ignoring the wishes of the London Assembly, Londoners of all stripes – health workers, teachers, students, clergy members, lawyers and parents. He will also be willfully ignoring the warnings of the Bank of England, the Church of England, the World Bank and the UN.

Divestment campaigners claim that those invested in fossil fuels face serious risk from the prospect of ‘stranded assets’, which mean that the majority of reserves could ultimately be unburnable as governments worldwide consider committing to limit global warming to 2C, with global climate talks in Paris scheduled for December 2015.

Indeed, Carbon Tracker research has found that the London Stock Exchange is exposed to particularly high carbon risk, with a third of the FTSE 100 represented by resource and mining companies. And this exposure is increasing year on year; between 2011-2013, exposure to carbon (particularly coal) rose by seven per cent.

A recent London Assembly report cited the warning that, consequently, ‘London’s role as a global financial centre is at stake’. Over 250,000 individuals have their pension benefits invested in the LPFA. Most of them are unlikely to be aware that their money is invested in what Ed Davey has called ‘the sub prime assets of the future’.

Oslo, Oxford, Bristol – and now London?

This is only the beginning. Divest campaigns are springing up in city and borough councils all over the UK. If any of you have read the Guardian’s recent environmental and divestment coverage (which is excellent by the way) you can see that the divestment movement is going mainstream.

Indeed, it is no accident that this vote follows the massively successful Global Divestment Day – with its army of Boris Johnson lookalikes and 500 citizens rallying outside of City Hall – or the Time to Act! National Climate March last week with 20,000 people marching through London.

It is no accident that the vote comes less than two weeks after Oslo became the first world capital to support fossil fuel divestment, or after Oxford and Bristol City Councils have both divested.

Divestment is an idea whose time has come. More than 39 other cities in five countries worldwide have committed to divest from fossil fuels.  London can be on that list. London will lead on that list.

So – what are you on, Boris? You are in a position to do some real good for the city and to set an example for the UK and for, really, the world. You can be a leader in this fight for our planetary future or you can fall in line behind fracking CEOs and oil money.

Londoners and the London Assembly have sent a clear message. Are you listening?

 

 

Petition: ‘Divest City Hall from fossil fuel investments!‘

Source: Divest London.

 




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Save the Arctic sea ice while we still can! Updated for 2026

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Fossil fuel companies, and their supporters in government, seem blissfully unaware of the dangers ahead, threatening everybody on this planet.

The sea ice is declining far more rapidly than anyone expected. It is declining towards disappearance in summer months, yet the colossal negative impact of a low albedo Arctic has hardly been discussed. This is tragic because the whole situation could have been avoided with good leadership at negligible economic cost.

And as reported this week on The Ecologist, new scientific research indicates that the apparent ‘pause’ in global warming has, in fact, been no such thing. Instead the surplus heat – two Hiroshima bombs-worth a second – has simply been ‘buried’ deep in the Pacific Ocean.

That’s because of two important climate cycles, the Pacific Decadal Oscillation and the Atlantic Multidecadal Oscillation, whose operation has masked the warming. But soon they will tip the other way and the ‘Big Heat’ is set to begin – a five to ten year burst of rapid warming that will be most severe in the Arctic.

Commercial advantages for some …

If you read the mainstream media, only the positive impact of a melting Arctic is mentioned: an Arctic ripe for exploitation.

Through not grasping the huge negative impact of a low albedo Arctic, the fossil fuel companies still appear entirely happy for the sea ice to disappear as quickly as possible – the sooner the better. Therefore they naturally resist any action to save the sea ice. In particular they don’t want geoengineering deployed to cool the Arctic, because it might succeed in saving it!

Certain fossil fuel companies have already invested heavily in exploiting the vast store of oil and gas in the Arctic. These companies, and the governments who support them, are preparing for a bonanza when the sea ice disappears in summer: it will be so much easier and safer to extract the fossil fuel when the sea ice and freezing conditions have gone during summer months.

Furthermore, the disappearance of the sea ice will open up the Northwest Passage and the Northern Sea Route (formerly known as the Northeast Passage) to trade through summer months. So China and nations bordering the Atlantic (including the UK) are expecting to benefit enormously. Russia is investing heavily in ports and infrastructure to support the anticipated heavy traffic.

Various environment groups and the UK Environment Audit Committee have argued against drilling in the Arctic because they are concerned about oil spills and gas blow-outs which could ruin the local environment. They also seek to protect the wild life and Arctic ecosystem. But their arguing will be futile once the sea ice has gone in summer. It will be too late to protect the environment.

Environmentists have less concern about the opening up of the trade routes, because this will reduce CO2 emissions from transport of goods which at present have much longer journeys.

The Arctic bombshell is waiting to go off

While there is all this talk of exploiting the Arctic, little or nothing is said about the adverse effects of having an Arctic free of sea ice during summer months.

Nothing has been said by the IPCC. Nothing has been said in the mainstream media. Nothing has been said by the scientific community at large. This is a terrible omission. It is quite scandalous.

While most experts agree that there will come a time when the Arctic Ocean will be free of ice during summer months, there is no such agreement on the time-scale. Models suggest that it will take decades.

But observations of an exponential trend of sea ice decline suggest that this time could be within a decade. Scientific reports of especially rapid temperature rise in Alaska have also been emerged. For example Barrow, Alaska has experienced a 7C temperature rise over 34 years, attributed to the decline in sea ice.

So what are the effects? During summer months, a vast area of reflective ice will have been replaced by open water, absorbing 90% of sunshine and warming the Arctic air above. It is clear that the Arctic will be warming much faster than at present – likely at over 2°C per decade.

As heat dissipates around the planet, there will be a huge contribution to global warming in the long term. Estimates put this at equivalent of 3.3 W/m2 (Flanner, 2011) or about twice the current warming from CO2.

But what are the immediate consequences of this super-rapid warming in the Arctic? At present we have an acceleration of three particular processes, affected by Arctic warming to date:

  • Firstly, we have a dramatic rise in Northern Hemisphere weather extremes, as the jet stream behaviour is disrupted.
  • Secondly we have an exponential increase in meltwater from the Greenland Ice Sheet, flowing through moulins on the surface of the ice into the sea and raising the sea level.
  • And thirdly we have a dramatic increase in methane emissions from the Arctic Ocean seabed.

As the temperature in the Arctic continues to increase, these processes will continue almost indefinitely. We can expect worsening Northern Hemisphere climate causing widespread crop failures; faster sea level rise causing progressive flooding of low-lying regions; and growing methane emissions leading to even more catastrophic global warming.

These are three immediate results of the switching on of heat as the Arctic Ocean enters the low sea-ice state. The combination will be devastating for all mankind – with mass starvation and mass migration liable to trigger a world war.

This is the terrifying bombshell. The bonanza will be short-lived, as the effects of a seasonally ice free Arctic Ocean begin to bite.

For a few billion dollars a year, we can save the Arctic

Something must be done to prevent the ocean entering this low-ice state. Therefore the Arctic must be cooled enough to save the sea ice.

The first moment at the end of summer that the sea ice finally disappears from the ocean is called the ‘blue ocean event’. It is significant because it could mark the entry of the ocean into a permanent low-ice state for subsequent years – the point of no return. The point of no return could be a soon as next September.

By any ordinary standards, we have left it too late to cool the Arctic. But any reduction in the risk of passing the point of no return is worthwhile, when all our futures are at stake.

Fortunately researchers are increasingly confident that a stratospheric aerosol haze, produced from sulphur dioxide, SO2, could provide significant cooling of the Arctic for modest expenditure of the order of a few billion dollars per year.

This type of cooling could be replaced by cloud brightening using ultra-fine seawater droplets when the technology is ready for large-scale deployment within a year or two.

There should be no significant negative economic impact from this action, except that the resources in the Arctic become frozen assets. But they should be frozen assets in any case if global warming is to be kept below 2 degrees C, according to a recent paper.

There should be positive political impact, because governments will be working together in a common cause to protect their own citizens and all the citizens of the world. The fossil fuel industry has to be persuaded that preserving the Arctic sea ice is essential for the future of themselves and their stakeholders.

Objections from the anti-geoengineering lobby have to be overcome, because we have no other realistic option to reduce the colossal risk of passing a point of no return this September.

 

 

John Nissen is Chair of the Arctic Methane Emergency Group.

 

 




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China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

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China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




390825

China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

Leave a reply




China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




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China’s fossil fuel emissions fell 3% in 2014 Updated for 2026

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China’s coal consumption fell by 2.9% in 2014, according to newly released official Chinese energy data.

The data confirms earlier projections of a fall in coal use and 1% reduction in Carbon dioxide emissions from fossil fuel burning according to calculations based on the data (excel spreadsheet).

An initial analysis by Glen Peters suggests that equates to a 0.7% drop in overall emissions.

This is the first fall in China’s emissions from oil, gas and coal burning since the Asian economic crisis more than 15 years ago. It’s also the biggest recorded fall in 30 years, and the first time on record that emission fell while total energy consumption grew.

Coal consumption growth in China has been slowing down since 2012 suggesting that China’s coal use is no longer rising in line with economic output – so-called ‘de-coupling’.

Based on China Statistical Yearbook 2014, coal consumption growth slowed from an average of 6.1% per year between 2007-2011, to 2.6% on average between 2012-2013, while GDP growth averaged 10.5% and 7.7% per year, respectively.

Has China’s coal burn peaked?

China’s coal consumption growth was responsible for more than half of global CO2 emission growth in the past 10 years.

The fall in China’s coal consumption comes as China has set new global records for wind and solar installations and seen an increase in both economy-wide and power plant efficiency.

Ambitious policies to control coal use, spurred by the air pollution crisis, along with policies to diversify the economy away from energy-intensive industries, are strongly constraining coal consumption.

The country also appears to be moving away from plans to reduce pollution in urban areas by gasifying coal in more remote locations due to concerns over economic viability.

Though China’s coal use is unlikely to continue falling year on year an analysis by Greenpeace suggests that full implementation of China’s existing energy targets, including targets for renewable energy and controlling total energy consumption, could see coal use peak by 2020.

China recently required four provinces in the key economic regions to set absolute coal consumption reduction targets, in addition to four others that already have ambitious targets, the provinces consume over 600 million metric tons of coal per year, almost as much as India.

Coal generation capacity increasing – a contradiction?

While China’s coal consumption fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.

But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.

If there is one factoid that every media consumer knows about energy in China, it must be that the country is ‘building one coal power plant per week’.

While coal-fired power generation capacity growth has slowed from the peak years – 2006 saw the equivalent of 1.5 large units added every week – the rate of coal-fired power plant additions and construction initiations in China is still breathtaking

In 2014 39 GW were added, or three 1,000MW units every four weeks, up from 36 GW in 2013.

Coal plants built – but not used 

At the same time, power generation from coal fell by approximately 1.6% in 2014, due to record increases in power generation from hydropower, wind, solar, nuclear and gas, along with slower power consumption growth – contributing to the 2.9% overall fall in coal burning.

In fact, coal-fired capacity growth has outstripped coal-fired generation growth since 2011, leading to dramatically reduced capacity utilization (see graph, above right) and financial pain to power plant operators. The headline making the rounds in China is that capacity utilization, at 54%, was at its lowest level since the reforms of 1978, when statistics began to be made available.

The Obama – Xi deal on peaking China’s CO2 emissions before 2030 has grabbed the headlines in English-speaking media, leaving many observers with the impression that China is planning to slack for another 15 years before starting to pull its weight in cutting CO2.

However, real action is in the implementation of China’s energy targets for 2020 and the air pollution action plans for 2017. For the power sector, the most significant target is the objective for non-fossil energy to make up 15% of all energy consumed in China.

Hitting the 15% target will require raising share of renewable energy and nuclear power in power generation from 22% in 2013 to 33-35% in 2020. Gas-fired power generation is also forecast by the IEA to grow to around 5% of total power generation, implying that the share of coal will shrink to about 60% in 2020, from 72% in 2013.

This will require almost doubling non-fossil power generation from 2014 to 2020, meaning that, on average, non-fossil power generation will have increased as much as it did in 2014, every year until 2020.

As in so many other respects, the radical changes in 2014 were not a one-off anomaly, but the ‘new normal’.

No room for new coal power plants – so why build them?

As a result of booming non-fossil power generation, even assuming GDP growth of 7% per year until 2020, growth in coal-fired power generation will be limited to around 1.5% per year on average, slowing down towards 2020 as non-fossil generation additions are ramped up.

Together with a targeted 0.7% per year reduction in coal use per unit of power generated, this means that coal use growth in the power sector will average less than 1% and will stabilize before 2020. If capacity utilization is to return to financially sustainable levels, there is room for little more capacity to be added until 2020.

To grasp why coal-fired power plants can still get built in the face of a worsening overcapacity problem, it is necessary to understand the basics of China’s economic model.

The country’s growth miracle has been based on an economic system designed to enable extremely high levels of investment spending, particularly by state-owned companies and local governments.

These actors have a very liberal access to near-zero interest loans from state-owned banks, and state-owned companies are generally not required to pay dividends to the state, enabling (or forcing) them to re-invest their profits.

Investments do not need to be wise or profitable

Banks exercise minimal due diligence on loans, which have implicit government backing. As a result, investment spending now amounts to over $4 trillion per year, making up a staggering 50% of China’s GDP, higher than any other major economy in history, and compared to around 20% in developed economies.

This model served China well for decades, enabling the growth miracle and lifting hundreds of millions from poverty. However, finding profitable and sensible investment projects worth trillions of dollars every year is bound to become harder and harder as the investment boom goes on.

Recently published research estimated that 67 trillion yuan ($11 trillion) has been spent on projects that generated no or almost no economic output – ghost cities being the most famous example.

In this context, it is not too hard to see how investment in coal-fired power plants can speed way ahead of demand growth.

A new coal-fired power plant will still generate power and revenue even if there is overcapacity, as the lower capacity utilization gets spread across the entire coal power fleet and across all power plant operators.

What does continued coal-fired power buildup mean for the climate?

The conventional assumption in power business is that once a coal-fired power plant or other capital-intensive generating asset gets built, it will run pretty much at full steam for 40 years or more. Even if there is overcapacity at the moment, demand growth will raise utilization and the existing capacity will crowd out future investment.

However, this is not how things work in China. The government is not going to scrap the internationally pledged 15% non-fossil energy target for 2020 because of excess coal-fired capacity. Rather the overcapacity will lead to losses for power generators and will be eliminated by closing down older plants, as has happened with coal mining, steel and cement already.

Therefore, continued investment in coal-fired power plants does not mean locking in more coal-burning. It does, however, mean massive economic waste, and a missed opportunity to channel the investment spending into renewable energy, enabling even faster growth.

Furthermore, the underutilized coal-fired capacity can exacerbate the conflict between coal and variable renewable energy in the grid, as grid operators are known to curtail renewable power in favor of coal.

Hence, investment in coal-fired power plants needs to be rapidly scaled back by restricting approvals and finance. The first step has already been taken with China banning new coal power plants in its three key economic regions, home to one third of currently operating coal-fired capacity.

 

 

Lauri Myllyvirta writes for Greenpeace EnergyDesk on energy and climate issues in China and elsewhere.

This article combines two articles by Lauri Myllyvirta originally published on Greenpeace EnergyDesk:

 

Sources: The energy data is from China Statistical Yearbook 2014 except 2014 growth rates from National Bureau of Statistics of China: STATISTICAL COMMUNIQUÉ OF THE PEOPLE’S REPUBLIC OF CHINA ON THE 2014 NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT. February 26, 2015. CO2 emissions calculated using IPCC default emission factors. Oveall emissions data via @glenpeters. Graph of coal power plant utilization compiled from China Electricity Council statistical releases.

 

 




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