With the country's coldest and hottest records broken, what can we do?
A few days ago, the latest news released by the National Climate Center said that in 2023, the national average temperature will be 10.7 °C, 0.8 °C higher than normal, the highest since 1961. At the same time, in 2023, the records for the coldest and hottest in the country have been refreshed. According to the World Meteorological Organization's Interim Report on the State of the Global Climate, 2023 was the hottest year on record, with the global average temperature 1.4°C above pre-industrial levels. Global sea level rise and the retreat of the Antarctic ice sheet are both at record highs.
In December 2023, the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) concluded in the United Arab Emirates. In accordance with the provisions of the Paris Agreement, COP28 completed the first global stocktake, comprehensively assessing the progress made by countries in mitigating climate change goals, and was hailed as a milestone meeting by domestic and foreign media. COP28 culminated in the UAE Consensus, which for the first time included the "transition away from fossil fuels" document.
Zhou Dadi, a member of the National Climate Change Expert Committee and former director of the Energy Research Institute of the National Development and Reform Commission, told China News Weekly that in the era of "transition and deification", China cannot replicate the old path of developed countries to first convert natural gas and then develop new energy, and should take a new route of "establishing first and then breaking down, and reducing carbon emissions in an orderly manner". Domestic renewable energy has developed well in terms of production capacity and technical means, and the biggest problem to be solved urgently is how to quickly adapt the power system to the needs of low-carbon development. "The power system is like a car driver who has been driving for many years and now suddenly has to fly an airplane. Zhou Da said.
An imperfect but necessary multilateral process
After a one-day postponement, COP28 concluded on December 13, 2023 in Dubai, United Arab Emirates. Before the deadline for negotiations on December 12, delegates could not agree on wording on fossil fuels. That evening, there were intense negotiations between representatives on the final text. Eventually, the consensus on "transitioning away from fossil fuels" was born, which was the first time the word "fossil fuels" was mentioned in a COP consensus document. Sultan Jaber, UAE Minister of Industry and Advanced Technology and President of COP28, said after the meeting that the UAE Consensus (hereinafter referred to as the "Consensus") has hit the starting button to gradually end the fossil fuel era.
As an in-depth participant in several United Nations climate change conferences, Zou Ji, CEO and president of Energy Foundation China, told China Newsweek that the Consensus, as a global political decision, has made further arrangements for the implementation of countries' nationally determined contributions (NDCs), and urged countries to fully update their NDCs at COP30 in Brazil in 2030. Zhou Dadi said that the importance of COP28 lies in the fact that it has maintained the basic plate of the Paris Agreement to strive for the 1.5°C warming goal and firmly established the general direction of energy transition.
Zou Ji said that the heated debate on the wording is not absent from every COP, and this debate is based on the scientific basis shown in a number of IPCC reports. Since the first conclusion of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, several major issues of climate change, including mitigation, adaptation, finance, technology transfer and capacity-building, have been established. At the heart of the mitigation agenda is the reduction of fossil fuel use, the reduction of atmospheric greenhouse gas inputs, and the slowing down of global warming. The progress of the Consensus is that it will move from slowing down to disengagement, but it is still a compromise to phase out completely.
James Hansen, an American climate scientist and adjunct professor at Columbia University, told China Newsweek that creating a friendly environment for future generations requires three basic actions, the results of which were published in the academic journal Oxford Open on Climate Change in March 2023, and Hansen is the first author of the study. These actions range from economic incentives such as carbon taxes to greater international cooperation in science and technology, as well as more radical measures, such as the injection of atmospheric aerosols to reflect solar radiation, in order to control the greenhouse effect. Hansen concluded that the above-mentioned actions were not included in the Consensus, and at the same time, it was difficult for the COP to use strong means to urge countries to implement the agreement, resulting in the low effectiveness of the Consensus and the difficulty of accountability.
The climate finance process exemplifies the weak binding force of the Consensus. At the 2009 Copenhagen climate conference, developed countries pledged to provide $100 billion a year in climate assistance to developing countries by 2020 to help them reduce carbon emissions and cope with the effects of climate change. Later, the pledge became an important part of the 2015 Paris Agreement. However, non-legal "consensus" and "agreement" make these commitments easy to be empty promises. Su Wei, China's chief representative for climate negotiations, told China News Weekly that the current US$100 billion target is still a "muddy account", and the stocktake extends the fulfillment period of the pledge to 2025, but the normalization of the financial mechanism after that is still a problem.
The Adaptation Gap Report 2023 released by the United Nations Environment Programme (UNEP) in November 2023 pointed out that the adaptation finance needs of developing countries are 10~18 times higher than the existing international public finance flows. The Loss and Damage Fund, adopted on the first day of COP28, ended up raising around US$700 million in funding, representing only 0.2% of developing countries' adaptation finance needs.
In Zou Ji's view, the lack of binding force is an inherent weakness of the multilateral process. COP28 has a total of 196 parties, including developed and developing countries, and can also be subdivided into oil export organizations, small island states, least developed countries, etc. Their vested interests and positions are very different. For example, oil exporting countries such as the United Arab Emirates, Venezuela, and Nigeria rely almost entirely on oil for their national economies. Countries such as China, Indonesia, and South Africa are highly dependent on coal, with coal accounting for more than 50% of China's primary energy. Even developed countries, such as the United States, have gone from being a consumer of oil and gas to an exporter, and their economies are still dependent on fossil fuels. Therefore, the energy transition is a global task that involves fundamental changes in the global economy. The outcome of the COP is usually "no one is satisfied, but everyone can accept it", which is typical of multilateral processes.
"At the moment we are still inseparable from the multilateral process. Zou Ji said that the climate governance system based on the multilateral process plays a political programmatic role, and the political message sent by the consensus and agreement and the global goals set by the agreement are still very necessary. At the same time, however, it is clear that the multilateral process alone is not enough, because where there is a compromise, there is a gap between the ideal and the reality.
How to make up for the weaknesses of the multilateral process? Zhou Dadi pointed out that climate negotiations should further emphasize the role of major countries, especially the role of economies included in the G20 and other countries. As a G20 subordinate to the main forum for international economic cooperation, the G20 covers multiple economies such as China, the United States and the European Union, and contributes 80% of global carbon emissions. The policy objectives, technological changes, and transformational actions of these countries or economies will largely determine the speed, intensity, and even success or failure of the multilateral process.
Su Wei pointed out that cooperation among major countries has shown its edge in the process of promoting the COP consensus. In 2014, the U.S.-China Joint Statement on Climate Change issued by the U.S. and Chinese heads of state laid the foundation for the Paris Agreement the following year, just as the Sunshine Country Statement on Strengthening Cooperation to Address the Climate Crisis issued by China and the United States in November 2023 was to the Consensus. Zou Ji said that this is in line with the practical law of modern international multilateral politics.
Zeng Ming, director of the Energy Internet Research Center of North China Electric Power University and director of the Energy Internet Special Committee of the China Energy Research Society, told China News Weekly that after COP28, most countries may be more cautious in terms of new energy development, carbon reduction targets and climate change measures than during the Paris Agreement. All countries need time to explore new forms of new energy and new models in order to achieve a steady and gradual transformation. Zou Ji expects that in terms of NDC, countries will remain aggressive until at least 2025, and the NDC of COP30 will present stricter and more ambitious emission reduction targets.
Strictly control the increase in coal
In addition to the "transition decoupling", another striking outcome of the Consensus is the two specific goals of the global new energy transition, that is, calling on countries to triple the global installed renewable energy capacity by 2030, and the average annual rate of global energy efficiency improvement to triple.
Zou Ji believes that the transition is not a hard landing, and countries have different time frames, and in general, they should follow the route of establishing first and then breaking down, and gradually and orderly to achieve liberation. The specific timeline for countries to "transition and de-escalate" depends on three fundamental factors. The first is the life cycle of existing fossil energy assets, production capacity, infrastructure, etc. In China, for example, the country's largest fossil fuel assets are currently the power generation centers of thermal power plants. The average age of generator sets is 14 years, the normal life span is 30 years, and it is conservatively estimated that most of them will end their life cycle after 20 years. In addition, fossil energy itself also has a "life cycle", and its mining reserves are limited, and its economy and convenience will decline as the difficulty of subsequent mining increases. From the perspective of resource reserves and facility life, fossil energy needs to be replaced urgently in the future, but for different countries, the urgency is different.
The second factor is the technology iteration cycle of alternative energy. Wind and solar energy in renewable energy are inexhaustible, and there is no natural life of the resource, so the development speed of its application depends on the iteration speed of the technology. Zou Ji pointed out that the cost of PV power generation in China has fallen by more than 90% in the past decade, and this trend continues. According to a research report released by energy consulting firm Wood Mackenzie at the end of 2023, the production cost of PV modules in China has dropped by 42% in 2023, and energy storage technology has also entered a significant cost decline period in the past five years, which is closely related to the development of related technologies and production capacity.
The third factor is the economic boom cycle of the economic system itself. Zou Ji said that for a certain period of time, the country's macro fiscal and monetary policies are in loose mode, which will stimulate the rise of investment levels, and China is in the early stage of a new round of high-investment economic window, which can theoretically last for 5~10 years or longer.
Zhou Dadi analyzed that from the steam engine to coal, and then to the large-scale industrial application of fossil energy, the traditional energy system is laid by a few developed countries. Developed countries have also taken the path of high-fossil energy development, and the first step of their energy transition is to complete the process of replacing oil and gas with coal, and the second step is to develop renewable energy. At present, China does not have the time and resources to realize this process, so it needs to take two steps and develop a transformation situation of "multi-wheel drive" and "multi-energy complementarity". As the price of renewable energy drops and the technology matures, the country's new electricity demand should be filled by non-fossil energy sources. Chen Chao, marketing director of Xiamen Kehua Digital Energy Technology Co., Ltd., recalled to China News Weekly that some practitioners in the new energy industry once had certain cognitive biases, believing that "new energy should reform the life of traditional fossil energy", but now it is very narrow. In fact, the two are not opposites, but combined.
Sun Rongfeng, a researcher at the Energy Research Institute of the Shandong Academy of Sciences, told China News Weekly that there are two things to be done in the energy transition. The first is the transformation of stock. The function of the existing fossil energy installed capacity should be changed from the main power generation force to the auxiliary or back-up of new energy power. At present, the annual power generation hours of domestic thermal power units have fallen below 4,500 hours, and they have gradually begun to transform to full-time power. Actual carbon emissions are closely related to the number of hours of electricity generated, and this transition is a necessary part of the energy transition. The second is incremental control. In the future, the increase of thermal power will be strictly controlled and replaced by the increase of renewable energy, which will be stabilized and regulated through more flexible energy storage and nuclear energy. It can be seen that thermal power units will continue to exist as emergency units for a long time, but their role will be significantly weakened when the carbon neutrality goal is reached in 2060.
Du Xiangwan, an academician of the Chinese Academy of Engineering and an adviser to the National Climate Change Expert Committee, told China News Weekly that strict control of coal increase is a means for China to achieve its "dual carbon" goal, and it is also a universal path for the global new energy transition.
China's current NDC target is clear, with a total installed renewable energy capacity of more than 1.2 billion kilowatts by 2030. According to the latest data from the National Energy Administration in December 2023, China's new installed power capacity in 2023 will be about 330 million kilowatts, with a total installed capacity of 2.9 billion kilowatts, of which the total installed capacity of renewable energy will reach 1.45 billion kilowatts, accounting for more than 50% of the country's total installed power generation capacity, historically surpassing the installed capacity of thermal power. The plan has become a reality. Zou Ji pointed out that the total installed capacity of new energy in China in 2020 will be 930 million kilowatts, and it is not difficult for China to increase production capacity represented by installed capacity in 2030, and it is more important to work energy efficiency.
Cracking the "impossible triangle" of energy
The energy efficiency of new energy is largely determined by the effective installed capacity, that is, the installed capacity of new energy that is put into power generation. Zou Ji believes that it is relatively easy to install solar panels or wind turbines, but the difficult part is the power generation process after assembly. Wind and solar are intermittent energy sources, and their stable supply depends on the efficient dispatch of the power grid and sufficient energy storage regulation. The interconnection and global deployment of power grids, including energy storage, is the biggest test of new energy transformation.
Zeng Ming believes that multi-energy complementarity is not an expedient measure, but a necessary means to promote energy transition and solve the "impossible triangle" of energy. The "impossible triangle" theory originates from the field of financial policy, and in the field of energy, it refers to the inability to achieve the security and stability of energy, low price, and clean and low-carbon, which is determined by the endowment of energy itself. Zeng Ming said that in order to achieve a safe and stable supply of energy, it is necessary to have more sophisticated operation and maintenance and stronger emergency reserves, which means that the cost increases, therefore, the exclusion of environmental protection input; if the increase of environmental protection investment, it will reduce the production economy, increase the complexity of equipment and processes, and sacrifice part of the safety; in principle, multi-energy complementarity can learn from each other's strengths and make up for each other's weaknesses, and make a smooth transition.
But multi-energy complementarity is not always efficient. Zhou Dadi said that because new energy generation "depends on the sky", power output is usually unstable. For the grid without energy storage, the basic power generation mode is "how much electricity is generated", and the supply and demand of electricity in the grid must be balanced in real time. It is unrealistic to order how much electricity PV or wind power can generate within a certain time, and it is basically regulated by thermal power at present. However, in order to survive, thermal power plants must have a fixed allocation quota for power generation time, and the cost of starting and stopping their units is huge. This kind of planned energy is not suitable as a "crutch" for new energy.
In addition to safety, this instability has also created a problem of localized overcapacity. Sun Rongfeng said that at present, the enthusiasm for photovoltaic households in the country is very high, especially in rural areas, and the rapid development of distributed rooftop photovoltaics has brought about the problem of renewable electricity consumption. The average self-consumption of farmers' photovoltaic power generation accounts for only 30%, and there are 70% of the electricity that needs to be connected to the Internet.
Regarding the difficulty of connecting the surplus capacity of new energy to the Internet, many countries around the world have explored solutions. In 2023, the installed capacity of natural gas power generation in the United States will continue to increase, and it has replaced coal as the dominant power generation force, Zou said. Distributed natural gas and distributed photovoltaic power in the United States are mainly connected to the Internet through bidding, and there is a perfect time-of-use electricity price mechanism, and the electricity price during the peak period is much higher than the average electricity price. This is one of the reasons for the rapid growth of residential, commercial and industrial PV in the United States, where renewable energy currently accounts for 21% of total electricity generation. Germany, which accounts for nearly 50%, participates in the electricity market bidding according to the zero electricity price, and the actual settlement of electricity prices also includes government subsidies, so as to ensure priority access to the grid.
Zou Ji told China News Weekly that if the proportion of new energy increases, it will come to the "no man's land" of energy transition, and it will be difficult to predict whether new problems will arise. Due to the high proportion of new energy and the obvious fluctuation of wind and solar power, Germany has to rely on cross-border contact lines to access the power resources of other countries to balance the fluctuation of its own power in addition to relying on its own coal and gas power generation. Therefore, there is a possibility that new energy grid and power grid regulation may constrain each other.
Sun Rongfeng said that one of the solutions in China is gas regulation. The start-stop and regulation capabilities of natural gas generator sets are better than those of thermal power, and the response speed is sensitive, which is safer and more environmentally friendly for the bottom line. Another solution is to vigorously develop new energy storage, especially distributed energy storage based on electrochemical energy storage and close to the end user side, which can adapt to the multiple needs of the source, grid and user sides at the same time. Distributed energy storage can not only provide flexible regulation of electricity, but also realize the renewable electricity consumption of end users.
Du Xiangwan told China News Weekly that the energy transition can and must turn the "impossible" into "possible", and the key is to make renewable energy from intermittent energy to flexible energy. This means that countries must vigorously develop energy storage and promote the construction of new power systems. In addition to technological breakthroughs, institutional innovation is also needed, and how to access the network is a major challenge for new energy. At present, the domestic power grid and distributed renewable energy lack efficient coordination and coordination, and the transition to smart grid will be the focus of energy transition in the future.
Only by "working together from top to bottom" can we decarbonize in a steady and orderly manner
In 2023, PV-Tech, a media outlet for the PV industry, announced the "2022 Global Top 10 PV Module Supplier Rankings", with Chinese companies occupying eight seats. Zou Ji pointed out that at present, the domestic photovoltaic industry has become a new driving force for national economic growth, with trillions of fixed asset investment and more than 2 million employees. What does not match it is the overall low degree of marketization of new energy.
Zou Ji said that the new energy industry chain is long, the degree of marketization of upstream equipment manufacturing is relatively high, and the degree of marketization of the source side and the end user side is rapidly improving, but the degree of marketization of the power grid is low, and the new energy is not suitable for the traditional power grid, resulting in difficulties in accessing the Internet. At present, the domestic power grid is mainly a centralized large power grid, and there is a natural monopoly market structure. Ideally, the new power system of the future should include a highly competitive and flexible market.
Sun Rongfeng reminded that the pricing of renewable energy participating in electricity market transactions should not only be based on the actual cost of power generation, but also consider trade risks. For example, the European Union's formal passage of the Carbon Border Adjustment Mechanism (CBAM) Act in May 2023 has led to many domestic export-oriented companies being restricted by high carbon tariffs and having to expand the use of renewable energy. At this time, the value of renewable energy is not limited to the price of products, but also includes the comprehensive benefits of reducing tariffs and improving product competitiveness brought about by the adoption of new energy sources. These should be factored into the combined cost of energy.
Zhou Dadi believes that the operation mode of the traditional power system needs to be improved urgently, and the reform of the power system needs to seek market-oriented solutions. At present, new energy has a lot of profit margins, and the cost of renewable energy power generation is significantly lower than that of thermal power. Some domestic system solutions have begun to emerge, such as photovoltaic power generation, UHVDC transmission, and new energy vehicles to form a supply-transmission-use industry chain, which is expected to achieve the common development of the three-dimensional goals of safety, cleanliness and economy. Energy storage plays a pivotal role in this industry chain.
Chen Chao introduced that the positioning of energy storage in the new power system is like an energy sponge, which plays a supporting and regulating role in key links such as power generation, transmission, distribution and use. At present, there are two types of energy storage that are developing rapidly, one is the source side and the other is the grid side. The source side refers to the direct distribution of energy storage on the wind and solar field station. Grid-side energy storage refers to flexible energy storage with uncertain locations in the grid system, which is still in the emerging stage of development, which can theoretically provide auxiliary services for wind and solar power generation, as well as support for regulation and expansion of thermal power and power grids.
In 2022, the National Energy Administration (NEA) issued the "14th Five-Year Plan for the Development of New Energy Storage", proposing a two-step strategy for energy storage development, that is, the transition from demonstration to early commercialization, and then to full marketization. Chen Chao believes that the development of energy storage is still in the first step, and some sustainable and propulsible business models are still needed to accelerate the marketization process. At present, energy storage has a small installed capacity, scattered deployment, and relatively difficult scheduling, and cannot compete with traditional regulated power such as thermal power and pumped storage. This increases the cost of energy storage in disguise. However, Chen Chao believes that as long as the general direction of "transformation and deification" does not change, the value of energy storage as a flexible power resource will become greater and greater.
Different from the development path of new energy sources such as wind and solar, the development of the energy storage industry represents a "bottom-up" commercial exploration model with enterprises as the main body. Chen Chao pointed out that enterprises can boldly explore the path of marketization within the framework of the current law and the operation mechanism of the power system.
Zhou Dadi believes that if countries want to strive to achieve the 1.5°C goal, they must consider regional and sub-industry carbon peaking in advance. The development of the new energy industry and the improvement of low-carbon supply capacity are themselves a kind of reversal to the energy transition. In 2023, domestic wind and solar power generation will account for 15% of total power generation, which is still lower than that of European and American countries. Only by putting forward reasonable carbon reduction targets at the top level, exploring and adapting to the technical path at the bottom, and cooperating with the top and bottom, can we achieve steady and orderly decarbonization.
Zou Ji said that there is also a problem of "coordination between the top and bottom" in international climate negotiations. Trade is a good model for international cooperation, but geopolitics is playing a role in different parts of the new energy industry chain. Taking photovoltaics as an example, the crystalline silicon raw materials, cells, solar modules and other equipment required for them have formed a global trade pattern. In 2022, China exported a total of 150 million kilowatts of photovoltaic modules, the vast majority of which went to the EU market. The latter has begun to worry about over-reliance on China's PV raw materials, so there are policies such as over-subsidy investigations and CBAMs. The United States has also conducted anti-dumping and anti-subsidy investigations on China's photovoltaic products for a long time, and the result is that the tax rate on photovoltaic products has increased and the export of products has not been smooth, which is contrary to the general trend of energy transition, that is, "up and down".
In Zou Ji's view, the so-called "down" also includes a variety of non-party stakeholders outside the trading system, such as international academia, the business community, non-governmental organizations, think tanks, etc. Intergovernmental negotiations set broad strategic objectives and are at the heart of international cooperation, but non-party stakeholders are likely to be at the heart of policy implementation. For example, the R&D and investment activities of multinational corporations, the continuous breakthroughs in technical details in academia, and the promotion of transformation at the sub-national and regional scales such as provinces and states are all bottom-up transformation forces, which, combined with top-down strategic goals, can form a richer global climate governance ecosystem.
A number of respondents said that the annual reduction in the cost of new energy and the gradual increase in competitiveness have injected internal impetus into the global energy transition. From an external point of view, the United Nations, as an intergovernmental organization, has weak restraint on major powers and has surpassed the global levelsovereigntyStrength is still lacking. In this context, political coordination with extensive consultation and global coordination mechanism at the core is an important driving force for the world's energy transition.
At COP28 Energy Day, the Global Energy Interconnection Development and Cooperation Organization, the first international organization in the energy field initiated by China, released a report entitled "Global Energy Inclusive, Just and Resilient Transition - Plans and Practices", proposing specific pathways to accelerate the transformation of the energy system. Zou Ji believes that there is a consensus to promote the energy transition based on the principle of equality and win-win results, and "eventually people will realize that no country can be immune."
