China's appetite for energy is enormous.
The country consumes about a quarter
of the world's energy supply,
35% more than the U.S. annually.
Its energy needs have more than tripled since the year 2000.
That consumption has helped to fuel astonishing growth,
but it's come at a cost.
China is the world's largest greenhouse gas emitter.
There is no way to tackle climate change
unless China reduces its emissions to net zero.
The country's reliance on fossil fuels is also a hindrance
to its own growth and the wellbeing of its citizens.
China is not energy secure.
It has a massive import bill for things like oil and gas.
It has a longstanding pollution problem,
and it is also prone to outages
that severely hamper industry.
All this has led the world's biggest polluter
to take steps towards a radical transformation.
President Xi Jinping outlined his plans
to make China carbon neutral by 2060.
COVID 19 reminds us that humankind
should launch green revolution
and move faster to create a green way of development.
China's high level goals are that within this decade
it's going to peak its carbon emissions.
And then it's going to go to net zero by 2060.
So that gives it approximately 40 years
to do something that no country has achieved,
let alone something like the size of China.
As the world starts to turn away from fossil fuels,
China is positioning itself as the king of clean energy,
not only transforming its own energy system
but also building a supply chain that could leave the world
uncomfortably dependent on China for its energy needs.
China has really expanded its grip.
So it's the processing, it's the manufacturing,
it's all the way down to your EVs and your battery packs.
How the West deals with that,
they're going to have to be a bit creative.
What China plans to accomplish
by 2030 could determine the shape
of the global energy system of the future.
At the end of the last century, China was on the cusp
of an economic revolution.
In 1990, its GDP was only 6% that of the US,
and its energy use was only 34%.
But the economic reforms of the '80s and '90s
started the process of privatizing industry,
and opening up to trade with the rest of the world.
By the time it joined the World Trade Organization in 2001
China was well on its way to becoming the world's factory
with booming energy needs to match.
The history of it is really dramatic.
I think just the condensation,
really China is doing industrial revolution
a hundred years after that,
all of that in a very concentrated period of time.
So what we saw is obviously dramatic change in terms
of energy consumption, and there were power crunches
in the early years, really the system was still
trying to cope. Dramatic addition of coal fired plants
in particular to deal with that.
From a climate perspective, the position was,
well, you had your turn, now it's our turn.
When you were growing, you as the West,
there was no question of what carbon was doing.
You did whatever you wanted, now it's our turn.
That really changed in 2008, 2009.
And that coincides with an awareness of air pollution.
In Beijing, which is facing another smoggy day.
Some environmentalists say it is the worst air on record.
Beijing was famously the most polluted city
in the world for almost a decade.
It also became very clear to its leadership that
that kind of growth will be unsustainable,
not just from a fact of putting out lot of emissions,
but from a fact that much of the fossil fuel consumption,
for example oil and natural gas will have to be imported.
And that's something China wanted to walk away from.
So starting about 2010, China committed to increase
its deployment of renewables.
China, like many other places in the world, was faced
with initially very non-competitive on a cost basis
economics for solar projects, for wind projects
and being able to subsidize the manufacture
of the key components,
ensuring the power that they sell has an attractive rate.
All of these things, China has done very, very well.
You push the market into existence
and then you're able to pull back
with some of the policy mandates
because now it just makes good economic sense.
China's investments in renewables helped drive
astonishing price drops across the industry
leading to record levels of new wind and solar installations
all over the world in recent years.
Last year, wind and solar generated more than 10%
of the world's electricity.
Still renewables only make up a tiny fraction
of China's energy mix today.
China is overwhelmingly dependent on fossil fuels
at the moment.
And within that if you look at power generation,
it's overwhelmingly coal, roughly 60%.
Wind, biomass, solar remain a much, much smaller fraction.
There was pressure building up on China
for quite a few years that China needs to do more
to cut emissions.
And that finally sort of came together in 2015
at the Paris Agreement when China agreed to sign it
alongside the US and pretty much
every country on the planet.
That bit of diplomacy was crucial to take China
to the next stage, which is when in 2020, it declared
that it will set a net zero goal.
And in a way it was a coup for China
because it set that goal even before
the US could have done so.
China's decarbonization plan ramps up gradually
with fossil fuel emissions increasing
for a few years before peaking in 2030.
From there they've given themselves another three decades
to get to net zero, with 80% of energy
coming from carbon free sources by 2060.
Getting there will be a massive undertaking,
and it starts with renewable megaprojects
on a scale seen nowhere else on Earth.
So late in 2021, we took a reporting trip to Qinghai
in western China.
It's quite wind swept.
It's a very sunny part of the world.
Very low population density.
We went to a facility that was spread out
over 600 square kilometers, about the size of Singapore.
In that facility, they have a hydro dam,
they've got a massive solar buildup,
and they're adding wind installations as well.
When all of that is up and running,
it's going to be producing nearly 20 gigawatts of energy.
It's enough to cover the power needs
at any given time for Israel, for example.
By 2030 China plans to up to 1.2 terawatts
of wind and solar capacity, enough to meet
all of the US' electricity needs today.
But it's not enough just to generate that power.
Getting the power where it needs to go
is a mega project in itself.
In order to ship all that electricity,
China has basically built this huge network
of ultra high voltage power lines.
And they're designed to get all of this energy
from the west to where it's needed
in the population and industrial centers of the east.
Power lines might seem like a mundane piece
of infrastructure, but they're actually a crucial piece
of the decarbonization puzzle.
A conventional AC power cable loses a lot of electricity
over the course of hundreds of miles.
Hence the need for these specialized direct current lines.
What they do is they reduce the wastage that may happen
on the way to transport this electricity.
There are only two countries in the world where
these cables are operating, China and Brazil.
Brazil has two of those cables, China has 25.
By far and away, China is absolutely the leader on this.
And the amount of money that you're talking about,
I mean, it's hundreds of billions of dollars
that they're going to be spending on this in coming decades.
As China goes towards a net zero goal,
its leadership has recognized that there is no way
China can meet those goals
without having what's called firm clean power.
The idea of firm clean power is that you're able
to generate carbon free electricity when you want it,
rather than relying on when the sun shines
or the wind blows.
Nuclear power satisfies those conditions quite well.
In most countries, the nuclear industry is struggling,
facing huge upfront costs, regulatory hurdles
and negative public opinion.
Still it is a carbon free source of reliable power,
and many environmental advocates see it as a key
to the green transition - as does China's leadership.
China plans to build 150 new reactors in the next 15 years
which is more than what the entire world has built
in the last 35 years.
Nuclear isn't seen as controversial in China,
or at least we don't know if it is.
It's not clear whether China's own population
supports it or opposes it
because they're not allowed to protest
and show their opposition to a certain technology.
That still leaves the difficult economics of nuclear,
the high upfront cost of building new reactors.
Here too, China may have unique advantages.
One thing that we all know China really excels at doing
is building huge infrastructure quickly.
After decades of building bridges and skyscrapers,
and high speed rail, and ultra high voltage lines,
like every super massive industrial project
that China has built, that know-how goes into also building
nuclear power plants.
When you build projects consistently on schedule
and on budget, you actually get to realize the benefits
that were imagined back when the project was being planned
like stable, low cost electricity
at a certain rate, at a certain production cost.
China's efforts to decarbonize are likely
to have many positive effects on its domestic energy supply.
But that's not the only reason China has gone all-in
on clean energy.
China certainly wants to meet a net zero goal,
but it also wants to be a country that is making
a lot of money exporting the technologies
that will clean up the energy system globally.
China is incredibly important when we think about
the supply chain for green technology in general,
the green economy, whether that's solar panels, or turbines,
or the elements that you need to process
along the way, incredibly significant.
China basically accounts for something
like 75% of the world's supply chain for solar.
Anything that you're going to do in the States or in Europe,
I mean, at some point Chinese companies
will have been involved in this.
That dependence on China has lately been
a source of strain.
Last year, COVID related production issues in China
caused the price of of solar panels to rise
for the first time in decades.
And some companies have pledged
to take their business elsewhere
due to reports of human rights abuses
in the majority Uyghur province of Xinjiang
which produces most of the world's polysilicon,
a key material in the manufacturing of solar panels.
Obviously there have been accusations in the west
that the Uyghurs are subject to forced labor.
The industry and the Chinese government have denied this.
Some in the west are also concerned
about China's dominance over the materials
needed to make lithium iron batteries.
Cobalt, for example, is a scarce mineral produced mainly
in the Democratic Republic of Congo
where China has bought up most of the supply.
The Congolese government has recently pushed back
against those efforts, alleging poor working conditions
and unpaid debts by a Chinese mining company.
But the majority of cobalt-producing mines there
are still at least part Chinese-owned.
Crucially what China's done is it's also made
the processing of these metals into the chemicals
that eventually go into batteries an almost monopoly.
The processing capabilities of China
outstrip those of all the rest of the world combined.
I think any kind of excessive dependency is problematic,
and energy dependency is no different.
Think about Europe, Europe's dependency on Russia for gas,
how problematic that has been.
So if we're going to have that the West as dependent
on China for renewable energy, for green economy ingredients
it is not going to be a healthy situation.
My instinct is that these things are not done
for a nefarious purpose, right?
To dominate the supply chain
in a way that is disadvantageous to another country.
But, you know, that the primary consideration
is what is good for China.
I mean, remember we're coming from a period of
not so long ago, late '90s, early 2000s
when China had rolling blackouts all the time,
and we've got all this investment
into making sure it can't happen again.
From the way people talk about it here,
they believe in the mission and the mission is
stable, secure energy for the Chinese people.
Electricity rationing is being imposed
in more than half of China's provinces.
Power shortages are still ongoing.
I think we've got a count of 20 provinces,
where there are electricity curbs.
Recently, China has been having flashbacks
to the bad old days of blackouts and power rationing.
A sudden spike in the price of coal
led to widespread power shortages,
leaving the government little choice,
but to rational electricity and ramp up coal production.
It's indicative of a major flaw
in China's decarbonization plan:
even as they add world historic levels of renewables
they largely cancel out those gains
with new fossil fuel additions.
And so this is the central challenge
because as your economy grows,
and even as you add all of this renewable capacity,
you still need to make sure that the coal supply is flowing
in order to keep the lights on.
That's going to be the big challenge for policy makers.
Even China's world leading investments
in carbon-free energy
may not get them to their targets on time.
But Beijing has recognized that the economic, political
and environmental rationales
for clean energy now vastly outweigh the costs.
When it comes to the 2060 neutrality target,
obviously China's a long way off,
and it's a huge, huge, audacious target.
The people that are the top leaders that are planning it
out right now, they probably won't even be around
to see it, right.
Will they make it?
I don't know.
It's a huge, huge goal,
but they believe they're going to make it.
What I can tell you is they're certainly going to try,
and they're certainly going to spend a lot
of money trying to get there.