“The best time to plant a tree was 20 years ago. The second best time is today”
China electricity: The simple view
A quick review of the 2019 electricity data from China shows basically a continuation of previous year trends.
Thermal electricity production increased 4%, which lower than the 7% growth of 2018, but broadly similar to the increases in 2017 and 2016. And, of course, in terms of carbon emissions the bigger base means that even small percentage changes are important.
On the positive side of the ledger, and – as ever – everything to do with China has at least two sides, wind, nuclear and PV are now 12% of output, although for wind the pace of growth was by China’s standards a pedestrian 10%.
China’s CO2 emissions from the increase in thermal electricity generation since 2014 amount to about 750 million tonnes per year (Australia’s total emissions are around 550 mt). We have used 0.8 t CO2/MWh and assumed this is constant over the 5 years. In reality the average intensity has probably declined slightly.
Nor do I get any sense right now of slowdown. China does both a great job, in publishing statistics promptly and in English but also a terrible job in that no January data is published and there is no seasonal adjustment or trend analysis.
Never fear, ITK has performed our own seasonal adjustment and we reckon output is growing at about a 7% annualized pace slightly above trend.
It really matters – a couple of climate charts update
Heres the global temperature (land/sea combined) graph updated to Dec 2019.
This comprises monthly data going back to 1899. There are literally thousands and thousands of measuring stations over the whole world and the data has been checked and rechecked on many, many occasions. This is my own graph using data from the National Oceanic and Atmospheric Administration in the USA. I’ve been updating this graph monthly from 2014. NOAA. Click here for Dec 2019 link.
The trend line is made by using Excel’s trend line function ( I used to use a 20 year monthly moving average but that lags the underlying trend)
Data are stated relative to the 20th century average (that is the temperature for each month of the 20th century or 1200 months)
Very few people actually know what the 20th century average temperature was. For the record its 13.9 C.
So you can think about 1 degree warmer or 2 degrees warmer relative to that benchmark. If you use Fahrenheit or Kelvin you might get a different answer, but there’s a reason most of the world uses Centigrade.
As the graph says its been 420 months, or 35 years since there has been a single month where the global temperature was below the 20th century average for that month. 35 years isn’t that long in the history of the world but it’s easily enough time for the facts to support the science.
And the energy ends up in the world’s oceans
90% of the increased heat from carbon forcing end up in the oceans just like heating your hot water.
The amount of heat added in 2019 was a scary 15 zetta joules. Zetta is 10^21.
By comparison all the world’s electricity generation in 2019 was about 27,000 terawatt hours (Australia 220TWh). 27,000 TWh is 0.1 Zettajoules.
All the world’s annual oil, coal and gas production combined is about 0.5 zettajoules per year.
The ocean heat content is mainly measured by the Argo buoy system (there are about 4000 of these buoys and they measure every 10 days) but there are lots of other measuring devices.
The academic article from which the attached graph is taken was only published a few weeks ago and has 14 authors, with 7 from China and 7 from the US. Of course, if you are one of those people who think all the world’s scientists are conspiring to invent a climate change scam you won’t care about their strong academic credentials.
If you are like everyone else you will find it sobering. You can see the acceleration post 1995 and the low margin of error.
Leaving aside the direct impacts which include thermal expansion of the ocean, impact on fish life, impact of warm water on ice (think Greenland and Antarctica) and the impact on ocean currents (think El Nino, Indian Ocean dipole, southern annular) the big concern is the thermal inertia which means all that heat in the ocean eventually has to be returned to the atmosphere.
But for now we can be confident the world’s oceans are getting warmer and this will have major impacts on our lives and the lives of our descendants.
The total heat/energy increase in the ocean relative to the 1981-2010 average baseline is a staggering 200 zettajoules.
That’s enough energy to “keep the world’s lights and other electric devices on” for about 2,000 years. It would be funny if it wasn’t so really serious. Clink here for reference link.
Are there any answers?
Yes a recent article suggests China could get rid of its coal fired power plants without any significant GDP impact.
This was another joint China/USA publication “A Hight Ambition Coal Phaseout in China” whose authors come from University of Maryland, the Energy Research Institute of China’s NDRC and the North China Electric Power University, and it breaks fantastic new ground by for the first time systematically laying out a specific pathway for China to phase out coal by 2050 or even earlier.
I would like to congratulate the authors on an excellent report that goes way beyond the usual “coal is bad” and “china has to have coal to feed the masses” type of generic posturing to doing the cold, hard analysis that provides the foundation for real debate.
I quote from the “methodology” in full:
“We first establish a five-dimensional framework for prioritizing the retirement of individual Chinese coal-fired power plants, based on technical attributes, profitability, environmental impacts, grid stability, and equity (Chapter 2).
We then apply this evaluation framework to more than 1,000 operating coal plants, 3,000 units in China, identifying a small fraction of plants that can easily retire first—the “low-hanging fruit” plants (Chapter 3).
Next, using the Global Change Assessment Model (GCAM-China) and the Integrated Policy Assessment Model of China (IPAC), we identify long-term emission scenarios consistent with global 1.5°C and 2°C goals for China and the corresponding coal power generation pathways. We then explore alternative coal retirement pathways based on different phaseout priorities and policy designs (Chapter 4).
Finally, we evaluate the potential impacts on grid stability, stranded assets, and other equity issues to identify the main challenges and potential policy solutions “
In essence the plan involves working out which plants can be most easily closed and or are the worst emitters. (I expect they will tend to be the same plants).
Using plant level data that I personally haven’t see previously published for China a retirement score is calculated for each plant based on technical attributes, profitability and environmental impacts.
For instance fantastic to see the graph below which shows startup (vintage) year and generation technology.
The combined score, where a low score is first to close is shown below. Note that the vertical axis is in GW (China may have around 1100 GW of coal generation by the time it has finished building the things).
A guaranteed life time yields lower cost to China than constant utilization
The study evaluated two different methods to manage coal plant phaseout.
1. Giving each plant a guaranteed life (but lowering utilization gradually)
2. Plants get to continue their current utilization but are retired as required by a 2°C or 1.5°C scenario.
The method used to differentiate is by calculating the “Stranded asset” value. This is a well accepted method measures unrecovered initial capital cost and unpaid expected returns difference per plant between modelled life in the retirement scenario and a 30 year design life.
Considering Australia, a 30 year design life makes me smile.
In addition to stranded asset losses there are also losses due to the lower utilization rate. As far as I can see the Study does not put those on a present value basis so we can’t really add up the numbers.
The study does not note that these would not be the only costs because of course there is also the replacement investment cost but in and off self US$100 billion is well within China’s capability, in my opinion.
The policy recommendation conclusions:
I can do no better than summarise what the report says:
“China can achieve a 2°C compatible coal power phaseout by 2050-2055 with little economic impact. A more ambitious 1.5°C phaseout by 2040-2045 is also feasible with a carefully designed retirement plan and a financial compensation mechanism.
Any new construction of conventional coal plants is not in line with China’s long-term deep decarbonization pathways. A total of 121 GW of coal plants are currently under construction and 74 GW planned, in addition to the 160 GW suspended. Building these new coal plants would largely increase the risk of stranded assets and shorten the lifetimes of all coal units
We identified 18% of existing power plants, or a total of 112 GW of capacity, as low-hanging fruit that need a rapid retirement in the near-term…. Self-use plants have a larger share identified as low-hanging fruit
The roadmap for retirement compatible with a well-below-2°C goal is based on an immediate halt to new construction of conventional coal plants, near-term retirement of low-hanging fruit, and then a gradual retirement of remaining plants based on their retirement rank score but with a minimum operational lifetime of 30 years. Applying this guaranteed lifetime will lower the average operating hours from today’s 4,350 hours to 3,750, 2,500, and below 1,000 hours in 2030, 2040 and 2050, respectively,
The roadmap for retirement compatible with a 1.5°C goal reduces the guaranteed lifetime to 20 years. Operating hours on average will decline to 2,640, 1,680 and zero hours in 2030, 2040, and 2045 “
David Leitch is a regular contributor to Renew Economy. He is principal at ITK, specialising in analysis of electricity, gas and decarbonisation drawn from 33 years experience in stockbroking research & analysis for UBS, JPMorgan and predecessor firms.