China is currently pursuing all kinds of policies that aim to cap domestic CO2 emissions. With the central government demanding local governments to reduce energy consumption and switch to renewable generation technologies, Shanxi Province is under pressure to radically reform its electric power sector. On October 25, Shanxi Provincial Party Secretary Lin Wu reportedly announced at a government meeting that 50% of the newly added generation capacity in his province from now to 2025, or the ending year of the 14th Five-Year Plan, will be coal-free. Moreover, the share of coal-fired generation in Shanxi’s electricity production will be limited to 30% by that same year.
As one of China’s main coal-producing regions, Shanxi has been ranked very high in terms of the amount of CO2 emissions, the intensity of CO2 emissions, and CO2 emissions per capita. Hence, capping emissions and achieving carbon neutrality present enormous challenges for the province. According to publicly available data reported by Chinese news media, the amount of excess coal production capacity that has been “retired” in Shanxi in the past five years comes to a total of 156.85 million metric tons. Shanxi now tops the ranking of provinces and regions by the amount of retired coal production capacity.
At the same time, Shanxi has been among the leading provinces with respect to the installations of renewable energy systems. The YoY growth rates of its wind turbine and PV system installations have reached 24.16% and 63.22% respectively. Also, the installed PV generation capacity that is related to the Top Runner Program in Shanxi now comes to 4GW. The province is placed high up in the ranking of the regions by the installed generation capacity related to the Top Runner Program.
Lin made the announcement when he was reporting to the 12th People’s Congress of Shanxi Province. During the meeting session, Lin stated that the provincial government will impose emission caps “in a progressive manner” and make emission reductions based on “reasonably scientific indicators”. While limiting its emissions, the province will also concentrate on improving energy efficiency as a way to reduce energy consumption. This means that the local energy sectors, or specifically the coal industry, will continue to lower the CO2 emissions and energy consumption per unit of output.
Lin also warned that the energy demand related to heating will be very strong in the coming winter months, and many communities are going to face a severe tightening of the electricity supply provided by coal-fired power plants. He expects Shanxi to be tested to see if it can maintain the pace of emission reductions while maintaining its own energy security. Lin said that local traditional industries have to heighten their awareness of potential crises and opportunities. Rather than just trying to get by, local industries are expected to upgrade their operations to a higher developmental standard. In particular, they have to support the initiatives to transform businesses involving coal production and coal-fired generation into businesses that provide integrated green energy services.
Looking specifically at the coal industry, Lin said the provincial government will “reasonably” limit production and vigorously promote greener methods for mining and processing. Plans are in the works to lower coal consumption and substitute coal with other sources of energy. These include setting up production capacity for alternative energies that will succeed coal and ramping up the development of smart technologies for coal processing. The local electric power sector, which has long relied on coal-fired generation, now has to overcome the challenges related to the continuing expansion of the deployment of renewable generation technologies.
“Shanxi has to take the transformative steps to not only make the utilization of its coal-fired generation capacity more flexible but also widen the adoption of technologies that reduce coal consumption,” Lin reportedly told the members of the People’s Congress.
This means setting up more advanced and higher-capacity coal-fired generation units, revising the scheme for basic and systematic power dispatch, etc. And at the same time, the province has to proactively develop new and clean energy technologies. Examples include raising generation capacity for wind power and solar PV, accelerating and promoting energy storage integration for coal-fired power plants, etc. Also, efforts will be made to methodically set up projects related to hydrogen, methanol, geothermal power, and biomass. Ultimately, the goal is to possess multiple complementing energy sources and unify generation, grid, load, and storage under a single system.
Although Lin and the government of Shanxi appear to be committed to curbing CO2 emissions through lowering local coal production and consumption, whether concrete actions will be taken remains to be seen. After all, many parts of China are currently experiencing electricity rationing that has to do with either a coal shortage or mandated emission targets. Also, Reuters just reported on October 8 that 98 coal mines in Shanxi have been told by the provincial authority to boost their annual output by a total of 55.3 million metric tons.
