How China's 13th Five Year Plan Climate and Energy Targets Accelerate its Transition to Clean Energy

With the release of the overall 13th Five Year Plan for Economic and Social Development this month at the joint meetings of the National People's Congress and People's Political Consultative Congress, China has shown that it intends to continue and strengthen its efforts to transition its energy structure from coal to cleaner energy sources.

China's two key energy and climate targets, energy intensity reduction and carbon intensity reduction, move in different directions for the 13th Five Year Plan, compared to the levels set in the Twelfth Five Year plan, with energy intensity decreasing from 16% to 15% and carbon intensity increasing from 17% to 18%. China managed to overachieve both targets in the Twelfth Five Year Plan, with energy intensity decreasing 18.2% and carbon intensity decreasing 20%. Given the decrease in carbon intensity of 20.2% in the Eleventh Five Year Plan and the further decrease of 20% in the Twelfth Five Year Plan, achieving a reduction in carbon intensity of 18% over the next five years means that China will very likely overachieve its 40-45% carbon intensity reduction target for 2020. Minister Xie Zhenhua recently stated that China will likely achieve a 50% carbon intensity reduction by 2020 and overachieve its non-fossil targets, given that "China's market for coal consumption has started to become saturated and should gradually decline."

China increased its non-fossil energy (renewables and nuclear) from 9.4% of primary energy consumption in 2010 to 12% in 2015, overachieving the Twelfth Five Year Plan target of 11.4% by 2015. It has set a target of increasing non-fossil energy to at least 15% by 2020, and at least 20% by 2030. Given that overall energy consumption is growing at a slower pace under the new economic normal (energy consumption grew only 0.9% in 2015), while wind, solar and nuclear are continuing to grow rapidly and to replace coal-fired power, it is quite likely China can significantly over-achieve its non-fossil targets, particularly as it works to improve integration of renewable energy with the grid, as my colleagues recently highlighted.

One of the biggest risks now is that China's power generators continue have plans to continue to build some 210 GW new coal-fired power plants when their utilization hours are already at less than 50% (averaging 4,329 hours in 2015, the lowest level since 1978) and overall thermal power generation fell 2.7% last year and is expected to continue to fall this year. National Energy Administration head Nur Bekri noted in an interview during the "two meetings" that the government is aware of this risk and taking steps to avoid overcapacity in coal power plants, stating that it will delay construction, cancel projects, and stop construction of coal power projects in order to avoid the risk of coal power overcapacity. Otherwise, he stated, if China continues to build coal power plants at the pace of the last few years, it will definitely have overcapacity in coal power plants within two to three years.

The 13th Five Year Plan also sets an overall energy target of 5.0 billion tons of standard coal equivalent (tsce) for 2020. While this is an increase over the 4.8 billion tsce target set as part of the 2014 Energy Development Strategy Action Plan, it is based on the revised and more accurate energy consumption figures released in 2015, in which total energy consumption for 2013, for example, was increased from 3.75 billion tsce to 4.17 billion tsce. Energy experts also believe that the 5.0 billion tsce target represents a ceiling and that China can keep its total energy consumption to 4.7 billion tons through energy efficiency and economic restructuring.

Much remains to be done for China to improve its integration of renewable energy and energy efficiency, but its 13th Five Year Plan targets make clear that it intends to deepen the transition to clean energy and low carbon development in the next five years, which will be a pivotal period for its efforts to green its energy and economy.

About the Authors

Alvin Lin

Climate and Energy Policy Director, China program

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