China’s Investments in Power Sector Could Exceed $13.7 Trillion to Achieve Net-Zero Emissions by 2060
China’s commitment to achieving net-zero emissions of greenhouse gases by 2060 has sparked global interest, with the country’s investments in its power sector expected to exceed 100 trillion yuan ($13.7 trillion) between 2020 and 2060. The official Xinhua news agency reported this figure, citing State Grid Corp., China’s utility behemoth.
In 2020, President Xi Jinping pledged to bring China’s carbon emissions to a peak by 2030, and achieving net-zero emissions by 2060 aligns with this goal. This ambitious undertaking could potentially curb global warming by 0.2-0.3 degrees Celsius within this century, according to researchers.
China currently accounts for approximately 30% of the world’s CO2 emissions, making it crucial for the country to address its energy activities, which are the primary source of carbon dioxide emissions. Recognizing this, State Grid emphasized in a recently published book that the transformation of China’s power generation mix needs to accelerate towards cleaner and low-carbon sources.
In 2022 alone, major power firms in China invested a total of 1.25 trillion yuan, with solar power generation investments surging by 232.7% to 286.6 billion yuan. China aims to source around 33% of its power from renewable sources by 2025, an increase from 28.8% in 2020, as stated by its state planning agency last year.
Consultancy firm EY ranked China as the third most attractive renewable energy market worldwide in its annual ranking of the top 40 economies. The rankings were based on the investment and deployment opportunities in renewable energy.
While China has set ambitious goals and made significant progress in renewable energy, several obstacles remain. These include provincial government protectionism and a lack of inter-provincial coordination, which hinder efforts in the power sector reforms. Fixed, long-term power trading agreements further limit flexibility in the system.
China’s commitment to achieving net-zero emissions and its substantial investments in the power sector have captured global attention. As the world’s second-largest economy, China’s efforts in transitioning to clean and low-carbon sources of power will play a crucial role in combating climate change. However, overcoming existing challenges and ensuring effective coordination within the country will be essential for attaining these goals.
China’s pursuit of a greener future not only aligns with global efforts to reduce carbon emissions but also presents opportunities for investment and further technological advancements in the renewable energy sector. As China progresses towards its net-zero emissions target, it is expected to continue leading the way in renewable energy deployment and garnering international interest.
