The cost of a zero-carbon power generation system in 2035 is much lower than that of coal power

The proposal of the carbon neutral target also means the determination of China's national low-carbon development strategy.

With these questions in mind, "Energy" magazine interviewed Chen Ji, director of the Rocky Mountain Institute, to interpret China's commitment to carbon neutrality and suggestions.

"Energy": How do you evaluate China's latest national emission reduction strategy?

Chen Ji: The peak in 2030 and the proposal of carbon neutrality by 2060 have put forward clearer requirements for China to respond to climate change, implement the energy revolution, and promote sustainable and high-quality development.

Looking back on China’s actions to address climate change, tremendous changes have taken place over the past 20 years.

From an investment perspective, the goal of carbon neutrality promotes "zero carbon" as a new trend for long-term value investment in China.

"Energy": What do you think is China's biggest reliance on setting the 2060 carbon neutral goal?

Chen Ji: China is confident that the goal of carbon neutrality by 2060 is based on basic research and judgment on economic and social development trends and its position in the global value chain.

On the one hand, China is already in the final stage of completing industrialization and urbanization.

　　On the other hand, China is a major manufacturing country with the most complete industrial categories in the world, and it is also moving towards a manufacturing powerhouse with technological innovation as its core.
The transformation of the global economy to carbon neutral or zero carbon will give rise to many emerging industries.
China's advantages in R&D and equipment manufacturing will help seize the commanding heights of the market and promote the rapid industrialization and marketization of emerging technologies.
In fact, China's advantages have been seen in more mature green and low-carbon industries such as wind power, photovoltaics, electric vehicles, power batteries, and LED lights.
In some industries that are in the early stages of industrial development, we have also seen similar scenarios taking shape.
For example, the cost of the world's lowest-cost electrolyzed water hydrogen production equipment has reached 200 US dollars/kw, which is what Chinese companies have done.

　　"Energy": China is formulating the "14th Five-Year Plan".
In order to achieve the carbon neutrality goals in 2030 and 2060, what policy trends should China's "14th Five-Year Plan" show?

　　Chen Ji: Achieving or even exceeding the 2030 target (achieving the peak earlier) will lay a solid foundation for achieving the 2060 carbon neutral target, and the "14th Five-Year Plan" target will be the basis for two long-term goals.
So it’s crucial.

　　Under the goal of carbon neutrality, the "14th Five-Year Plan" should be guided by carbon emission reduction, formulate phased quantitative targets, and strengthen the overall coordination and connection between the targets—reverse from the carbon neutrality in 2060, carry out Research on the implementation path of the systematic carbon neutrality target, put forward a phased carbon emission reduction quantitative target, and compare it with the existing carbon intensity target, energy intensity target, non-fossil energy share target, renewable energy development target, and total energy consumption Control targets, coal consumption targets, and other climate, energy, and environmental targets.
Carbon emissions can be used as an indicator to strengthen coordination and convergence between targets.

　　"Energy": In the current energy structure of China, coal still occupies a major part.
What does the 2060 goal of carbon neutrality mean for China's huge coal industry?

　　Chen Ji: Market investment will accelerate the withdrawal from the coal sector.
As early as 2014, China's coal industry began to experience a trend of substantial decline in investment.
In recent years, the Chinese government has promoted the gradual divestment of coal assets of non-coal companies through mergers and reorganizations.
The National Development and Investment Group announced in 2019 that it has completely withdrawn from the coal business and will invest in new energy in the future.

　　It is recommended that relevant local governments increase their efforts and take the initiative to actively respond to problems and risks such as the decline of pillar industries and the increase in unemployment, and accelerate the promotion of regional economic transformation.
Although China's coal industry carries a large number of jobs (for example, by the end of 2018, this number was 3.
3 million), these jobs are mainly concentrated in provinces such as Shanxi and Shaanxi.
Moreover, our research predicts that in the future, China’s employment population will drop significantly, from the current 926 million to 750 million in 2050.
The drastic reduction in employment in the coal mining industry is manageable for the thirty-year time scale and the relatively small area of ​​a few cities.
In the past six years, the Chinese government has carried out vigorous coal production capacity reduction work, which has resolved the occupational diversion of approximately 2 million mining workers.
In addition, the application of carbon capture and storage technology in the industrial and power sectors can delay the withdrawal of coal assets and buy time for the coal industry to solve social problems such as unemployment.

　　"Energy": At present, the intervention of wind and solar will cause an increase in the cost of the power system.
Does this mean that there will be a certain upper limit for the development of renewable energy such as wind power and photovoltaics? Under such an upper limit, is there a certain amount of pressure to achieve the goal of carbon neutrality?

　　Chen Ji: The so-called system cost will not cause the problem of an upper limit in the development of renewable energy.

　　The complete decarbonization of the power system is the core of China’s goal of achieving carbon neutrality.
Our Rocky Mountain Institute and the Energy Transition Commission’s zero-carbon scenario show that by 2050, more than 60% of China’s electricity will be provided by wind power and photovoltaics, and system flexibility is mainly Pumped water storage, battery storage, hydrogen storage, and a small number of gas-fired peak shaving units and biomass generators equipped with CCS, as well as demand-side management to help the power load to cut peaks and fill valleys.

　　Considering that the cost of the above-mentioned means of providing system flexibility in 2050 will be greatly reduced compared with the present, and the operating cost of wind and solar power generation is lower, the system cost will not increase.
The pressure of system cost growth will mainly appear in the next decade before 2030.
This is mainly because the cost of battery energy storage cannot quickly drop to the required level.
In our scenario, by 2030, the proportion of wind and solar power generation will reach nearly 30%.
At this time, China’s power system has relatively low cost and flexible means, which mainly include expanding the scope of regional dispatch, optimizing power transmission load across provinces, further improving the flexible dispatch capacity of storage capacity hydropower, expanding demand-side management demonstration, and thermal power flexibility Transformation and so on.
The Energy Transition Commission’s research on the global power system also shows that by 2035, the minimum system cost of zero-carbon power generation will be only US$31/MWh, which will be much lower than the cost of thermal power-based systems.

　　"Energy": Based on China's resource endowment and energy consumption, what difficulties might it encounter in the process of achieving the carbon neutrality target by 2060?

　　Chen Ji: From a field perspective, heavy industry and heavy transportation are sectors that we usually think of as "difficult to decarbonize".
The demand for high-quality heat in the industrial process of heavy industries such as steel, chemical, cement, and the carbon emissions caused by chemical reactions in the process, as well as the dominance of fossil fuels in heavy transportation such as aviation and shipping, require a radical change in the industrial sector to achieve zero carbon.
Process flow and main equipment and facilities.

　　For example, the steelmaking process of hydrogen-based direct reduced iron will need to start a new stove and rebuild a special production process compared to the current coke blast furnace steelmaking process.
This disruptive impact will increase the uncertainty and risk of complete decarbonization in these areas.
However, this disruptive transformation may also bring about the reorganization of traditional industries, the formation of industries that are rich in new energy (mostly in the west), and promote a more balanced development of the Chinese economy.

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