China’s 12th Five Year Plan,
Energy Security and Domestic
Stability
Christopher M. Dent
University of Leeds
China’s 12th Five Year Plan
Context
• China’s FYPs date back to the early 1950s
• Maps out strategies and goals for economic
development, specific projects and reforms
• Less dirigste than before, now officially called
‘guidelines’ rather than ‘plans’
12th FYP (2011-2015)
• Continuity of objectives from previous FYPs:
greening of economic growth
growth with greater social equity
promoting domestic consumption
improve social infrastructures and safety nets
foster emerging high-tech sectors, e.g. solar
• … more emphasis on sustainable development
China’s 12th Five Year Plan:
Key Issues for Energy and Climate Change
CC Related Targets and Policies
• Context: CO2 emissions, tons per capita:
•
•
China 4.9, EU 9.1, US 18.9
Policies: Improve energy efficiency laws +
standards, energy-saving market mechanisms (inc. new taxes), establish carbon
markets, improve emission monitoring
systems, new energy-efficient transport,
limit growth of energy-intensive sectors
Targets:
 By 2015: coal’s share - 70% to 62%,
17.3% reduction in energy-intensity
(20% target met in last plan)
 By 2020: wind/solar/biomass: 200GW,
nuclear 80GW, hydro 380GW (20% of
total energy demand); 40-45% reduction
in energy-intensity (CO2 per GDP unit)
China’s 12th Five Year Plan:
Key Issues for Energy and Climate Change
Green Energy Sector Development
• Part of a broader programme of high-tech
•
industrial policy
7 strategic industries for ‘clean’
development: new gen IT, energy-saving
and environment protection, renewables,
biotech, high-end equipment, new
materials and new-energy cars
China’s Provinces
• ‘Rural modernisation’ and developing new
•
energy infrastructure and production in
China’s poorer provinces
New engines of growth for the Chinese
economy?
China’s
Provinces
… some much richer
than others…
Over US$10,000
US$5,000 – US$10,000
US$3,000 – US$5,000
US$2,000 – US$3,000
Under US$2,000
Populations in millions
GDP nominal p/capita, US$ 2009
• Richest – Shanghai Municipality (11,361), Beijing
•
Municipality (10,070), Tianjin Municipality (9,136), Zhejiang
(6,490), Jiangsu (6,475), Guangdong (5,965)
Poorest – Guizhou (1,502), Gansu (1,879), Yunnan (1,975),
Tibet (2,216), Guanxi (2,316)
Key Drivers in China’s Energy Security
Maintaining Dynamic Momentum
• High level energy inputs required to keep
high economic growth rates, albeit more
socially equitable and e-sustainable
• Economic development as both a
mechanism for further reducing poverty
in China and source of geopolitical power
Reducing Supply Risk
• China’s increasing dependency on
•
imported energy:
 diversification of energy partners
 domestic coal still viewed as more
supply risk averse
Renewables, nuclear and strategic oil
reserve development also to help
mitigate this risk
Key Drivers in China’s Energy Security
Upgrading Old Energy
Infrastructure
• Around half of Chinese industry is still
state-owned, energy inefficient and in
need of investment
• Upgrading with clean efficient energy
technologies – a huge structural challenge
Reducing Environmental Risk
• Growing acknowledgement that energy
•
production and consumption are the
prime causes of increasingly acute
environmental problems in China
Health costs, urban degradation, growing
civil unrest, resource depletion and other
pressures on the govt to find low carbon
solutions
China’s Fast Emerging Renewable Energy
Sectors
Wind Energy
• China’s wind energy
•
•
•
•
•
World Top 10 Wind Turbine Producers
capacity doubles annually
over 2005-2009
2005: 1.2GW capacity
2010: 41.8GW (now the
world’s largest, overtaking
the US last year)
Over 50 Chinese wind
turbine producer firms,
three in the world top 10
Rate of sector expansion
has far exceeded the
Chinese govt’s expectations
Still huge potential for
further sector expansion
Company
Country
Production
(GW)
1. Vestas
Denmark
6.3
2. GE Wind
USA
5.8
3. Sinovel
China
5.8
4. Gamesa
Spain
4.4
5. Suzlon
India
3.5
6. Goldwind
China
3.4
7. Enercon
Germany
3.3
8. Dongfang
China
3.3
9. Repower
Germany
2.9
10. Nordex
Germany
2.5
China’s Fast Emerging Renewable Energy
Sectors
World Top 10 Solar Photovoltaic Cell Producers
Solar Energy
Country
Production
• This sector is also growing Company
(MW)
•
•
•
•
rapidly in China…
Now around 500 firms
producing PV cells, China
has four of the world top
10 producers
Past emphasis on export,
now on increasing
domestic SP capacity
However, domestic SP
capacity is still very small
(0.2GW in 2009)
Plans to hit 2.0GW by end
of this year
1. First Solar
US
1,322
2. Suntech
China
1,090
3. Q-Cells
Germany
1,000
4. JA Solar
China
800
5. Solar World
Germany
710
6. Sharp
Japan
695
7. Trina Solar
China
600
8. Yingli
China
600
9. Gintech Energy
Taiwan
600
10. Kyocera
Japan
440
China’s Investment in Green Energy
12.9
Green Energy Investment in China
and Europe (US$ bn)
12.4
10.7
9.9
7.2
6.2
6.7
6.6
5.5
China
0.2
Q1
04
4.2
3.4
3.2
2.5
0.3
0.5
0.6
0.1
0.3
0.4
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
1.4
1.2
1.3
Q4
05
Q1
06
Q2
06
Q3
06
2.3
2.5
Q4
06
Q1
07
2.8
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
8.0
7.6
Q2
10
22.9
16.5
15.6
13.2
12.5
11.3
10.4
Europe
10
Q1
04
1.8
Q2
04
Q3
04
7.9
7.7
4.7
5.3
5.6
4.7
4.3
3.6
2.0
9.4
9.2
8.9
5.4
2.9
10.9
2.5
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Source: Bloomberg New Energy Finance
Concluding Points
• Under the 12th Five Year Plan (2011-
2015), China will continue to raise its
investment across a number of green
energy sectors
• At the same time, China will maintain
its burgeoning demand for oil, coal
and gas, and faces a number of
structural challenges in improving its
energy efficiency levels
• China’s ‘common but differentiated
responsibilities’ view on climate
change
• Positive signs ahead…
recent developments in US-China
clean energy diplomacy
expect future enhancement of EUChina dialogue on climate change?