With its 12th Five-Year Plan, China hopes to reconcile growth and energy efficiency

As the second most powerful economy in the world since the second quarter of 2010, China has become aware, over the last few years, of the environmental impact of its development model. Since its 10th Five-Year Plan, China has been promoting renewable energy and energy efficiency, a move which has resulted in the rapid development of new energy industries such as wind, solar and nuclear power. The 12th Five-Year Plan aims to shift the focus from strong growth to more sustainable growth. What innovations does it contain?

China is both the world’s top carbon dioxide emitter and a major player in clean technologies

Over the last five years, China’s GDP has grown at an average annual rate of 11.2%. In its July 2010 report, the International Energy Agency stated that “China overtook the United States in 2009, to become the world’s largest energy user. Strikingly, Chinese energy consumption was only half that of the United States in 2000.” Today, China is the largest emitter of carbon dioxide in the world.

Even though it considers that as a recently industrialised country it is less responsible for global warming than Western countries, China has committed to a policy to reduce its energy intensity: between 2006 and 2010, China achieved a 19.1% decrease in energy consumption per unit of GDP, which was close to the official target of 20% set in the 11th Five-Year Plan, according to Wen Jiabao in March 2011.

With help from its state-owned banks, the Chinese government successfully subsidised its renewable energy industry. In 2011, seven of the fifteen leading manufacturers of solar panels are Chinese. Today, Suntech (world leader), Yingli and JA Solar supply more than half of the global demand. Furthermore, China installed 50% of the new global wind capacity in 2010, bringing its total installed capacity to 42.2 GW, placing it in the top spot ahead of the United States.

The 12th Five-Year Plan continues to develop clean energy

One of the main objectives of the 12th Plan is to slow down growth to 7% per year and put forward a more sustainable development model. China aims to reduce its energy consumption per unit of GDP by 16% over the next five years (2011-2015). A carbon intensity (greenhouse gas emissions per unit of GDP) reduction target appears for the first time. The goal is to achieve a 17% reduction by 2015, in order to achieve the long-term 2005-2020 reduction of 40 to 45 per cent, which China committed to at the Copenhagen conference.

The proportion of non-fossil fuels in primary energy use must reach 11.4% by 2015 from 8.3% in 2010 (the goal is to reach 15% by 2020). China wishes to add a total of 235 GW of renewable or low carbon energy generation capacity over the next five years. It plans to increase wind power capacity by 70 GW (from about 42 GW currently), solar power capacity by 5 GW (from about 625 MW currently), and hydropower by 120 GW (currently 210 GW). In spite of the Fukushima incident, China plans to increase its nuclear capacity by 40 GW and invest in fourth-generation reactors. 27 reactors should be built, in addition to the 13 already in service. This represents 40% of the total number of nuclear reactors being built around the world.

The 12th Plan is no longer limited only to power generation technologies, but also focuses on technologies that allow cleaner production processes or optimise the distribution (smart grids) and use (energy efficiency) of electricity

China’s 12th Five-Year Plan will continue to encourage energy production from biomass (installed capacity of 7.2 GW by 2015), unconventional natural gases such as shale gas, and the development of clean coal technologies such as carbon capture and storage in coal plants, and polygeneration.

It also includes further investment in “smart grids”, an undertaking begun in May 2009. China would like to develop ultra-high voltage power grids.

Lastly, in terms of energy efficiency, energy saving programmes will be launched within 10,000 companies. These are an extension of the previous programme, which focused on 1,000 companies and is considered a success. An environment tax or a carbon market could be implemented in certain pilot provinces. The natural resources tax will increase, as will the tax on high-energy-consuming products. Energy pricing (fuel, natural gas, electricity) should be reviewed to consider the different types of users and the way the electricity was produced (renewable energies in particular).

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