Tracking SDG 7 in China

Energy is at the heart of almost everything we do today, and it connects economic, social and environmental realms. However, the world continues to remain off-track to achieve reliable and sustainable energy access. For example, around 759 million people remain without access to electricity, and about 3 billion people still lack access to clean fuels and technologies for cooking and heating – these numbers are expected to worsen because of the COVID-19 crisis. Despite the growth of renewable energy in the electricity sector, the use of renewables in heating and transport is still lagging. In addition, there is much room for improvement in energy efficiency as global progress still falls short of our targets.

To overcome these challenges, the Sustainable Development Goal 7 (SDG 7) calls for the international community to commit to a range of targets, which include universal access to energy, a substantial increase in the share of renewable energy in the global energy mix, and significant improvement in energy efficiency. Advancement in SDG 7 not only helps achieve a sustainable energy future, but also spurs progress across other SDG goals such as poverty alleviation (SDG 1), health and wellbeing (SDG 3), gender equality (SDG 5), sustainable cities and communities (SDG 11) and climate change mitigation (SDG 13). Hence, access to reliable and sustainable energy is a key driver that promotes progress across the development agenda in the face of economic, social and environmental challenges. 

Energy has played a critical role in the rapid economic growth of China, creating development opportunities and improving living standards. However, this fast expansion coupled with growing energy consumption presents China with unique energy challenges. Given that China is the world’s largest energy producer and consumer, fuel price fluctuations have consistently raised concerns over the country’s economic growth and energy security. The energy-intensive and high-pollution economic activities in its development path have also led to a series of environmental problems, such as air pollution and rising greenhouse gas emissions. In 2019, China’s annual emissions accounted for over 27 per cent of the world’s total, surpassing the combined emissions of developed countries. 

Given the heightened role of China in global energy security, efforts to realise SDG 7 targets would be central to the achievement of both the country’s and the world’s sustainable energy and climate-related goals. As the largest developing country in the world, China has been committed to its international responsibilities in global energy security by making notable progress on aspects of SDG 7. Over the past decade, China has basically eradicated power poverty, accelerated energy restructuring, improved clean energy technologies, and further enhanced international cooperation on energy. However, China still faces several challenges during its energy transition, such as renewable integration issues and economic uncertainty due to the COVID-19 crisis. Therefore, further efforts are required to advance progress towards SDG targets and climate goals.

Universal Access to Electricity

China has carried out power engineering projects in areas without electricity and has basically eliminated energy poverty in 2015. China has also upgraded rural power grids to enhance the capacity and reliability of power supply. The scale of grid interconnection in China has expanded significantly over the past decades, with the continuous growth in voltage levels.

Uptake of Renewable Energy

China has made tremendous efforts to promote the development and utilisation of renewables, such as wind, solar and hydropower, and its energy mix has been further improved. As of the end of 2018, renewable energy represented 38.3 per cent of China’s total installed power capacity and 26.7 per cent of total electricity output. There is a notable increase in the share of wind and solar power in total electricity generation, growing from 1 per cent in 2010 to over 7 per cent in 2018.

China also leads the world in renewable energy investment and deployment. In 2019, capacity investment in renewable energy amounted to USD 83 billion in China, accounting for almost 30 per cent of the global investment. China demonstrates global leadership in installed capacities of hydropower, wind and solar. In particular, global hydropower commissions were dominated by China, with a share of 65 per cent in global total capacity additions between 2019 and 2020.

The renewable electricity generation in China has increased substantially, contributing to 40 per cent of the global annual growth in 2018. In China, renewable electricity accounts for over 50 per cent of renewable energy use in transport, which has increased by 40 per cent between 2013 and 2018. This is largely because of renewable electricity expansion and development of electrified transportation technologies. The electric vehicle market in China is racing ahead – China contributed 45 per cent to the global light-duty electric vehicles in 2018.

While progress in the development and deployment of renewable energy in China has been rapid, the efficiency of the country’s overall energy system remains low. There is also a lack of integration or complementarity among multiple forms of functional systems, including electricity, heat and gas. In addition, a prominent mismatch in the allocation of energy resources across different regions and provinces remains a challenge. In China, there are limited long-distance and high-voltage power transmissions lines for wind and solar especially in remote regions, making it difficult to implement inter-provincial power exchanges. Hence, a shift in focus to renewable output rather than capacity additions, a key indicator of the transition to renewable energy, will help resolve the renewable integration issue.

Improvement in Energy Efficiency

China has strengthened its dual control over the total volume and intensity of energy consumption and energy efficiency has improved steadily. With the implementation of a series of energy efficiency policies, the rate of improvement for primary energy intensity has been improved at an annual average of 4.3 per cent over the period 2010 to 2018, beyond the level required by SDG 7 targets.

In addition, China regularly sets and updates energy efficiency targets in its five-year plans for different sectors and technologies. The industrial sector saw the most significant improvement in terms of energy savings, which is largely driven by the establishment of mandatory initiatives and aggressive measures. China also strongly promotes green buildings to strengthen the energy efficiency performance of buildings.

International Energy Cooperation

China has strengthened dialogue and deepened international cooperation on energy to advance SDG 7 and has actively provided support for other developing countries. For example, China has committed to a multi-country infrastructure and development project, the Belt and Road Initiative, that aims to help partner countries (most of which have emerging and developing economies) to achieve sustainable development. Key cooperation areas include energy investment, energy production, as well as energy infrastructure construction and interconnection.

Impacts of COVID-19

The COVID-19 pandemic reminds us that a reliable and uninterrupted supply of energy is critical to addressing this crisis. Energy not only ensures the continued operation of hospitals and health facilities, but also supports the delivery of teleworking and online education while maintaining social distancing. Hence, lack of access to affordable and reliable energy may hamper efforts to contain COVID-19 across the world, and clean energy transitions will be central to the post-COVID recovery.

China was the first nation in the world to be hit by the COVID-19 outbreak, which has profound impacts on economic growth, energy demand and energy policy orientation in China. Given the lockdown measures to contain COVID-19, China’s economy contracted for the first time in decades before recovering. As a result, the demand for energy dropped dramatically, especially during the peak of confinement measures on mobility, contributing to a decrease in emissions and a fall in fuel prices.

To boost local economies and facilitate job creation, authorities have accelerated coal-fired power plant permitting and proposals, which seems to be inconsistent with China’s climate target to reach peak emissions by 2030. Hence, diminishing the role of coal in China’s energy mix seems to be more difficult. Due to economic uncertainty, China also declined to set a target of energy intensity for the first time in several years.

Meanwhile, China has increased its solar and wind energy targets and pledged to achieve carbon neutrality by 2060, with an emphasis on new renewable energy and energy efficiency measures. Moreover, social-distancing measures have a far lesser impact on renewable energy projects in China because a significant proportion of these large-scale projects are deployed in remote areas.

Therefore, the outlook for the progress of SDG 7 remains uncertain in the post-COVID recovery.  It is politically challenging to enhance China’s sustainability strategies against the backdrop of growing concerns over economic growth and energy security. Future developments will depend on the length, depth and effect of this health crisis and on the effectiveness of policies and instruments to mitigate economic impacts and promote SDG investment. With the current pace, it remains a question whether China will be on track to meet SDG goals. ▲

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