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Feature: IEA's net-zero roadmap is unrealistic, lacks localized approach - Chinese experts


IEA report lacks differentiated approach between developed and developing countries

Rapid phasing out of fossil fuels could destabilize energy supply, power grids

Changing consumer habits, market mechanisms key to zero carbon

  • Author
  • Analyst Ivy Yin and Eric Yep
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  • Norazlina Jumaat
  • Commodity
  • Coal Electric Power Natural Gas
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  • Energy Transition

China's energy experts expressed concerns over the International Energy Agency's net-zero emissions pathway citing the lack of a differentiated approach between developed and developing countries as well as unrealistic milestones to phase out fossil fuels.

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They said the IEA's ambitious milestones were arduous given China's continued energy demand growth, coal-dominant electricity system, and yet-to-be-reinforced market mechanisms for electricity and carbon pricing, and suggested a localized approach.

"Countries are at different stages of development; they have different energy resources and different population sizes. China is the largest energy producer and energy consumer, but its per capita energy consumption is still small," Xie Qiuye, Dean of China Electric Power Planning and Engineering Institute, said at the launch of IEA's Net Zero by 2050 report in Beijing on June 8.

Li Zheng, Executive Vice President at the Center for Energy and Climate, Tsinghua University, said the IEA expects all countries to meet at the same destination, but some developed countries might achieve the target earlier.

Hence, using the same yardstick for all countries may be hard to accept, Li said.

"Common, but differentiated responsibilities" between developed and developing countries has been one of the principles guiding the United Nations Framework Convention on Climate Change, or UNFCCC, and was repeated throughout the discussions.

Stable energy transition

The experts agreed on IEA's suggestions to accelerate technological innovation and renewable capacity expansions, especially in China's coal-dominant power sector. However, they believed rapidly phasing out fossil fuels could destabilize energy supply.

Xie said one of the biggest challenges will be for China to establish "a new system of electricity with renewable energies at its core" while addressing energy security, safety and stability.

The decarbonization of power in several countries has been poorly managed, often eliminating baseload supply without sufficient backup to meet demand volatility, leaving the grid exposed to blackouts.

"Net zero electricity is also very challenging by 2035. We need to phase out fossil fuels very fast," Li said, adding that fossil and non-fossil energy sources were not rivals, and wind and solar power need to be supported by fossil fuels.

He said the challenge for China would be to match energy demand growth with the development of non-fossil fuels, and fossil fuels may still be needed to fill the supply gap. "If (energy) demand increases too fast, in the short term, how can we deal with this problem and leave room for carbon neutrality?" Li said.

"As people pursue higher standards of living, there will be further increases in per capita energy consumption. This will bring about pressure on going carbon neutral," Cao Yang, China President of Baker Hughes, an oil and gas services company, said.

Unfriendly for fossil fuels

The most controversial part of IEA's roadmap has been the call for an immediate end to investments in new coal mines, unabated coal plants, oil and gas fields.

Cao said the IEA's report was "highly disputable", "unfriendly for fossil fuels", and the roadmap "very narrow and challenging."

While Europe has several decades to go from carbon peak to carbon neutrality, China only has 30 years, he said, adding that China has a unique geographical situation, lacking oil and gas, and with coal accounting for 71% of electricity generation.

"Our opinion is that coal and oil shall be phased out gradually, while natural gas, as the cleanest fossil fuel, will need to play a very important role until we reach net zero," Cao said.

Consumer habits and market mechanisms

"One good thing from the IEA report is that it says energy transformation must be at the individual level," Zhang Lei, founder of green technology company Envision Group, said. "How do we cultivate consumers' attitudes towards the use of energy saving technologies, and enable consumers to emerge as a strong group not as a vulnerable group in this transformation."

He said conversations about carbon neutrality usually take the form of initiatives by governments and international organizations, followed by businesses, "but until today, we have still not seen consumers begin to take an interest" and "the role of consumers should not be underestimated."

He said there was a need to motivate and incentivize consumers to make them an important force; for example if they embraced zero-carbon clothing and food, then manufacturers will come under pressure to adopt zero carbon materials and transformation models.

"A very important challenge is the market mechanism," Zhang said, for both carbon pricing and electricity trading at times of volatility.

"If we can set up clear pricing, we can convey clear signals to the market. If the market mechanism is in place, maybe one to two months earlier, people will be able to foresee a power shortage. A mid to long-term pricing mechanism in the market will be key to addressing challenges in terms of seasonal fluctuations," he added.