China ¦ Clean Power and Electrification ¦ World Economic Forum

China accounts for around 40% of global energy emissions across industry.

China’s industrial sector accounts or more than half of global production of many key bulk materials such as steel, aluminum, and cement, and nearly half of chemicals and paper. To reduce energy emissions in industry two key actions are required at scale. First, a massive increase to clean power is required, 83% of China’s generation capacity will need to be from non-fossil sources by 2060. Second, electricity needs to rise from 25% to 56% of final energy consumption through the electrification of industry’s transport, equipment & processes.

Onsite Self Generation & Onsite Power Purchase Agreements (PPAs)

Chinse industries are actively investing in onsite renewable energy generation and engaging in onsite PPAs to secure renewable energy directly from these facilities.

Offsite PPAs & Green Power Trading

Chinese industries are increasingly entering into offsite PPAs and participating in green power trading platforms to access renewable energy without the need for onsite infrastructure, supporting the growth of renewable markets.

Energy Attribute Certificates (EACs)

Chinese industries are utilizing Energy Attribute Certificates (EACs) to certify their renewable energy usage, supporting renewable energy development in China.

Transitioning to Clean Power Generation

Economic Factors

Cost of Storage: Deploying shared energy storage models could potentially slash costs by up to 20% rendering investments in storage economically competitive compared to grid electricity.

Capital Cost: While the initial capital outlay for clean power generation assets remains high, projections indicate that the lifetime costs of clean power sources will soon surpass those of coal in China, expected to occur from 2025 onwards.

Business Models: Industrial players often face the dilemma of either financing clean power assets independently or relinquishing some control over asset governance and returns. Innovations in business models are crucial to address these concerns.

Resource Considerations

Hydropower: Overuse of hydropower resources in southwest provinces due to high aluminum production.

Space Availability: Limited available space and complex property rights regulations pose bottlenecks in the installation of clean power infrastructure.

Curtailment: Over generation without the required storage has led to high curtailment rates.

Scaling Green Power Procurement

Competitive Advantages of Innovation: While clean power tariffs may initially pose cost challenges, the nation's strategic investments in research and development foster technological breakthroughs that drive down costs, enhancing the attractiveness of green power procurement.

Integrated Market Dynamics: Despite initial disconnects between green power trading and carbon markets, efforts to streamline administrative processes and eliminate redundancies showcase China's determination to optimize market structures, minimizing costs and maximizing efficiency.

Clean Power for Industry: China

China accounts for around 40% of global energy emissions across industry.

White Paper: Clean Power for Industry in China: Policy Enablers for the Industrial Sector

Mainstream Measures in Chinese Industries

Onsite Self Generation & Onsite Power Purchase Agreements (PPAs)

Offsite PPAs & Green Power Trading

Energy Attribute Certificates (EACs)

Transitioning to Clean Power Generation

Scaling Green Power Procurement

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