Clean Power

Published on March 6th, 2016 | by Joshua S Hill


China Renewable Energy Growth Soars & Coal Use Declines

March 6th, 2016 by  

China’s solar and wind energy capacity increased by 74% and 34%, respectively, in 2015, while coal consumption dropped by 3.7%.

Image of wind farm in China's Xinjiang provinceChina’s National Bureau of Statistics released figures for 2015 this week, and officials believe that the country’s current growth path will allow them to soon surpass their carbon emissions targets. Specifically, China broke two new records in 2015, installing a record 32.5 GW of wind in 2015, and a record 18.3 GW of solar in 2015 — both of which were higher than initial estimates.

“The latest figures confirm China’s record-breaking shift toward renewable power and away from coal,” said Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis (IEEFA). “Solar and wind continue to be the big winners, as illustrated by a 73.7% increase in grid-connected solar generation capacity. Declining consumption coupled with an over-abundance of domestic supply, meaning coal imports into China were particularly badly hit, dropping 30.4% yoy.”

Timothy Buckley also makes note of just how fast global electricity markets are transforming. Despite China’s confirmed figures being largely in line with initial estimates, they nevertheless highlight that global electricity markets “are transforming a great deal faster than anyone actually expected.”

The transformation is nothing without the corresponding decrease in fossil fuels, and China seems to be making strong headway towards its goals to decrease its coal usage and import. 2015 saw coal consumption decline 3.7%, year-over-year, and net coal imports dropped a much more significant 30.4% year-over-year, down to 198.7 million tonnes. This trend has already been seen to continue into 2016, with January’s net coal imports dropping by 11.6% year-over-year.

“IEEFA forecasts that China will install an additional 22 GW of wind, 16GW of new hydro, another 6GW of nuclear, and 18GW of solar (60% utility scale, 40% distributed rooftop solar) in 2016,” explained Buckley. “With electricity demand forecast to grow by 3.0-3.5% yoy in 2016, this 62GW of additional zero carbon electricity capacity will be more than sufficient to meet total electricity demand growth, such that coal consumption is forecast to fall again in 2016.”

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  • sault

    Yes, scaling back:

    “Following the Fukushima accident and consequent pause in approvals for new plants, the target adopted by the State Council in October 2012 became 60 GWe by 2020, with 30 GWe under construction. In 2015 the target for nuclear capacity on line in 2030 was 150 GWe, providing almost 10% of electricity, and 240 GWe in 2050 providing 15%. However the post-Fukushima slowdown may mean that the 2030 figure is only about 120 GWe.”

    “It has become apparent that there are some new “growing pains” in the Chinese nuclear programme. These are sufficient to cause one to reconsider some of the more expansive scenarios for China in the 2020s and beyond.

    The most obvious is that new reactor approvals have ground to a halt, with no new construction starts authorised during 2014. It now seems almost certain that the 58GWe target for 2020 cannot be reached.

    This is best explained by increased caution from the authorities. Two decisions are important: to authorise only reactors that are up to “Generation III safety standards”; and to delay approvals of inland projects.

    Another important factor is the delays that are being experienced with the foreign Generation III reactor projects being built in China, namely the Westinghouse AP1000 and the Areva EPR. Both are running over two years late due to delays with delivery of key components and issues project management.

    The delays on the AP1000 have important implications for the future Chinese programme as it had been expected that most future Chinese reactors would be of this design. Further AP1000 construction starts are unlikely until the initial unit (at Sanmen) is much closer to operating.”

    Your Forbes link is merely an opinion piece that does not address the post-Fukushima freeze in China’s reactor building and the difficulty they’ve had in hitting production targets. The author is not a nuclear scientist, economist or anything of the sort either.

    And your claim that it takes “60% of the time and 60% of the cost to build nuclear” compared to wind is demonstrably false:

    “The Institute for Energy Economics and Financial Analysis (IEEFA) forecasts that China will instal an additional 22 GWe of wind, 16 GWe of new hydro, another 6 GWe of nuclear and 18 GWe of solar (60% utility scale, 40% distributed rooftop solar) in 2016.”

    At a 3.5x build rate, wind power much faster to get on-line. Solar manages a 3x rate as well. So your 60% faster number is nonsense. A picture is worth a thousand words:

    And actually, most of the wind farms in China are in the eastern half of the country where most of the people live:

    The prices of nuclear power usually don’t incorporate decommissioning costs at the end of a plant’s life. Usually, these are dumped on local governments or tucked away off the balance sheet to make nuclear power’s costs look lower. In addition, the liability insurance covering meltdowns or other reactor incidents is usually covered by the government like here in the USA. Finally, R&D for nuclear power and nuclear weapons are intricately tied together. This is one reason why the USA went with the technically inferior light water reactor design so they could harvest plutonium and leverage research between the civilian power program and the nuclear weapons development program. Countries like India, Pakistan and potentially Iran have cloaked their secret nuclear weapons program under the guise of a civilian nuclear energy program.

    • Bob_Wallace

      James Conca who wrote the Forbes piece and writes most of Forbes stuff on nuclear energy is a bullshit artist. He posts pieces advocating for nuclear energy which are somewhere between badly informed and dishonest.

  • Bob_Wallace

    No, the EIA numbers are predictions about what electricity will cost five years from now. They are predicting price increases for wind and solar when it’s clear that prices will continue to fall. The 2015 report predicts 2020 prices.

    Here’s the most recent prices I have for solar PPAs.

    Solar = $0.05/kWh PPAs (subsidized) being signed in the US Southwest. Working backwards through a LCOE calculation extrapolates a cost of about $0.02 higher for the less sunny Northeast.

    Lawrence Berkeley National Laboratory entitled “Utility-Scale Solar 2013: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States”

    That data is two years old. In 2014 the cost of installed PV utility scale solar dropped by 18.6% and another 16.9% in 2015. That could mean that solar PPAs could soon drop under $0.04/kWh.

    Unsubsidized wind in the Midwest is now under 4c/kWh. Using the EIA forecast number for transmission that would go up to 7c/kWh if we moved that electricity from the Midwest to the East Coast. That’s probably in the range of the cost of East Coast onshore wind farms.

    What we don’t know at this time is now much the cost of East Coast wind might drop as we move to higher hub heights and the wind industry gets more efficient. Onshore wind is a minor industry along the East Coast so there are likely many savings that could be realized.

    West Coast wind is likely to drop in price. A very major wind resource is under development in Wyoming. It will take a relatively short transmission line to tie that power into the Intermountain and Pacific interties which would make the electricity available from Southern California to Oregon along existing transmission routes. (Much of this transmission was built for coal generated electricity and won’t be needed for that purpose going forward.)

  • Bob_Wallace

    Those EIA prices are from la-la land. Let’s look at real world prices.

    Power purchase agreements (PPA) for onshore wind in the US averaged $0.0235/kWh in 2014.

    DOE “2014 Wind Technologies Market Report”

    This is a ‘full cost’ price which includes subsidies and profits for the wind farm owners. Adding back in the subsidies takes the price to about $0.034/kWh. $34.4/MWh.

    For nuclear, if there are no further problems completing the Vogtle reactors on schedule the price of electricity produced will be about $0.13/kWh, $130/MWh.

    The price is that low because the project received extremely low financing rates. The least cost bid for new nuclear at North Anna was $0.19/kWh, $190/MWh. The contract price for new nuclear at the UK Hinkley Point project is $0.15/kWh, $150/MWh. Both of these projects would be heavily subsidized which means that the actual price would be higher.

    Combining wind, solar, nuclear gets you nothing. Nuclear is not rapidly dispatchable. It’s not the case that one could quickly turn on a reactor if clouds blocked the Sun. Wind and solar need efficient fill-in. Our present solutions are storage (pump-up hydro and batteries) and natural gas plants.

    Nuclear can be ramped up and down to some extent but because the cost of building reactors is so high and so little savings in fuel are realized when output is scaled back the price of electricity goes from very expensive to very much more expensive. If you start with 15 cent electricity and run the reactor at half output then the plant has to receive 30 cents for the electricity produced in order to stay in business.

    BTW, PPAs for solar are now falling below $0.05/kWh. Adding back in the subsidy makes that about $0.06/kWh which is less than half the price of new nuclear. And the price of wind and solar continues to fall.

    • Bob_Wallace

      It’s probably too early to determine China’s nuclear future. The cost of wind and solar has dropped very rapidly over the last few years and planners probably haven’t had time to adjust to those changes. China has a strong nuclear program and will likely continue starting new reactors for a few more years.

      Nuclear does cost less in China than in Europe and the US. They can likely build more nuclear without harming their economy than we can in the West. But those lower costs do not transfer to the West. China is involved in the Hinkley Point reactors (15 cents per kWh with large subsidies).

      That said, China has been ramping up wind and solar installations. China now produces more electricity with wind than with nuclear.

      • Radical Ignorant

        On the second point we fully agree.
        About translating China cheaper nuclear prices to so called developed world I don’t what, haven’t study what drives prices so much higher here. I remember some article from Guardian which said that Hinkley is about twice as expensive as wind. But I don’t remember was this per capacity or per energy produced.
        Anyway there is no disagreement about China going renowable between us. I still need to study this link you linked. It’s… complicated 🙂 From graph on one page it looks like average cost is $60/MWh then few lines below they written average price is $28, then earlier there is some $15 in incentives. Need something more than short look to understand it.
        Finally – very thank you for the link.

        • Bob_Wallace

          China is not transparent. It’s hard to figure out how they manage to build nuclear for such a lower price.

          Some of it is almost certainly labor costs. Nuclear builds involve a lot of labor. China wages are considerably lower than EU/US prices. A mechanical engineer earns an average of $23k per year, for example.

          Some of it may be due to government involvement in the construction process. If nuclear is a high priority for the government then supplies for nuclear construction are going to be prioritized. And this is a government that tends to shoot people who mess up.

          We don’t know how much assistance China’s nuclear builds get from the Chinese government. Are they receiving really low financing rates? Are there subsidies hidden in the process?

          It’s like France. As far as I know we’ve never known what it cost France to build their nuclear fleet. Only recently have we learned that the cost of operating France’s reactors is quite high.

          • Radical Ignorant

            All this is obscure, so I agree that we probably wont know. It’s speculative. Maybe scale of their build up has something to do? Pure guessing. But one question I do have.
            “Only recently we have learned that the cost of operating France’s reactors is quite high” – I don’t know what are you talking about. Haven’t heard anything. Can you point me to anything more specific?

          • Bob_Wallace

            I think scale has something to do with China’s lower building cost. Not long ago I read that the government was considering (planning?) to move construction crews from site to site in order to improve efficiency.

            “Production costs from the existing fleet are heading higher over the medium-term,” France’s Cour des Comptes said in a report to parliament published today.

            The report, which updates findings in a January 2012 report, said that in 2012 the Court calculated the cost of production of the current fleet for 2010, which amounted to EUR 49.5 per megawatt-hour.

            Using the same method for the year 2013 the cost was EUR 59.8/MWh, an increase of 20.6 percent over three years.


            EUR 59.8 = $81.37/MWh $0.082/kWh About $0.08/kWh

        • Bob_Wallace

          You’re looking at Figure 45. Levelized wind PPA prices by PPA execution date and region on page 56?

          There’s nothing close to $60/MWh unless you go back to 2012.

          $15 in incentives. Wind is eligible for a $0.023/kWh production tax credit (PTC) for the first ten years of operation. Since most PPAs are 20 years in length that means that the average subsidy would be half of 2.3 cents or $0.0115 cents per kWh over the life of the contract. That comes out to roughly $11.5/MWh.

          Wind farm owners also have the option of taking a 30% investment tax credit (ITC) rather than the PTC it may be that the ITC has a higher value. If the company has adequate taxes from other sources then the value might be $15. I’ve never seen anyone present those numbers.

          When comparing wind, solar, and nuclear don’t forget that nuclear is also subsidized. When/if the Vogtle and Sumpter plants come online they will also receive PTC subsidies. Additionally nuclear gets lower financing rates because taxpayers accept the risk of non completion during construction. And taxpayers are on the hook for the majority of the cost in the event of a nuclear disaster.

          There’s also the cost of long term used fuel storage.

          • Radical Ignorant

            No – I’m looking at figure 48 (page 59), where it’s split by region. And there is project with levelized PPA of $85/MWh.
            Searching where exactly I found this $15 number.

          • Bob_Wallace

            Generation-Weighted Average Levelized Wind PPA Price is under $30/MWh. Fig. 48, page 59.

          • Radical Ignorant

            Generation-Weighted. So most generation is in Interior, so it’s mostly about Interior wind prices. But California, North-East reality is very different. And there are lot of people there.

          • Bob_Wallace

            Sure. It doesn’t make sense to install lots of solar in Seattle where fog is often a problem rather than going a few miles inland where it isn’t. Nor does it make sense to build hydro plants where rivers don’t run throughout the year.

            The Northeast is rich in hydro. And offshore wind, while more expensive than onshore, will be a good source of daytime electricity. Build what works best in that place.

          • Radical Ignorant

            Offshore currently is often considered more expensive than nuclear which we are discussing. And just to get to the point of disagreement – are you against investing in offshore wind because it’s so expensive? Do you say: “Don’t build offshore, it’s wasting resources which can be spend on onshore wind”? Would you say “Don’t build residential solar, it’s more expensive than utility solar, don’t waste resources.”? Those are exactly the same arguments you rise against nuclear and are valid in exactly the same way.

            I’m all for offshore wind. More we invest more prices will go down. Just like with solar, land turbines, batteries, EVs… more money on the market, greater resources are spend for R&D. And offshore wind, especially on floating platforms, seems to be close to limitless source of energy available for very big part of humanity.

            To clarify my stance on nuclear:
            It maybe makes sense in some places to go nuclear. However with bureaucracy around it… And then removing bureaucracy increases the risks, so it never can be anything close to “let them build whatever they want however they want”. But can it be done smarter, cheaper, safer? Does it make sense at the moment? Those are open questions. However it’s cash heavy and very long time commitment. That’s the reason that even if it’s comparable in price to wind/solar you don’t have to worry about over investment in nuclear. At least on free market. China is little different beast. But you don’t need to bash it additionally. Research and limited scale investment are keeping one more way opened. Please remember that you can say “nuclear didn’t fall in prices for so long” is not fair as it was much more important to follow military and political goals for them than business. Just like ULA (most expensive in the world) and Space X (cheapest in the world). So let’s keep this possibility open in hope one day some Nuclear X will appear.
            P.S. Just watching documentaries in background about Chernobyl/3MI/Fukushima.

          • Bob_Wallace

            IIRC Germany expects to get offshore wind below 10 cents per kWh in the near future. Offshore may remain more expensive than onshore but because offshore tends to produce better during daylight (high demand) hours it is more valuable.

            Offshore is an emerging technology and we’re likely to see prices drop. We’ve been building nuclear for over a half century and the cost has risen, not fallen.

            Comparing utility and end-user solar costs don’t make sense. They don’t compete in the same market. End-user solar competes with the wholesale cost of electricity plus distribution costs plus utility profits.

            “It maybe makes sense in some places to go nuclear.”

            It may. But I can’t identify where those places might be. If you look at Jacobson’s Solutions project his group has identified renewable sources for most of the world’s countries.

            Might nuclear become affordable some day? Possible. But there’s no convincing route at this time. And remember that wind and solar are on route to less than 3 cents per kWh, unsubsidized. Currently nuclear in the West is at least 15 cents per kWh.

            To get in the game nuclear would have to drop not by half but by 75% or so. That is an immense challenge. To take a mature technology and wring out 75% of its cost.

          • Radical Ignorant

            Page 55:
            “Finally, because the PPA prices in the Berkeley Lab sample are reduced by the receipt of state and federal incentives (e.g., the levelized PPA prices reported here would be at least $15/MWh higher without the PTC, ITC, or Treasury Grant), and are also influenced by various local policies and market characteristics, they do not directly representwind energy generation costs.”

            At least $15.

          • Bob_Wallace

            I’d have to guess that the ITC is more valuable than the PTC and a lot of wind farms are opting for the ITC. I’m not aware of any state/local incentives for wind farms.

            That said, the 2014 PPA average of $23.5/MWh would rise to $38.5/MWh. Still under four cents per kWh.

            I’m looking forward to the 2015 numbers. From what I’ve been able to find the price of wind continues to drop. Larger turbines and increasing capacity factors are driving prices down.

          • Radical Ignorant

            Let’s abstract from the risk of nuclear disaster. That’s the thing which is worth to talk about and I’m not gonna argue with you there are none and it’s super save. Not current technology. I don’t know details, but there was something about China launching production in meltdown save test facility in 2017.

            Anyway I fully agree that this risk is a thing and need to be considered. Whole my point is: because you are afraid of the risk don’t lie about facts. Risk is powerful and reasonable argument against. Especially that so many times we were told that it’s perfectly save. So public would be stupid to trust an authority which lied to them before.

          • Bob_Wallace

            Several years back when I first learned about climate change and realized that we had to get off fossil fuels it seemed to me that we had to move to nuclear energy. Wind and solar were far too expensive at the time. We’d simply have to accept the danger of nuclear disasters and find some solution for nuclear waste.

            Now the price of wind and solar has fallen far below the price of nuclear. We don’t really need to concern ourselves with nuclear’s problems. We have much more affordable options which don’t bring us comparable dangers.

  • Ivor O’Connor

    “IEEFA forecasts that China will install an additional 22 GW of wind, 16GW of new hydro, another 6GW of nuclear, and 18GW of solar (60% utility scale, 40% distributed rooftop solar) in 2016,” explained Buckley. “With electricity demand forecast to grow by 3.0-3.5% yoy in 2016, this 62GW of additional zero carbon electricity capacity will be more than sufficient to meet total electricity demand growth, such that coal consumption is forecast to fall again in 2016.”

    Notice there is no mention of cutting down forests or wasting money on wave energy. We need China to invade and fix our country!

  • John

    Could the U.S. government finally do something about allowing the coal companies to mine federal lands with practically no financial compensation or can I go and start a christmas tree market with a visit to the federal forest?

  • Martams
    • nitpicker357

      I didn’t bother to follow your link. Your teaser, “And China continues to pollute the seas.”, is so uninspiring. Of course the world’s biggest industrial economy pollutes the seas! How much? Should I care?

      • It would be interesting to learn if the growing Chinese interest in clean air is spreading sideways into other forms of environmental stewardship. Certainly there’s a lag between “interest in clean air” and actual “clean air” but it’s gratifying to see the efforts they’re making; and if they end up with some equivalent to the US environmental protection agency, future cleanup efforts might proceed faster.

  • super390

    China is still mercantilist. The leadership still values cutting imports of vital materials that could be used against them by a naval blockade. Eliminating coal imports is logical. After that, it comes down to the amount of momentum, both price and political, that renewables have built up to crush Chinese coal for good.

    There will still be problems after that. Ordinary Chinese still burn coal in their rooms, a health catastrophe that should be finished off by cheap space heaters and better insulation. Hydro power is up against natural limits and the consequences of flooding valleys. Nuclear reactors using current technology are still an earthquake danger, so their much-rumored new designs better work.

    Mostly, the striking thing about China is the attitude that big engineering can still change the world. It’s not what you see in America anymore.

    • neroden

      There has been a concerted effort to eliminate domestic coal burning (for cooking and heating) in China. This has been ongoing for decades. It’s pretty effective.

      The nuclear construction numbers are notably low: 6 GW versus *16 GW* of solar. China is going to decide that nuclear is not worth the money pretty soon now.

      China is proof that mercantlism works. The US could use mercantalism too, but our corporate overlords convinced the government to do so-called “free trade” instead (it’s not really free if the workers aren’t free to move countries).

      • Magic omnibus7

        I even find that a poor excuse. It’s belief in large engineering projects and government-led investments in infrastructure, education and new technology.

        The USA, UK, Australia etc had both free trade and free markets during the creation of some of the most impressive engineering projects of the 18th, 19th and 20th centuries.

        Anglo-saxon govts have simply decided not to bother doing anything constructive for 30+ years and often move to actively inhibit the development of disruptive technologies.

        • Ronald Brakels

          Free trade for Australia is definitely a 21st century thing. Did not really exist before then. And it wasn’t big in the USA or the UK either, despite the UK’s famous repeal of their Corn Laws which still left a tariff of one shilling per 28 pounds of imported grain.

        • neroden

          The USA absolutely did NOT have free trade during the 19th century — we were famous for our mercantilist policies. Known as the “American System”, in fact.

          (The American System is a very *specific* branch of mercantalism; it has some other important features too such as the emphasis on infrastructure. Another component of it: disregard of foreign patents/trademarks/copyrights. China is currently employing the American System, pretty much precisely the way the US did in the 19th century.)

      • Shane 2

        ***but our corporate overlords convinced the government to do so-called “free trade” instead ***
        Your corporate overlords will wrap themselves in the Stars and Stripes whilst shipping manufacturing jobs and knowhow to China or anywhere that will assist them in getting lower taxes, lower wage labor, and lower pollution standards.

      • nakedChimp

        With monopoly money and monopoly knowledge, there is no free market.

      • JamesWimberley

        6 GW must be the new starts. Given the long construction times, the total being built is much higher. But I agree, there is no great ramp-up. The economics of nuclear don’t improve with time, and the lobby is slowly losing influence.

        • Radical Ignorant

          IIRC in China it’s almost twice as effective both in construction time and cost. And they have huge plans for nuclear. Apparently nuclear energy does not need to be enemy of renewables – for those they also have huge plans.

          • sault

            China has been scaling back their plans for new nuclear capacity a lot. In a world with only so much time and money do deal with climate change, any technology that takes longer and costs a lot more than other more effective technologies is an unwise use of resources.

          • Ivor O’Connor

            I suppose you don’t watch China’s 5 year plans and the radical changes they have been making. Or you would have realized they have cut back on nuclear because they are drastically increasing their wind and solar economy. Sometimes updating their 5 year plans multiple times within the 5 year period. Because they underestimated how quickly they could add solar and wind along with how much less expensive it is compared to the alternatives.

          • neroden

            If only I could read Chinese, I could follow the updates more often…

            …but anyway, the last analysis I read by someone who does read Chinese (over a year ago) said the following (paraphrasing).

            In the last 5-year plan they put in a moderate amount of money into solar power based on the representations of one guy in the Central Committee.

            Solar power has been such a *massive massive success* for them during those 5 years, so much more than they expected, that in the *current* 5-year plan they are throwing *all* their effort into becoming even more of a solar power powerhouse.

          • Radical Ignorant

            Provide link please. I’m following China quite regularly and it’s not true what you just said.

          • Ivor O’Connor

            Which part are you not up with?

  • Mike Dill

    Australia and other coal exporting countries are seeing the writing on the wall. Coal exports will continue to decline. Eventually all of the coal miners will be doing something else or filing for bankruptcy.

    • Bristolboy

      Exactly, in the UK there is now very little mining – and “UK Coal” is actually a landlord for wind and solar projects!

      • Shane 2

        Right-wing Prime Minister Margaret Thatcher took a hatchet to the coal industry while the left fought tooth and nail to defend it. The opposite appears to be happening in Murica today.

        • nakedChimp

          Well, think what the aim behind that was.. are there so strong and influential unions involved like they were in the UK?

    • nakedChimp

      The writing was on the wall for 2-3 years already – this is reality.

      The Assets are stranded.

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