China pushes green energy to ensure coal supply at reasonable prices

After facing difficulty in energy production last year, China is pushing green energy to decrease the demand for coal, and thereby ensure sufficient availability of coal at reasonable prices this year. The country has prioritised energy sufficiency, is stressing on improving mining technology, and improved pricing mechanism for coal-fired power stations.

One example of intelligent technology for coal mining is at Shaanxi Coal Caojiatan Mining Co Ltd, where real-time operation and equipment of production process can be monitored through phone applications. This has reduced the actual number of workers in a mining team by nearly half.

In terms of green energy, for example, the China Petroleum and Chemical Corp, or Sinopec, has started work on the world’s largest green hydrogen plant. The project, being set up in Kuqa, Xinjiang Uygur Autonomous Region, will be powered entirely by solar energy. Once it becomes operational next year, it is estimated to reduce carbon dioxide emissions by 485,000 tons annually.

In October last year, the Communist Party of China Central Committee and the State Council released a master guideline for the work needed to achieve the country’s ambitious target to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.

As per the guidelines, China aims to increase its share of non-fossil energy consumption to around 20 per cent by 2025, 25 per cent by 2030, and over 80 per cent by 2060.

In accordance with the guidelines and emissions reduction target, several companies that are normally dependent on fossil fuels have taken many important climate mitigation measures. Sinopec, the world’s largest refiner by volume, is planning to invest 30 billion yuan in increasing its hydrogen production capacity, including refueling stations and storage facilities, over the next few years, according to the Chinese media reports.

China National Petroleum Corp, the largest oil and gas company in China, is developing its solar wind and hydrogen business. Likewise, China National Offshore Oil Corp, or CNOOC, a major oil and gas driller, is planning to invest a certain per cent of its revenue in solar and wind energy each year.

Thus, while steps are being taken to increase coal production capacity on the one hand in China, there is also a push for increasing green energy. In addition, to bring stability to prices and to ensure stable energy supply, the government is working on further improving the medium- and long-term coal contract system this year.

Large-scale firms, especially the state-owned enterprises are also working on increasing the absorbing capacity of green energy, which in turn will go a long way in easing demand for coal-generated electricity.