Guangdong’s stalled energy transition reflects Beijing’s mixed messages - South China Morning Post

Opinion | Guangdong’s stalled energy transition reflects Beijing’s mixed climate messages | South China Morning Post

Guangdong’s stalled energy transition reflects Beijing’s mixed climate messages

- Guangdong’s renewed investment in fossil fuels shows provincial decision-making is at a crossroads, as Beijing balances energy security against climate goals
- This loss aversion attitude is a frequent source of inertia in China’s energy transition – without new signals from the top, provinces’ climate ambitions won’t grow

climate disasters. In the past year alone, extreme flooding has caused an estimated

7.5 billion yuan(US$1.1 billion) in direct economic losses.

Guangdong is also China’s largest regional economy, and has been for the past 34 years. Foreign trade, investment and consumption lifted the province and buoyed China’s economy, but they have all hit a bump recently.

lower than the national average of 5.5 per cent. Guangdong’s fourth largest city, Dongguan – known as “the world’s factory” – only saw 1.5 per cent growth.

China’s push and pull between climate disaster and climate action.

By 2020, its share of non-fossil fuels in primary energy consumption had fallen to 30 per cent. But it has since hedged its bets, developing fossil fuel at rates faster than other leading regional economies such as Shanghai, Jiangsu and Zhejiang, according to research from Greenpeace East Asia’s Beijing office.

Compared to them, Guangdong is much further along in its energy transition. It has exceeded the renewable energy goals outlined for it in the 14th five-year plan for 2021-2025, with solar power capacity additions putting it comfortably above target and wind energy capacity additions that are triple the goal. Energy storage projects also grew at a compound annual rate of 106 per cent from 2021-2023.

With Guangdong, the question is not whether it can meet renewable energy targets but whether those targets are pushing it at the pace necessary to respond to climate change.

troubleshooting grid management systems, region-to-region energy transfer, the application of climate solutions like energy storage, and demand-side solutions that ease pressure on the grid will all be top priorities.

Continued reliance on fossil fuels sidesteps these critical challenges and kicks them down the road. This is risky, not least because of possible curtailment issues for renewable energy in the future if the grid cannot consistently rely on renewable sources.

In explaining Guangdong’s recent economic performance, Wang Jun, a key counsellor with the Guangdong provincial government, told China Daily: “Without investment input, there is no output.”

foreign investment,

foreign trade and

consumption all dipping, public investment is as important as ever.

lack of big stimulus from the central government, how Guangdong prioritises public spending is a window into how a key province marks its path forward when pressure to prioritise growth is high.

energy security, for example, is a key parameter for energy projects.

China’s coal surge flies in the face of its climate commitments

Since 2021, the number of green and low-carbon projects in Guangdong has remained relatively flat, similar to in Shanghai, Jiangsu and Zhejiang. In Guangdong, the percentage of key projects that were green and low-carbon has decreased from 2021, even as the number and percentage of fossil fuel projects increased dramatically.

Guangdong is the major regional economy, and other provinces look to its economic planning. This is a province that had successfully negotiated its early energy transition only to now stall.

mixed signals on its energy transition.

net-zero commitments, or avoid scandals like electricity

blackouts, are also important factors.

Guangdong’s strategic investments reflect decision-making at a crossroads – for provincial governments, this is one of loss aversion, where excelling is not quite as important as just ensuring they do not mess up.

To end power crunches, China must rebuild its grid around clean energy

demand-side solutions to meet electricity needs are often eschewed due to this political trend.

For example, provinces with high electricity demand often suffer blackouts despite having their grids physically linked to those of neighbours with surplus energy. The infrastructure to transfer electricity is there but the lack of specific guidance on energy transfers makes this solution impractical, even potentially risky. If electricity is transferred, any potential complications that arise could fall on the friendly neighbour’s head.

For investment at the local level, the loss aversion attitude is similar – at least until there is a clear signal again from the top that provinces need to excel on net zero. As Guangdong’s recent strategic investments show, without new signals from Beijing, provinces’ climate ambitions won’t grow.

Lu Chen is a Beijing-based reporter who focuses on climate change and organic farming

August Rick works for Greenpeace East Asia in Beijing, where he covers topics related to China’s energy transition