China’s clean technology is made of dirty metals

Two months ago, the world’s governments signed on to an ambitious program for decarbonisation. The capacity of renewable power worldwide would triple by 2030, while energy efficiency would improve at double existing rates, delegates to the COP28 climate meeting in Dubai agreed.
Right now, those two objectives are pushing in opposite directions. To see why, look at China. The country is likely to build the lion’s share of new renewable capacity. At the same time, it’s responsible for about a third of the world’s emissions — and its efficiency is worsening. That’s almost certainly connected to the vast volumes of materials all those solar panels, electric vehicles, and wind turbines are using up, and the coal that’s getting burned in producing them.

Electricity consumption rose at a blistering 6.7% pace last year, the China Electricity Council, a trade group, said last week. If you still think China isn’t using energy in the lavish manner of rich countries, think again. In 2023, power demand came to about 6.54 megawatt-hours per person — about a third more than the average Italian or UK resident. This year, China’s per-capita electricity use is likely to overtake France and Germany.
No other country is installing renewable power at anything like China’s speed, but such a headlong rate of demand growth makes it very hard for clean energy to keep pace. Just the increase in electricity consumption last year was equivalent to all the power generated in Germany. With drought drying up hydro dams, coal ended up supplying nearly three-quarters of the additional electricity. Thermal power increased by 6.1% from a year earlier, a faster pace than the economy as a whole — a clear signal that China’s carbon efficiency is going backward.

What we’re seeing is a race between renewable energy installations and power demand, with the fate of the planet in the balance. The scale of wind and solar build-out in China looks impressive, but electricity consumption is rising so fast that it’s still not enough to stop the country burning yet more coal.

It would be a little comforting if this was a result of an improvement in Chinese people’s living standards, but that’s not what’s happening. Households only take about 15% of grid power, compared to 38% in the US. The driver of China’s electricity demand growth is instead the energy-intensive, carbon-emitting production of basic materials such as metal, glass, cement, chemicals and plastics.

Grid demand from those sectors rose by about 5.3% last year, according to the council, well ahead of the anemic 0.9% from households, and accelerating toward the end of the year. While that trailed the 11.3% pace in high-tech manufacturing, basic materials use so much electricity — about 29% of China’s total power generation in 2021 — that they’re still responsible for most of the rise in energy usage, as well as the consequent coal consumption and carbon emissions. The problem is that most of the new demand for these materials is coming from clean-tech industries the energy transition desperately needs. The boom sectors in China’s economy last year have impeccable green credentials: high-speed trains, solar cells, and electric vehicles saw the biggest jumps in output, at 63%, 54% and 30%, respectively.

The basic materials doing best are the ones being bought by those sectors. Output of aluminum alloy for solar panel frames and EV bodies climbed 18%; copper, used in everything electrical, rose 14%; laminated glass, for solar panels and auto windscreens, gained 9.2%.
Decarbonization is fueling consumption of metals, chemicals and glass, which are in turn causing a lot of greenhouse pollution as they’re manufactured. Clean-energy products are much more efficient than the alternative once they’re being used — but producing them is causing a spike in carbon emissions that may be ongoing for as long as current rates of growth are sustained.

There’s still reasons to hope that 2023’s dirty energy transition will prove a temporary blip. The full impact of China’s real estate crash is yet to show up in the materials sector. While developers have slashed building starts by about half, they’re still completing them at fairly normal rates as they struggle to raise cash from prospective buyers. Copper, aluminum, zinc and glass are typically used at the end of the build when windows, fittings and wiring are added, so we’re yet to see the collapse that will come when completions start to reflect the current depressed state of starts.

Manufacturing clean-energy products right now can be thought of as an investment in years of reduced emissions, as well. A solar panel produced in 2023 will still be generating zero-carbon power at the middle of the century — the pollution, like the cost, is all upfront. A coal power plant built this year, by contrast, will still need to be fed with fresh soot decades into the future.

Even so, it’s troubling how years of dazzling growth in China’s clean-energy sector are failing to put more of a dent in its emissions. Time is running short. If the country’s electricity demand growth doesn’t start slowing soon — and the council’s forecast is for another headlong 6% pace this year — even its record-breaking rollout of renewable power won’t be enough to avert disaster.