Is the one-nine law a familiar concept? It means to achieve carbon neutrality in energy structure, the consumption ratio of fossil energy and non-fossil energy should be around 1:9. However, the current ratio in Jiangsu Province is 9:1. Zhu Gongshan, Chairman of GCL Group, engaged in new and clean energy resources business, is pondering on ideas for a low-carbon, clean and sustainable development.
At the Ninth Plenary Session of the 13th Jiangsu Provincial Party Committee at the end of 2020, Lou Qinjian, the Secretary of the Committee, specifically pointed out that Jiangsu should take the lead in achieving the “Carbon Peak” target in the country. To Change the ratio from 9:1 to 1:9 poses a big challenge. What should Jiangsu Province do and how to take a leading role? Zhu Gongshan has drawn his own conclusion: the goal of carbon peak and carbon neutrality is like a holistic chess game throughout China and it will make a great opening gambit if a few provinces take the initiative to accomplish the mission first. For Jiangsu Province, it is not only necessary to promote the energy consumption structure toward a low-carbon transition in an all-round way, but also to establish a new growth model through carbon reduction and decarbonization across the entire economic system.
As told by Zhu Gongshan to the reporters, Jiangsu Province is high both in energy consumption and carbon emissions and therefore it shall be a key area in China’s carbon neutral transformation. “Jiangsu ranks third in the country in annual energy consumption, consuming approximately 330 million tons of standard coal, and ranks second in annual electricity consumption, consuming 626.4 billion kWh per year. Besides, its total pollutant discharge per unit of land area is above the national average. The ecological environment is ‘overloaded’ and the environmental cost is at its ‘overdraft’ limit. Still the new development plan of Jiangsu Province forecasts an annual electricity consumption of 820 billion kWh by the year 2025, a 30.9% increase compared with 2019.”
“Under the circumstances, Jiangsu’s first priority lies in energy saving, carbon emission reduction and system optimization”, said Zhu Gongshan. Driven by the goal of “Carbon Peak by 2030 and Carbon Neutrality by 2060”, Jiangsu Province should develop a cleaner and a more efficient way to increase and maximize the utility of the locally available heat and power resources, to realize an accurate demand-supply match with digital and intelligent control methods, and to significantly reduce the need for long-distance transportations. By technical and structural energy saving, Jiangsu aims at creating a new energy-saving economic model, guided by the government, promoted by institutions, oriented by enterprises, and participated by all citizens.
Meanwhile, Zhu Gongshan proposed to vigorously push for decarbonization on the supply side and to fully encourage zero-carbon innovations through the entire energy industry chain. “China’s national coal consumption will continue to decline rapidly during the ‘14th Five-Year Plan’ period after peaking in 2013. Oil consumption is estimated to reach its peak value at around 720 million tons by 2025. Natural gas consumption is predicated to grow in the next 10 to 20 years until its peaking by 2040. To realize Carbon Peak by 2030, Jiangsu Province must increase non-fossil energy supplies and reduce the dependence on traditional fossil energy.” Zhu Gongshan suggested that Jiangsu should limit its annual coal (including coal and coke) consumption within 195 million tons of standard coal, not exceeding the level as in 2019. “Coal reduction” action should be carried out and non-fossil energy infrastructure construction plans be implemented and adjusted. Jiangsu will expand its installed capacities of wind power, photovoltaic power, nuclear power, and biomass energy, pilot deployment of high-temperature gas-cooled reactor stations and promote the ‘External Power Supply’ policy. A project called “Three Gorges on the Sea” will be carried out, altogether for the purpose of “Jiangsu Green Power”. Substantial efforts should be expended on the “4+4” strategy, targeting four key areas (industry, energy, construction, transportation) and four key industries (electricity, steel, building materials, chemical industries), to create the effects of coordinated reduction of major pollutants and greenhouse gases.
“Vigorously support and Usher in the transformation of Jiangsu power system.” To the contrary of the coal-fired power reduction, there is an increasingly higher demand for electricity, especially in the context of new digital infrastructures such as 5G data centers and the large-scale promotion of electric vehicles. Zhu Gongshan held that to tackle with this problem and to achieve an electricity demand-supply equilibrium, more end-use energy sectors need to decarbonize by switching processing models to electrification or hydrogen energy, especially for those where decarbonization seems impossible given the current status quo, such as transportation and heating sectors. Zhu Gongshan told the reporters that GCL Group will formulate its schedule and its future business roadmap by holding two key points, to concentrate on technical innovations, reducing the photovoltaic on-grid electricity price to 0.15 yuan/kW as soon as possible, and to speed up the construction of GCL’s energy sector, pushing for the vehicle electricity separation mode in electric vehicles field.
With wider applications of large-capacity, high-density, high-security, and low-cost energy storage technologies and devices, “the combination strategy of renewable power plus energy storage will lead to a much lower power source price for full cost accounting, bringing optimization and even substitution to the existing power system during the 14th Five-Year Plan period.” Zhu Gongshan is confident on this. “It’s a package deal: to promote reforms in the power sector, including incremental power distribution networks, external electricity, high proportion of renewable energy access and priority consumption, etc., to fully explore the flexibility of the resources in the integrated energy system, to formulate a reasonable price compensation mechanism, to encourage energy storage facilities and electric vehicles to cooperate in the peak-shaving of power market under its frequency regulations, and to enhance end-use efficiency of renewable energy power by eliminating intermittent failures, reducing instability and absorbing fluctuations in wind power generation. All these plans and measures will produce great positive impacts on the development of renewable energy, on the applications of energy storage technology and digital technology, and on the construction of the energy network, which in turn will speed up the pace of decarbonization of power system in Jiangsu Province.”
In addition, Zhu Gongshan particularly emphasized the need to attach great importance to developing rural energy. “On one hand, actions should be taken to ensure a self-sufficient energy mode and to carry out harmless treatment, reduction and resource utilization of various organic wastes (agricultural and forestry residues, domestic waste, livestock and poultry manure, fruit and vegetable waste, domestic sewage, etc.) in rural areas. And on the other hand, measures like distributed power generation, biomass gas production and provision of biomass particulate matter should be implemented to improve the rural energy environment, strengthen the rural distribution network infrastructures and even provide energy to nearby cities and towns. For rural citizens, food production will also be energy production. It’s a realization of two incomes at one stroke.”
Looking at the “14th Five-Year Plan”, Zhu Gongshan believes that energy investment rules will be reshaped and new economy industries will continue to come up. “With the launch of the national carbon trading market, carbon asset management, covering carbon quota and national certified emission reduction (CCER), has becoming crucial for the development of enterprises. Carbon assets are regarded as critical corporate core assets now and its management will play a significant role in reducing the cost of corporate performance and compliance, enhancing corporate risk management and broadening the financing channels for energy-saving and emission-reduction projects. In the future, a great many new businesses will constantly emerge, including but not limited to carbon assets, carbon trading, carbon offsets, carbon funds, carbon financing, carbon footprint assessment, and carbon emission verification.”