In this episode of Environment China, we are talking about China's long-term pathway to carbon neutrality and, in particular, about the recent publication of the China Energy Transformation Outlook, or CETO, which provides two scenarios of China's clean energy transition. We talk to Kaare Sandholt, International Chief Expert for the China Energy Transformation Programme. The programme is run by the Energy Research Institute of the NDRC.

Topics we address include:

• The importance of long-term modeling, and its contribution compared to five-year plans or other policy planning
• How CETO's two main scenarios compare: both assume carbon neutrality by 2060 and similar GDP growth, but differ in terms of energy mix and technology progress
• The role of electrification and energy efficiency: starting with transport, but also in industry, which requires both a cleaner grid and lower direct combustion of fossil fuels, which wastes huge amounts of energy through waste heat
• The importance of structural economic transformation: CETO assumes China makes substantial progress transitioning away from heavy manufacturing
• The reforms that CETO anticipates, including especially in power markets (merit-order dispatch, cross-regional electricity trading, and price signals), but also in carbon markets and industry standards
• The role of gas: gas will rise rapidly in relative terms, with 50-50 growth between power sector and industry; in coastal provinces gas is for flexibility in the power sector, and inland provinces gas is for industry; but it will not become a major transition fuel that takes the place of coal
• The amount of wind and solar capacity that will be needed: while the RE capacity requirement has risen due to faster electricity demand growth, the annual additions needed are roughly in line with present wind and solar additions

The report is available in English here:

https://www.cet.energy/

And Kaare Sandholt has an excellent article in a recent issue of Carbon Brief, published together with Wang Zhongying:

https://www.carbonbrief.org/guest-post-china-will-need-10000gw-of-wind-and-solar-by-2060/

Executive Producer of this episode: Anders Hove