Electric Vehicles and Coal Stoves – a Tale of Two Chinas
In February 2018, I went on a two week trip through China ranging from Changchun in the far North to Guangzhuo and Shenzhen in the South. It was mainly a holiday (skiing in Changchun and celebrating Chinese New Year with my girlfriend’s family in Guangzhuo) but the sustainability geek in me took the opportunity to suss out the rollout of electrical vehicles and renewable energy across those cities.
Northern China – Changchun
My first stop was Changchun which is way up North near Inner Mongolia. I was travelling with my girlfriend’s uncle who is an electrical engineer and knows a fair bit about the trajectory of China’s electricity grid. According to him, there is conflict between the national and provincial governments about the transition to renewable energy. The national government has lofty carbon reduction and pollution reduction targets, and consequently is pushing hard for the closure of coal power stations. The provincial governments want to balance this pressure with the need to maintain local employment.
According to uncle (I’ll just call him that for brevity), many Northern provinces are doing it tough right now because quite a few large factories, steel mills and other big industrial plants have closed down in recent years. The days of building “ghost cities” purely for the sake of hitting production quotas are over (probably a good thing) as the government steers its economy towards advanced manufacturing rather than being the world’s sweatshop. As a consequence of the declining electricity demand, a considerable number of power stations have been closed down and the federal government is cancelling or postponing the construction of hundreds of unviable generators.
On the other hand, provincial governments are keen to keep the plants that employ more people, which unfortunately are generally coal power stations with associated mines rather than hydro/solar with their reduced maintenance requirements. I found it a bit depressing that hydro power stations are sitting idle (with close to 200 TWh of “abandoned energy” in 2016 in Sichuan alone) but apparently that’s what happens when you don’t have enough high-voltage, direct current (HVDC) lines interconnecting provinces.
Does Energy Management Have a Home in China?
Uncle went as far as to say that he sees no immediate need for energy management products like EnergyLink in China. According to him, the authorities are desperate for people to use more power rather than less so that they can keep people employed in those plants. Despite this, he does have hope that renewables will play more of a role in northern China over time.
The current emphasis has been on cleaning up the existing coal infrastructure. Restaurants and homes have been banned from burning coal for heating which was a key source of air pollution. They still have massive smoke stacks burning coal for municipal heating but it’s much easier to filter out hazardous particulates at a centralised point rather than dealing with thousands of bodgey heaters with no filtering whatsoever. Maybe it was just favourable weather conditions but Changchun was actually very clean despite the smoke stacks.
I was there for five days and had clear blue sky every day. The other factor that might have helped was a greening up of the vehicle fleet. Most cars on the road looked pretty new and due to the presence of backbones amongst its politicians, these vehicles must meet stringent emissions standards.
Guangzhuo, Shenzen & the Electric Fleets
There were no motorcycles in any of the cities I went to. Apparently they were banned 11 years ago in Guangzhuo due to safety and pollution concerns. Instead electric bicycles whizzed around everywhere in Guangzhuo and there were a few electric cars/buses on the road too. Although Changchun had plenty of electric bicycles, I didn’t see a single electric car there. This may be due to its frigid climate (-35°C while I was there) which has a decidedly negative impact on battery performance. Apparently e-taxi drivers in Beijing had to turn off their heaters to eke out a living while using the first wave of EVs, because otherwise the range was under 100km (and it wasn’t much better even with the heaters turned off).
On the other side of the extreme was Shenzhen. Shenzhen, neighbour to Guangzhuo, has attracted international attention for its decision to replace its entire bus fleet with electric buses. I went there for a day trip and can assure you it’s the real deal.
Apart from inter-city buses, every bus in the city was electric. They’re a blast to ride on; the acceleration is incredible! You typically think of buses as being these big, clunky metal boxes that handle like a rhinoceros. The electric buses I rode on in Shenzhen routinely beat cars through the traffic lights from a standing start. They’re also much quieter than diesel buses and a bit less bumpy. It seems they make business sense as well, being substantially cheaper to run (the operational costs of eBuses are $39,000 per year lower than for diesel buses) even with the cost of the big battery pack.
It’s said that there is no Moore’s law of batteries, but giga factories are leading to a steady reduction in price per kWh of storage and an increase in energy density. We could hit $100/kWh by 2022, a ten-fold decrease from 2009 prices. The efficiency curve will need to ramp up quickly in the next few years for private EV ownership to hit an inflection point. Despite generous EV subsidies, Chinese consumers are still not buying them en masse due to a perception that EVs are cramped (the cheap models are the size of smart cars), expensive (sticker shock seems to overwhelm calculations of total cost of ownership) and underpowered (you can’t blame them when taxi drivers have to spend 4 hours per day charging their vehicles).
Late last year, the government announced changes to EV subsidies that will put the onus on manufacturers to produce better quality and higher quantities of EVs. In the short-term, the change in the subsidy regime may cool demand even further. Subsidies dropped by 20% in January, coinciding with a similar drop in EV purchases showing that the current market is heavily reliant on government intervention.
It may be a tricky few years before the technology catches up with consumer ambitions. Regardless, it seems like the government is set on rolling out the infrastructure to be ready. Strolling around Shenzhen and Guangzhuo, we came across numerous EV charging stations. None of the cars parked there were electric but it’s a compelling sign of what will hopefully come in the next few years. The pace of change is exciting. I was in Guangzhuo last year and didn’t see any of these charging stations (though maybe I wasn’t looking hard enough). I’m excited about heading back next year and hopefully seeing even more EVs on the road.
The Overall Sustainability Atmosphere in China
China is definitely taking sustainability seriously. A big part of this push is to combat air pollution. With over one million deaths per year attributable to air pollution in China, the political will to take action is quite strong. President Xi Jinping declared war on air pollution in 2014 and progress is being made. In 2017, PM 2.5 (a measure of the most dangerous type of air pollution) air pollution declined by 33% in major cities like Beijing. Improvement has been slower in the smaller cities but hopefully we’ll see better results in 2018.
As well as the health argument, there’s a strong economic argument. China is undoubtedly the world leader in solar panel manufacturing and if they can crack the puzzle of cheap and energy dense batteries, they’ll dominate two other emerging markets: electric vehicles and energy storage. Australia’s government would do well to follow China’s lead in moving towards industries of the future rather than trying to revive old King Coal.
It will be interesting to see whether energy efficiency becomes a priority in China. Even with some of the lowest electricity prices in the world, wasted energy is still wasted energy. China does already have relatively strong appliance efficiency standards which may transition into demand response programs and the like in coming years.
It’s certainly going to be exciting times ahead as electric vehicles roll out in more cities in China. Who knows – maybe when I go back next year, there will be a lot more EVs on the road.