1. Christopher M. Dent University of Leeds Chinas 12 th Five Year Plan, Energy Security and Domestic Stability

2. Chinas 12 th Five Year Plan Context Chinas FYPs date back to the early 1950s Chinas FYPs date back to the early 1950s Maps out strategies and goals for economic development, specific projects and reforms Maps out strategies and goals for economic development, specific projects and reforms Less dirigste than before, now officially called guidelines rather than plans Less dirigste than before, now officially called guidelines rather than plans 12 th FYP (2011-2015) Continuity of objectives from previous FYPs: Continuity of objectives from previous FYPs: greening of economic growth greening of economic growth growth with greater social equity growth with greater social equity promoting domestic consumption promoting domestic consumption improve social infrastructures and safety nets improve social infrastructures and safety nets foster emerging high-tech sectors, e.g. solar foster emerging high-tech sectors, e.g. solar … more emphasis on sustainable development … more emphasis on sustainable development

3. Chinas 12 th Five Year Plan: Key Issues for Energy and Climate Change CC Related Targets and Policies Context: CO 2 emissions, tons per capita: China 4.9, EU 9.1, US 18.9 Context: CO 2 emissions, tons per capita: China 4.9, EU 9.1, US 18.9 Policies: Improve energy efficiency laws + standards, energy-saving market mech- anisms (inc. new taxes), establish carbon markets, improve emission monitoring systems, new energy-efficient transport, limit growth of energy-intensive sectors Policies: Improve energy efficiency laws + standards, energy-saving market mech- anisms (inc. new taxes), establish carbon markets, improve emission monitoring systems, new energy-efficient transport, limit growth of energy-intensive sectors Targets: Targets: By 2015: coals share - 70% to 62%, 17.3% reduction in energy-intensity (20% target met in last plan) By 2015: coals share - 70% to 62%, 17.3% reduction in energy-intensity (20% target met in last plan) By 2020: wind/solar/biomass: 200GW, nuclear 80GW, hydro 380GW (20% of total energy demand); 40-45% reduction in energy-intensity (CO 2 per GDP unit) By 2020: wind/solar/biomass: 200GW, nuclear 80GW, hydro 380GW (20% of total energy demand); 40-45% reduction in energy-intensity (CO 2 per GDP unit)

4. Chinas 12 th Five Year Plan: Key Issues for Energy and Climate Change Green Energy Sector Development Part of a broader programme of high-tech industrial policy Part of a broader programme of high-tech industrial policy 7 strategic industries for clean development: new gen IT, energy-saving and environment protection, renewables, biotech, high-end equipment, new materials and new-energy cars 7 strategic industries for clean development: new gen IT, energy-saving and environment protection, renewables, biotech, high-end equipment, new materials and new-energy cars Chinas Provinces Rural modernisation and developing new energy infrastructure and production in Chinas poorer provinces Rural modernisation and developing new energy infrastructure and production in Chinas poorer provinces New engines of growth for the Chinese economy? New engines of growth for the Chinese economy?

5. Chinas Provinces Chinas Provinces … some much richer than others… … some much richer than others… GDP nominal p/capita, US$ 2009 Richest – Shanghai Municipality (11,361), Beijing Municipality (10,070), Tianjin Municipality (9,136), Zhejiang (6,490), Jiangsu (6,475), Guangdong (5,965) Richest – Shanghai Municipality (11,361), Beijing Municipality (10,070), Tianjin Municipality (9,136), Zhejiang (6,490), Jiangsu (6,475), Guangdong (5,965) Poorest – Guizhou (1,502), Gansu (1,879), Yunnan (1,975), Tibet (2,216), Guanxi (2,316) Poorest – Guizhou (1,502), Gansu (1,879), Yunnan (1,975), Tibet (2,216), Guanxi (2,316) Populations in millions Over US$10,000 US$5,000 – US$10,000 US$3,000 – US$5,000 US$2,000 – US$3,000 Under US$2,000

6. Key Drivers in Chinas Energy Security Maintaining Dynamic Momentum High level energy inputs required to keep high economic growth rates, albeit more socially equitable and e-sustainable High level energy inputs required to keep high economic growth rates, albeit more socially equitable and e-sustainable Economic development as both a mechanism for further reducing poverty in China and source of geopolitical power Economic development as both a mechanism for further reducing poverty in China and source of geopolitical power Reducing Supply Risk Chinas increasing dependency on imported energy: Chinas increasing dependency on imported energy: diversification of energy partners diversification of energy partners domestic coal still viewed as more supply risk averse domestic coal still viewed as more supply risk averse Renewables, nuclear and strategic oil reserve development also to help mitigate this risk Renewables, nuclear and strategic oil reserve development also to help mitigate this risk

7. Key Drivers in Chinas Energy Security Upgrading Old Energy Infrastructure Around half of Chinese industry is still state-owned, energy inefficient and in need of investment Around half of Chinese industry is still state-owned, energy inefficient and in need of investment Upgrading with clean efficient energy technologies – a huge structural challenge Upgrading with clean efficient energy technologies – a huge structural challenge Reducing Environmental Risk Growing acknowledgement that energy production and consumption are the prime causes of increasingly acute environmental problems in China Growing acknowledgement that energy production and consumption are the prime causes of increasingly acute environmental problems in China Health costs, urban degradation, growing civil unrest, resource depletion and other pressures on the govt to find low carbon solutions Health costs, urban degradation, growing civil unrest, resource depletion and other pressures on the govt to find low carbon solutions

8. Chinas Fast Emerging Renewable Energy Sectors Wind Energy Chinas wind energy capacity doubles annually over 2005-2009 Chinas wind energy capacity doubles annually over 2005-2009 2005: 1.2GW capacity 2005: 1.2GW capacity 2010: 41.8GW (now the worlds largest, overtaking the US last year) 2010: 41.8GW (now the worlds largest, overtaking the US last year) Over 50 Chinese wind turbine producer firms, three in the world top 10 Over 50 Chinese wind turbine producer firms, three in the world top 10 Rate of sector expansion has far exceeded the Chinese govts expectations Rate of sector expansion has far exceeded the Chinese govts expectations Still huge potential for further sector expansion Still huge potential for further sector expansion CompanyCountry Production (GW) 1. VestasDenmark 6.3 2. GE WindUSA 5.8 3. SinovelChina 5.8 4. GamesaSpain 4.4 5. SuzlonIndia 3.5 6. GoldwindChina 3.4 7. EnerconGermany 3.3 8. DongfangChina 3.3 9. RepowerGermany 2.9 10. NordexGermany 2.5 World Top 10 Wind Turbine Producers

9. Chinas Fast Emerging Renewable Energy Sectors Solar Energy This sector is also growing rapidly in China… This sector is also growing rapidly in China… Now around 500 firms producing PV cells, China has four of the world top 10 producers Now around 500 firms producing PV cells, China has four of the world top 10 producers Past emphasis on export, now on increasing domestic SP capacity Past emphasis on export, now on increasing domestic SP capacity However, domestic SP capacity is still very small (0.2GW in 2009) However, domestic SP capacity is still very small (0.2GW in 2009) Plans to hit 2.0GW by end of this year Plans to hit 2.0GW by end of this year CompanyCountry Production (MW) 1. First SolarUS 1,322 2. SuntechChina 1,090 3. Q-CellsGermany 1,000 4. JA SolarChina 800 5. Solar WorldGermany 710 6. SharpJapan 695 7. Trina SolarChina 600 8. YingliChina 600 9. Gintech EnergyTaiwan 600 10. KyoceraJapan 440 World Top 10 Solar Photovoltaic Cell Producers

10. Green Energy Investment in China and Europe (US$ bn) 10 China Europe Source: Bloomberg New Energy Finance Chinas Investment in Green Energy

11. Concluding Points Under the 12 th Five Year Plan (2011- 2015), China will continue to raise its investment across a number of green energy sectors Under the 12 th Five Year Plan (2011- 2015), China will continue to raise its investment across a number of green energy sectors At the same time, China will maintain its burgeoning demand for oil, coal and gas, and faces a number of structural challenges in improving its energy efficiency levels At the same time, China will maintain its burgeoning demand for oil, coal and gas, and faces a number of structural challenges in improving its energy efficiency levels Chinas common but differentiated responsibilities view on climate change Chinas common but differentiated responsibilities view on climate change Positive signs ahead… Positive signs ahead… recent developments in US-China clean energy diplomacy recent developments in US-China clean energy diplomacy expect future enhancement of EU- China dialogue on climate change? expect future enhancement of EU- China dialogue on climate change?