Comparing the energy transitions in Germany and China: Synergies and recommendations

Chen, Cheng; Xue, Bing; Cai, Guotian; Thomas, Heiko; Stückrad, Stefan Article Comparing the energy transitions in Germany and China: Synergies and recommendations Energy Reports Provided in Cooperation with: Elsevier Suggested Citation: Chen, Cheng; Xue, Bing; Cai, Guotian; Thomas, Heiko; Stückrad, Stefan (2019) : Comparing the energy transitions in Germany and China: Synergies and recommendations, Energy Reports, ISSN 2352-4847, Elsevier, Amsterdam, Vol. 5, pp. 1249-1260, https://doi.org/10.1016/j.egyr.2019.08.087 This Version is available at: https://hdl.handle.net/10419/243666 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Energy Reports 5 (2019) 1249–1260 Contents lists available at ScienceDirect Energy Reports journal homepage: www.elsevier.com/locate/egyr Review article Comparing the energy transitions in Germany and China: Synergies and recommendations Cheng Chen a, Bing Xue b,∗, Guotian Cai c, Heiko Thomas b, Stefan Stückrad b aLeibniz-Centre for Agricultural Landscape Research, Müncheberg D15374, Germany bInstitute for Advanced Sustainability Studies e. V., Potsdam 14467, Germany cGuangzhou Institute of Energy Conversion, Chinese Academy of Sciences, 510640 Guangzhou, China article info Article history: Received 28 December 2018 Received in revised form 24 July 2019 Accepted 31 August 2019 Available online xxxx Keywords: Energy transition Energy revolution Energy geography Germany China abstract Energy Transition towards a low-carbon emission energy system has been a long-term strategy for Germany and China. Both countries are expected to take the lead on the global effort to achieve clean energy and greenhouse gas emissions reduction. Although Germany and China have different characteristics, international-level strategic cooperation is essential for meeting the goals of both local and global energy transition. However, until now, no comparable research for energy transition in Germany and China exists in a peer-reviewed journal. In order to close this knowledge gap, a critical review was conducted and then some recommendations were proposed. First of all, after reviewing the background, milestones, current situation and challenges, we found infrastructure, policy instruments and market reform played the key roles in the transition process in Germany and China. While nuclear power and coal are likely to be abandoned in Germany, China has more ambition beyond the power sector and to reach self-sufficiency. As the two countries chosen different concepts and pathways to achieve their transition targets, there is great opportunity for them to take the lessons from each other. Germany and China need cooperation at multi-levels varies from politic, economic, scientific to public. Then, recommendations are presented on how to further foster cooperation and enable an energy transition. ©2019 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Contents 0. Introduction..................................................................................................................................................................................................................... 1249 1. An overview of energy transition in Germany ........................................................................................................................................................... 1250 1.1. Background: with a focus on the driving forces............................................................................................................................................ 1250 1.2. Milestone ............................................................................................................................................................................................................ 1251 1.3. Status quo........................................................................................................................................................................................................... 1251 1.4. Challenges........................................................................................................................................................................................................... 1251 2. Energy transition in China ............................................................................................................................................................................................ 1254 2.1. Background ......................................................................................................................................................................................................... 1254 2.2. Milestone ............................................................................................................................................................................................................ 1254 2.3. Status quo........................................................................................................................................................................................................... 1254 2.4. Challenges........................................................................................................................................................................................................... 1255 3. Comparison and synergies between Germany and China......................................................................................................................................... 1256 4. Recommendation for cooperation points .................................................................................................................................................................... 1257 5. Discussion........................................................................................................................................................................................................................ 1258 6. Conclusion ....................................................................................................................................................................................................................... 1259 Declaration of competing interest................................................................................................................................................................................ 1259 Acknowledgments .......................................................................................................................................................................................................... 1259 References ....................................................................................................................................................................................................................... 1259 ∗Corresponding author. E-mail address: [email protected] (B. Xue). 0. Introduction As global warming affects the long-run sustainability of human beings regional-crossly, it can only be tackled in a conjoint https://doi.org/10.1016/j.egyr.2019.08.087 2352-4847/©2019 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). 1250 C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 international effort. The Paris Agreement links the upper limit with a specific action target: global greenhouse gas (GHG) neutrality by the second half of the century (UNFCCC,2015). Given the fact that around two-thirds of GHG emissions from energy production and utilization, energy decarbonization has been increasingly critical for addressing the low-carbon development responding to climate change mitigation. This can only be achieved with the massive deployment of renewable energy combined with energy efficiency (IRENA,2017). Just a few months before the Paris climate conference, the international community, meeting in New York in September 2015, adopted the 2030 Agenda for Sustainable Development with its 17 Sustainable Development Goals (SDGs) (UN,2015). Energy lies at the heart of these SDGs, particularly in the goals of energy access, climate mitigation, lower air pollution, as well as for sustainable urbanization and industrialization. Under such circumstances, the global energy system must undergo a profound transformation, from one based mainly on fossil fuels to one that enhances efficiency and is based on renewable energy (IRENA,2018). Sustainable energy transitions, which broadly described as moving away from fossil fuels towards renewable resources and reducing energy demand, are emerging across the world, albeit in uneven ways (Dowling et al.,2018). Germany is widely considered a pioneer when it comes to energy transition (Knopf and Jiang,2017). In line with international trends, Germany had set up an ambitious plan for climate protection, aiming to reduce Germany’s GHG emissions by the year 2020 by 40% compared to 1990, until 2050 by 80 to 95% (BMU,2016). As a critical aspect of the plan, the German energy transition (known in German as ‘‘Energiewende’’), laid important groundwork to reform the energy sector, as well as for demonstrating energy transition practice at the global level (Gao et al.,2018). The Energiewende is an integrated policy framework, covering all sectors of energy and economy, including the targets and policy measures for CO2 emission reduction, renewable energy development, phase-out nuclear energy by 2022, and improvement of energy efficiency (Haas,2018;BMWi,2018). For example, with its national support scheme for renewable energies, Germany has made a substantial contribution to the global technological development of wind power, photovoltaics, and the associated cost depression (Lutz et al.,2017). Furthermore, the Renewable Energy Act (in German: Erneuerbare-Energien-Gesetz, abbr.: EEG) serves as a model for other countries around the world, and the German government has a proven track record of supporting the global expansion of renewable energy (Quitzow et al.,2016a). The global energy transition, however, has more than one pioneer, particularly in the field of developing renewable energy. As the world’s biggest energy consumer, China accounted for 23% of global energy consumption and contributed 27% to global energy demand growth in 2016 (IEA,2017), therefore, China’s role in global energy transition is critical in determining global trends due to the scale of China’s clean energy deployment, technology exports, and outward investment (Liu et al.,2018). In June 2015, China officially committed to achieve the peaking of CO2emissions around 2030 and make best efforts to peak early. China also committed to lower CO2emissions per unit of GDP by 60% to 65% from the 2005 level and increase the share of non-fossil fuels in primary energy consumption to around 20%. As a result, China’s development of non-fossil energy (renewable energy and nuclear power) is rapidly being promoted. In 2017, China accounts for a record 45% of global investment in renewables (excluding hydropower larger than 50 MW), up from 35% in 2016 (REN21,2018). The International Energy Agency predicted that China alone is responsible for 40% of global renewable capacity growth between 2017 and 2022 (IEA,2017). However, the lack of successful transition experience also makes the government less confident in facing the output uncertainty and variability of renewable energy. In general, German energy transition and Chinese energy revolution share three similar goals, namely reducing GHG emissions, expanding the use of renewable energy and increasing energy efficiency. On top of those, affordable and secure energy supply is also a clear strategic goal for both countries. However, China uses the term of ‘‘Energy Revolution’’ instead of the internationally well-accepted term energy transition. Literally speaking, revolution is a stronger expression than transition, reform or change. Therefore, some Chinese researchers claim that revolution can demonstrate the determination of the Chinese government in reforming the energy sector (Wu and Zhan,2013). The differences are more than just terminology. While the Energiewende in Germany highlights the efforts in the electricity sector, China has ambitions in also transforming the transportation sector towards renewables. Such common ground and differences make it potentially possible and profitable for the two countries to cooperate in diverse ways. After the withdrawal of the United States from the Paris Agreement, China and Germany are acting more ambitiously on the leadership of climate protection and energy transition (Knopf and Jiang,2017). The governments of Germany and China have vowed to intensify their joint efforts in global climate diplomacy and in upholding free trade, as well as in the development and rollout of energy transition technologies. In a joint statement on the occasion of the 4th German–Chinese Intergovernmental Consultations, which was co-chaired by Chinese Premier Li Keqiang and German Chancellor Angela Merkel, the two countries announced that ‘‘both sides welcome the innovative cooperation between universities, research institutions, and companies from both countries in the field of sustainable energy. Both sides will work to boost cooperation in the fields of improving energy efficiency and expanding renewable energy’’. In principle, the issue of energy transition is related to global political and technological transformation; no single country can formulate and successfully implement its plan. Therefore, strengthening the multi-level understanding and strategic cooperation at the international level is essential for meeting the goals of energy transition. In other words, it is entirely necessary to examine and analyze the energy transition from a comparative perspective (Marquardt et al.,2016). In contrast to the growing cooperation at the political and public level, scientific communities had not contributed enough in mutual understanding and to monitor the policy environment in both countries. Only recently, energy transition policy has become the subject of scientific papers in Germany and China (Quitzow,2016b). We found that, until now, no comparable research for energy transition in Germany and China exists in a peer-reviewed journal. In order to fill this knowledge gap, this paper aims to examine the policy of energy transition in Germany and China from a comparative perspective and offer synergies for better cooperation. 1. An overview of energy transition in Germany 1.1. Background: with a focus on the driving forces In 2010, Germany set up a plan to achieve its energy transition with short-term and long-term targets for the pathway to 2020, 2030, 2040 and finally increasing the share of renewables in power consumption by 80% in 2050. As an integrated policy framework covering all sectors of energy and economy, this policy is now widely known as the German energy transition (the so-called Energiewende). However, this energy transition already started with the introduction of fixed feed-in-tariffs for renewable energy long time earlier. In the wake of the nuclear C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 1251 accident in 2011, a more rapid transition was triggered and the decision was then taken further to phase-out nuclear power by 2022. It is considered an ambitious industrial project and requires technical and societal transformations, ultimately not only within Germany but in the whole of Europe. While discussions of the Energiewende in Germany reveal diverse viewpoints about goals and prioritization, CO2emission reduction, renewable energy development, phase-out nuclear energy, and improvement of energy efficiency were virtually accepted as driving forces and targets (see Table 1). In 2014, the previous Federal Minister of Economy and Energy, Sigmar Gabriel, has declared the following five goals for the Energiewende: (i) nuclear phase-out, (ii) the reduction of dependence on imported oil and gas, (iii) the development of new technologies, growth and new jobs, (iv) climate change mitigation, and (v) motivation of others to imitate the Energiewende (Gabriel,2014). 1.2. Milestone The Energiewende can be taken as a series of federal laws that build on each other, each one adapting to current realities while maintaining focus on the long-term vision. With the support from EEG, the share of renewable energy sources in power sector has been growing significantly, with the proportion of renewable energy in gross power consumption (total volume of electricity consumed in Germany) increase from roughly 6% in 2000 to 31.5% in 2016. The purpose of it is to enable a sustainable energy supply system, in line with climate mitigation and environmental protection goals, to reduce the costs of energy supply, to conserve fossil energy resources, and to promote technology development for renewable energy sources. Importantly, the EEG and its amendments in 2004, 2009, 2012, 2014 and 2017 have set up the main target in reaching the minimum shares of renewable energy in electricity supply pathway to 2050. In September 2010, the Energy Concept, a comprehensive new strategy and the basis guiding its energy transition have been adopted. The Energy Concept provides a long-term strategy for Germany to become an energy efficient and environmentalfriendly economy while maintaining competitive energy prices and a high level of prosperity. Following the Fukushima nuclear accident, the Energy Concept was updated in 2011, aiming to accelerate the phase-out of Germany’s nuclear fleet by 2022 (Table 2). In November 2016, as one of the first countries submitted its long-term development strategy for achieving low GHG emission to the UN as required under the Paris Agreement, German government adopted the Climate Action Plan 2050, making Germany one of the first countries to submit the long-term Climate Action Plan 2050. In particular, it set up a target for reducing GHG emission in general and in various economic sectors, in order to reach its 2050 climate goals. 1.3. Status quo To understand where Germany stands in its energy transition, one needs to look at the energy system as a whole, in particular, final energy consumption, how much different end consumers use energy, and energy production, which sources of energy make up the national energy mix (Fig. 1) (AGEB,2018). The expansion of renewable energy is a central pillar in the energy transition of Germany. In recent decades, Germany has significantly diversified its electricity mix towards renewable energy, which grew from 4 percent in 1990 to 33 percent in 2017 (Fig. 2). However, the share of renewable energy in other sectors (transport and heating/cooling) has not increased proportionally due to a strong focus on the electricity sector. To get an idea where the energy transition in Germany stands right now, Fig. 3 depicts the primary energy consumption in 2017. Though renewables account for 13%–14% of the total primary energy consumption biomass still dominates the renewables share and wind, solar and solar thermic make only up for about 4% combined. It shows, that despite enormous efforts, it is still a long way to go for Germany to achieve the goals it set. Not surprisingly, looking at these numbers Germany sled back on its goals for 2020 recently, and simply postponed them. Please notice that Germany so far spent more money on subsidizing coal in the past than to promote renewables via the renewable energy act. Throughout the energy transition process, the German government have been working on the basis of an ‘‘efficiency first’’ principle and has been seen it as ‘‘the only way to adequately limit demand and ensure that the increased use of renewable energy can be carried out in a way that conserves resources and does not impact negatively on nature’’. Germany not only increases the share of green energy in its supply but also uses energy more economically. Primary energy consumption has been cut significantly in recent years in Germany, by 7.6% between 2008 and 2015 (BMWi,2016). 1.4. Challenges Many challenges lie ahead to transform the entire system. These challenges range from grid infrastructure and digitization to market design. As wind, solar, hydro and geothermal energy are fluctuating sources, the dispatching and absorption energy system needs to adjust accordingly and offer flexibility to guarantee a reliable supply. Technologies need to be developed to make other energy resources as complements and make traditional cogeneration plants to work more flexibly. Furthermore, expanding wind and solar power production will lead to growing supplies of excess power. Therefore, energy storage technologies and innovative transform solutions like power-to-gas will be also in needed. Additionally, demand-side management is a key for energy efficiency. Some power consumers already adjusted their power consumption to supply. In the future, all consumers, from private households to industrial large-scale consumers, will play a role in the power market by responding to supply. ‘‘The Energiewende will succeed if we make progress with the grid extension’’, Germany’s new Federal Minister for Economic Affairs and Energy, Peter Altmaier, said simply, in his first speech to parliament in March 2018. The energy transition’s big success to date is the rapid growth of renewable power generation, which covers almost 40 percent of German power consumption in early 2019 — up from 3.2 percent in 1991 (ZSW,2017). However this also poses a problem due to the vast number of decentralized renewable energy installations and how the grid operators have to deal with integrating these because they are forced to by law, possibly leading to necessary investments in grid upgrades that have to be reimbursed and finally be paid by the consumer via the grid fee that is part of the electricity bill (Matchoss et al., 2019;Bayer et al.,2017). The biggest share of renewables in the electricity sector is wind, mainly generated in the country’s north, and in order to make proper use of it, high capacity transmission lines have to be built connecting wind farms in the north with the entry point of former fossil and nuclear power plants in the more industrial south and west of the country leading to a number of acceptance issues due to visual and environmental impacts, cost and building density in Germany that complicates finding a proper route, and already led to a new federal regulation that favors cables over overhead lines (Thomas et al.,2016). Among the three elements of the government’s so-called energy policy target triangle, supply security, affordability, environment and climate, a monitoring report noted the biggest failure in addressing climate protection sufficiently (BMU,2018). 1252 C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 Table 1 Key German energy transition targets. Source: Date source: The Sixth ‘‘Energy Transition’’ Monitoring Report (BMWi,2018). Target 2016 2020 2030 2040 2050 GHG emission (compared with 1990) −27.3% −40% −55% −70% −80% ∼ −95% Renewable energies Share of gross electricity consumption 31.6% 35% 50% 65% 80% Share of gross final energy consumption 14.8% 18% 30% 45% 60% Energy efficiency Primary energy consumption (compared with 2008) −6.5% −20% −50% Gross electricity consumption (compared with 2008) −3.6% −10% −25% Primary energy consumption in buildings (compared with 2008) −18.3% −80% Heat consumption in buildings (compared with 2008) −6.3% −20% Final energy consumption in the transport sector (compared with 2008) 4.2% −10% −40% Nuclear phase-out Gradual shut down nuclear power plants by 2022 Electric vehicles One million electric vehicles on the road by 2022 Table 2 Overview of major energy policies and strategies in Germany. Publication year Document title Key context 2000 Renewable energy act (EEG) EEG implements a fixed feed-in tariff for renewables, paid for through a surcharge on consumption, creating a reliable market to support higher investment and participation in renewable energy generation. The EEG also prioritizes renewable energy, ensuring access to the grid. 2010 Energy concept The Energy Concept establishes specific milestones for the integration of renewable energies and climate change mitigation strategies by 2020 and 2050. Targets and methodologies for measuring and assessing energy efficiency are introduced. 2011 Phase-out nuclear power In response to renewed public opposition following the Fukushima disaster in Japan, the government recommits to closing all German nuclear power plants by 2022. 2014 EEG 2.0 EEG 2.0 reduces fixed tariffs, creating auctions for most solar producers, recalculating the surcharge to assist large industry, and forcing self-suppliers to pay a surcharge. 2016 EEG 3.0 EEG 3.0 suggest that market auctions could soon replace fixed feed-in tariffs for nearly all renewables installations, a ‘deployment corridor’ would help ensure new capacity growth is compatible with grid expansion, and further liberalization of the auction’s markets, including opening up to international producers, might be tested. Fig. 1. Gross electricity production by sources in Germany 1990–2017, unit: TWh. Source: Data source: AGEB (2018). C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 1253 Fig. 2. Share of energy sources in gross electricity production in Germany in 2017. Source: Data source: BMWi (2018). Fig. 3. Primary energy consumption in Germany in 2017. Source: Data source: BMWi (2018). While the share of renewables in electricity production has increased greatly, the overall picture is less positive (Fig. 3). In fact, Germany’s Energiewende has been about electricity, not energy-transition (Hedberg,2017). Little has been done to bring about energy transition in the heating and transport sectors. Additionally, its efforts to improve energy efficiency have been insufficient. It has not lowered its dependence on energy imports. It has incentivized the deployment of renewables in less optimal market where the financial return has been weak. As a result, fossil fuels, including coal and gas continue to dominate as the principal sources of energy (Fig. 3). The Climate Protection Report from the government showed that Germany will widely miss its 2020 GHG reduction target by 8% (BMU,2018). The price for Germany’s energy transition is one of the project’s most controversial aspects (Fig. 4). Power prices in Germany are among the highest in Europe (Eurostat,2017). Despite a slight decrease in early 2018, taxes, levies, and surcharges accounted for more than 55 percent of a total power price of 29.16 eurocents per kilowatt hour (ct/kWh) (Eurostat,2017). As a consequence, in Germany there is a growing opposition against going forward with the Energiewende (Unnerstall,2017). 1254 C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 Fig. 4. Component of the German electricity price in 2017. Source: Date source: BDEW (2018). 2. Energy transition in China 2.1. Background In 2014, Chinese President Xi Jinping called for an ‘‘Energy Revolution’’, specifying on reducing energy consumption, increasing energy supply, improving energy technology and institutional reform (IEA,2017). Actually, the idea of ‘‘Energy Revolution’’ was officially introduced by previous President Hu Jintao in 2012 during the 18th national congress of the Communist party of China (CPC), The ‘‘Energy Revolution’’ initiates ecological civilization construction, holding the idea of revolution of energy production and consumption’’. The transition to a cleaner energy system is driven by the need to improve air quality, combat climate change, and eventually reduce the dependency on fossil fuels. Also, supporting a growing economy and at the same time reducing the carbon foot print are targeted. Additionally, responding to the global efforts towards climate governance, China has, in its nationally determined contribution (NDC) commitment announced on 2016, set its energy-related targets for 2030: peaking CO2 emissions by 2030 the latest; lowering carbon intensity of GDP by 60%–64% comparing with 2005 levels by 2030; increasing and achieving the share of non-fossil energy consumption among total primary energy consumption to around 20% (NDRC,2015). China’s overall energy strategy includes several elements. For industrial policy, the Made in China 2025 plan emphasizes green technology such as renewable energy, electric vehicles, and advanced power system equipment. In the near-term, China National Energy Administration (NEA) recently issued Work Guidance of Energy Sector 2018, also emphasizing shifting towards lowcarbon, clean energy and clean heating supply while restricting coal consumption. China has also launched a series of documents on renewable energy development at the city level, for example, 36 low-carbon pilot cities, 81 new energy model cities, and eight new energy industrial parks are selected as demonstration projects (Yuan et al.,2018). The energy transition in a rural area is also happening, for example, from traditional biomass energy to commercial energy like electricity (Han and Wu,2018) (see Table 3). 2.2. Milestone The Chinese government has a variety of top economic and social development plans regulating energy production and consumption. Responding to the Five-Year Plan (FYP), China has unveiled its 13th FYP on energy (NDRC,2017a), which represents the basic outline of China’s energy policy from 2016 to 2020. In particular, it sets the first ever mandatory coal cap, and shows the commitment of government to cut coal’s share in the country’s energy mix, indicating a right track towards its energy transition. FYP for each category such as electricity in general, coal, natural gas, wind power, and solar power have also been sequentially released. For example, the 13th FYP on Renewable Energy provides specific goals and measures, with a particular focus on renewables for 2016–2020 (NDRC,2017b). Along with FYPs, the Strategic Energy Action Plan (2014–2020) was issued by the State Council in 2014 (State Council,2015). This strategy plan aims to reduce China’s high energy consumption per unit GDP ratio through a set of measures and mandatory targets, promoting a more efficient, self-sufficient, green and innovative energy production and consumption. It puts forward energy conservation as a priority in the power, industrial, building, and transport sectors. In April 2017, ‘‘Energy Supply and Consumption Revolution Strategy (2016–2030)’’ was released (NDRC,2017c). Beyond the pathway of the 13th FYP on Energy, it set up new and higher targets for future. The main focus of the strategy remains a commitment towards a sustained growth in the utilization of renewables, gas and nuclear power and a radical decrease in the consumption of high-carbon fossil energy. In 2030 primary energy consumption should be controlled within 6 billion tons, and non-fossil fuel in the energy mix should be higher than 20%. Looking into 2050, total energy consumption would stabilize and non-fossil would account for more than half of it. With this Strategy, China is expected to become a major player in global energy governance. In addition, National Action Plan on Climate Change and China’s Intended National Determined Contribution have set energy related targets, responding to the global climate change (see Table 4). 2.3. Status quo China has begun to diversify its energy mix and turn to renewable energy over the past 10 years. From 2005 to 2017, the share of renewable energy generation increased from 16% to 25%. The yearly added wind power installed capacity has declined while solar PV are surging. Based on the results of the China Renewable Energy Outlook 2017 (CNREC,2017), the annual flagship publication of China National Renewable Energy Centre, the share of wind in total primary energy supply is expected to rise from 0.7% in 2016 to 4% by 2020, 12.5% by 2035 and 21.8% in 2050. Solar PV is expected to rise from 0.3% in 2016 to 1% in 2020, 6.5% in 2035 and 13.4% in 2050 However, fossil fuels still dominate the energy system. The total final energy consumption amounted to around 3,230 Mtce in 2016, with 61% of the energy consumption related to industry, 21% related to transport, and 14% related to buildings. Coal is the dominant fuel in the end-use sectors. In 2016, 39% of the final energy consumption was coal, 27% was oil, 19% electricity, natural gas 7%, district heating 5%, and bioenergy 2% (CNREC,2017). Despite a tremendous growth in renewable energy in China recently, the current Chinese energy system is far from the development targets of being clean, efficient, safe, and sustainable. According to the latest information from Chinese Electricity Council, as the largest share of Chinese electricity, thermal accounted for 71%, where coal dominated the component. Nuclear energy remains moderately (4%). Hydro power accounted for the majority of the renewable electricity generation. Wind and solar C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 1255 Table 3 Targets within China’s energy revolution targets. Target 2020 2030 Carbon emission Carbon emission per unit of GDP (compared with 2015) −18% CO2emission Peak or earlier Carbon emission per unit of GDP (compared with 2005) −60% to-65% Non-fossil Non-fossil fuel in the energy mix 15% 20% Natural gas in the energy the mix 15% Non-fossil power generation account for total power generation 50% New energy demand met by clean energy Should mostly be done Energy efficiency Energy consumption per unit of GDP (compared with 2015) −15% Primary energy consumption (unit: billion tonne tce) 5% 6% Energy self-sufficiency Energy self-sufficiency rate above 80% Energy governance By 2050, China shall become an ‘‘important participant’’ of international energy governance Vision towards 2050 By 2050, primary energy consumption should be stable, with more than half coming from non-fossil energy. Table 4 Overview of major energy policies and strategies in China. Year Document title Key context 2014 Energy Development Strategy Action Plan (2014–2020) Reduce China’s high energy consumption per unit GDP ratio through a set of measures and mandatory targets, 2014 National Action Plan on Climate Change (2014–2020) Set energy related targets, responding to the global climate change 2016 13th Five-Year Energy Development Plan (2016–2020) Set the first mandatory coal cap, and show the commitment of government to cut coal’s share in the country’s energy mix, indicating a right track towards its energy transition. 2016 13th Renewable Energy Development Plan (2016–2020) Provide specific goals and measures, with a particular focus on renewables for 2016–2020 2016 Energy Supply and Consumption Revolution Specify the long-term energy target towards 2030, and even longer, to 2050. are supported via a feed-in tariff and are becoming increasingly established. However, wind accounted only for 5% and solar for 2% of total electricity generation (China Electricity Council,2018), as can be inferred from Fig. 5. 2.4. Challenges While China is undoubtedly committed to a low-carbon energy transition over the long term, there are numerous short-term challenges. Along with the economic development, energy demand continues to grow rapidly but fossil fuels remain essential for meeting present needs. The institutional reform is a challenging part of the ‘‘Energy Revolution’’. Conflicts between provincial and national objectives need to be addressed urgently. Most provinces have overcapacity of coal power. Provincial officials concern that the reform could threaten the financial viability of province-owned power groups. This means that bilateral contracts, inter-provincial power trades, and spot market pilots should in place to promote economic dispatch. Furthermore, bottom-up policy initiatives and marketbased instruments are rare in China. The ongoing power sector reform should solve these issues and create a whole new framework for power system operation and development. However, the implementation of the power market reforms is currently proceeding slowly. Joint plans are missing in different provinces, which often have conflicting interests when it comes to cooperation on market set-up and trading arrangements (CNREC, 2017). Secondly, China’s electricity dispatching and absorption mechanism does not match the speedy development of renewable energy. Due to China’s geographical mismatch between resources and load centers, over 70% of China’s large-scale wind and solar projects have been installed in the resource-rich northern regions featuring low electricity demand and low export capacity (Zhou and Lu,2017). However, the construction of inter-regional transmission capacity in China has consistently lagged behind the growth of generation assets. Due to grid bottlenecks and china’s guaranteed full load hours for coal-fired power plants policy, curtailment of renewable generation has become significant. In 2016, 17% of China’s wind power generation (49.7 terawatt hours) was curtailed (NEA,2016). That is about 10% of the total electric energy consumption of Germany in comparison. Although the central government has established numerous policies to mandate minimum dispatch hours for wind and solar and for elimination of wind and solar curtailment, the integration of these resources remain a severe problem in several provinces. For example, in northeast Gansu Provinces, large amounts of wind and solar cannot be absorbed by demand inside the province, yet transmission capacity and broader dispatch areas for clean energy have lagged. In order to reform the electricity-dispatching mode, the investment in developing and constructing of energy-friendly grid should be promoted. Energy efficiency is still left behind in China. As the dominant of coal in the primary energy consumption mix will not fundamentally change in the near future (Zou et al.,2016), it is necessary to reduce direct combustion of bulk coal and strengthen the 1256 C. Chen, B. Xue, G. Cai et al. / Energy Reports 5 (2019) 1249–1260 Fig. 5. Share of energy sources in gross electricity production in China in 2017. Source: Date source: China Electricity Council (2018). efficient and clean use of coal for purpose of environmental protection. The overall efficiency of China’s energy system is still low, compared to economic potential and energy structure. In 2015, the energy consumption per 10,000 RMB of GDP went down by 5.6 per cent. However, the comprehensive energy consumption per ton of steel and per ton of cement only dropped by 0.56 per cent and 0.49 per cent respectively. This suggests that raising the efficiency of heavy industries can hardly further improve the whole energy system efficiency. 3. Comparison and synergies between Germany and China At the renewable energy sectors, both China and Germany take renewable energies as a key driving force in energy transition. In China, the rise of electricity and renewables are closely interlinked as China diversifies and cleans up its power mix — the share of coal in total generation falls from two-thirds today to less than 40% in 2040 as a result (IEA,2017), in other words, China sees renewables as a source of energy security and not just only to reduce carbon emission. Currently, China accounts for more than 40% of worldwide renewable capacity growth, and will continue to lead its expansion to another 30% by 2022 (IEA,2017). Even though the 13th five-year plans renewables capacity targets for 2020 are minimum targets, however, if the scenario of ‘‘Below 2 ◦C’’ was taken into account, the renewables development should go beyond the current targets: Solar from 110 GW to 200 GW, wind from 210 GW to 350 GW, bioenergy from 15 GW to 30 GW, according to the report of ‘‘China Renewable Energy Outlook 2017’’(CNREC,2017). While in Germany, expanding renewable energies has being taken as one of the two fundamental pillars for energy transition. The renewables provide major source for electricity needs of Germany, providing 37.8% of the electricity needs of Germany in 2018, making Germany becoming a world market leader in global wind and photovoltaics market (Laes et al.,2014). Joint Statement by Li Keqiang, Premier of the State Council of the People’s Republic of China, and Angela Merkel, Chancellor of the Federal Republic of Germany on 13 June 2016 in Beijing, China, said that ‘‘Both sides welcome the innovative cooperation between universities, research institutions and companies from both countries in the field of sustainable energy. Both sides will work to boost cooperation in the fields of improving energy efficiency and expanding renewable energies’’. The role of nuclear power is the fundamental difference between Germany and China. China sees nuclear energy as an important source for energy supply. Non-fossil energy rather than renewable energy appears more often in China’s energy policy, which considers nuclear energy and renewable energy under the same umbrella. On the contrary, phase-out nuclear energy is a cornerstone of the German energy transition. The wide debate of nuclear power in Germany was triggered by the Chernobyl nuclear accident in 1986. After the Fukushima disaster, a consensus for the need of phase-out nuclear power plants was reached and the last nuclear power plant will be shut down in 2022. China has published the medium and long-term nuclear power developing plan (2005–2020), which seed nuclear as an important source for energy security, electricity supply and environmental protection. Comparing the shares of nuclear in primary energy consumption, Germany (5,92%) clearly tops China (1,58%) in 2016. However, in Germany, both the amount of nuclear consumption and the share of nuclear in primary energy consumption did decrease profoundly, in particular after 2011. In China, the share of installed capacity of nuclear power generation has increased continuously to assure electric energy supply in a growing economy (Table 5). In 2016, the growth of China’s nuclear power generation was 9.6 million tones of oil equivalent (mtoe), which was the largest of any country since 2004. According to IPCC Report, coal is the most carbon intensive fossil fuel and coal-fired electricity must end by 2050 if we want to achieve the emissions reductions needed to limit global warming to 1.5 ◦C (IPCC,2018). Coal phase-out implies several interlinked policies, including the shut-down of coal mines, an exit from coal-fired electricity generation and removal of government subsidies to the coal industry. However, coal phaseout raised many concerns over energy security and reliability of electricity supply. Therefore, a gradual and structured plan is needed. China is the single largest coal consumer in the world, and coal represents more than 60 percent of its energy mix. China’s government has made recent announcements that could help to limit its coal use. In particular, the Chinese 13th FiveYear Plan includes plans for a cap on coal-based generation at a maximum of 1,100 gigawatts of capacity by 2020. And there have been recent attempts to control unnecessary new investment. In the long run, coal consumption will continue declining, despite the annual and seasonal fluctuations (Qi et al.,2016). However,