00:00Let's talk now to Belinda Sharper. She's the China lead at the Center for Research on Energy and Clean Air.
00:07Belinda, thanks so much for joining us. China wants the initial framework of this plan in play by 2030. What
00:17does that tell us about its long-term energy strategy?
00:21Thanks so much, Michael, for having me. Yes, I think we can really very much see this as a blueprint
00:26for China's electricity system. We've seen a few previous 15th five-year plan which had broader targets for the energy
00:33transition, but this one is really about how to actually overcome the practical challenges of operating a power system that
00:41is largely based on clean electricity through stronger grids, storage, smarter markets and greater flexibility.
00:49It's basically trying to address a challenge that China has been facing with high curtailment rates. So, for example, solar
00:57and wind not being used as much or as efficiently as it could be, even though there's already so much
01:03capacity.
01:03So, it's very much about correcting these disincentives that are currently in the market, which still very much favor coal
01:11power in the past, and then really looking ahead, because as you said, electricity demand has been rising in China
01:18rapidly, and the plan expects that to continue in the future through electrification, AI and other areas.
01:26So, electrification becomes really crucial also from the point of energy security. As we have seen this year with the
01:33closure of the Strait of Hormuz, domestically produced renewables and combined with electrification can really provide that energy security.
01:42So, this plan is trying to bring all of that together and actually make it work.
01:46Now, you mentioned the focus on the future. Let's talk very briefly about AI, which needs a lot of power
01:52and water for cooling. What does this energy plan mean for China and its AI sector, as well as its
01:59ability to compete with other countries?
02:02Yeah, China is in a unique position that it's very used to this growth of electricity demand compared to other
02:08countries, such as the US or the EU, where electricity demand has been quite stable.
02:13So, China is in a bit of an advantage of being used to this, to scaling up and has been
02:19really deploying renewables very quickly in the past.
02:22So, now this plan of really integrating these renewables and not just building out new capacity, but really making it
02:28work and also to reduce coal and other fossil fuels in the power mix will be crucial for the future
02:36and will be crucial also to deliver a successful leadership role in AI.
02:42And as we discussed, like energy security concerns on everyone's mind. So, for this to continue, continued build-out of
02:50renewables will be crucial, but it will be important to kind of put this in place together with new market
02:56mechanisms that allow for flexibility for these renewables to actually be used and to make sure that the incentives that
03:04currently hold, give coal power this major role in the power system are being phased out.
03:11Great stuff.
03:12Belinda Sharper from the Center for Research on Energy and Clean Air. Thanks very much for talking to us. Sally,
03:19it's back to you.
03:20Thank you so much.
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