Energy

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

When the temperature drops to freezing in a country of almost 1.4 billion people, the power needed to keep the population warm soars.

That's one of the main reasons China's northern cities have spent much of the past month choking on smoggy, toxic air.

Particulate concentrations in areas north of Shanghai that once qualified for state heating subsidies and retain a legacy of coal generation tend to be about 55 percent higher than in areas to the south, according to a 2013 study -- enough to reduce lifespans by about five-and-a-half years.

While China's headlong construction of new renewable generation capacity may be taking the edge off this, its effect is felt least in the winter when reservoirs run low, skies darken, wind speeds fall, and smog settles in.

The Rain in Hubei Falls Mainly on the Plain
China's renewable-energy generation is still driven by summer storms filling its hydroelectric reservoirs
Source: National Bureau of Statistics of China
Note: Some data missing. Solar data not available before 2016.

While improvements to the country's electricity grid may ameliorate the situation by allowing China's northern cities to feed on more of the power generated from the country's vast western hydro, wind and solar installations, that's unlikely to be enough to stop the smog.

Even measured in terms of total generation, there's a lack of renewable electricity supply available during the coldest months.

Where the Sun Don't Shine
Renewables' share of China's electricity mix can fall as much as 10 percent over the last quarter of the year
Source: National Bureau of Statistics of China, Gadfly calculations
Note: Shows hydro, wind and solar electricity generation as percentage of total electricity generation. Solar figures not available before 2016. January-February figures not available.

One glaring gap in the country's energy mix is nuclear power. While nuclear is more costly than renewable energy -- and far more costly when astronomical decommissioning expenses are included -- it has the advantage that availability isn't contingent on the weather.

China's best route to a lower-carbon future will involve reducing coal's three-quarters share of the electricity mix. That will involve a host of factors, including improved insulation, a massive increase in renewables capacity, and more natural gas to meet winter heating needs. But it also ought to involve a bigger share of nuclear to displace coal generation year-round. And there, the country is failing.

Among major energy consumers, only Japan has a smaller share of nuclear generation than China's 2.4 percent, and the figure was north of 10 percent before 2011's Fukushima Daiichi accident shut down most of the country's capacity.

Atomic Dog
Only Japan among major energy consumers has a smaller share of nuclear generation than China
Source: International Energy Agency; Energy Information Administration; RTE France; National Bureau of Statistics of China; U.K. Department of Energy & Climate Change.
Note: All data for 2015 except Russia (2012) and China (2014). Data for France and China show "thermal" power without separating coal and gas; chart figures for "coal" include gas. "Renewables" includes hydro, wind, solar and geothermal but not biofuels and waste.

This pattern is changing rapidly. China, with 35 nuclear plants in operation, has a further 21 under construction and more on the drawing boards, according to the World Nuclear Association. The nation only reached its first 20 gigawatts of generating capacity in 2015; it should add the same amount again by 2020.

Mushrooming
Nuclear power stations under construction will almost double China's output capacity
Source: International Atomic Energy Agency, Bloomberg calculations

Still, that trajectory is a reversal from the more ambitious plans that were in place before Fukushima. China's current 2020 target of 58 gigawatts of nuclear capacity is below the 70 gigawatts to 80 gigawatts forecast before the disaster, and ambitions for generation by 2050 are some 210 gigawatts, or 47 percent, lower.

China's pullback on nuclear installations was probably a good idea, given the well-founded fears about the safety of its first generation of power stations. By continuing to hold off, though, the country is guaranteeing itself a future with a larger share of coal in its winter heating mix.

Anyone trying to breathe Beijing's choking air this month might wonder whether that's the right bargain to be making.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net