Editor's note: The article is part of  CGTN's series called "A New Vision for China's Economic Future," in which global economists and eminent academics share their personal views and insights on China's economic development. You Yi is the director of the Management Committee of Hainan Green Finance Institute. The article reflects the author's opinions and not necessarily the views of CGTN.

The goal of "dual carbon" is not only a solemn commitment made by China to the world, but also a strategic choice to adopt green initiatives, seize development opportunities, and remain competitive. Energy activities are the main source of carbon emissions, and the realization of the "dual carbon" goal cannot be separated from the green and low-carbon development of energy. Therefore, conforming to the requirements of the times, seizing development opportunities, and making ecological conservation a priority, green and low-carbon high-quality development will be the only way to achieve the "dual carbon" goal.

Energy is the fundamental driving force for the realization of "dual carbon"

Carbon peak and carbon neutrality are the political consensus of the global response to climate change. Achieving carbon peak and carbon neutrality is a major strategic decision made by the CPC Central Committee with Xi Jinping at its core. It aligns with the sustainable development of the Chinese nation and the building of a community with a shared future for mankind. In 2020, President Xi Jinping formally proposed China's strategic goal of reaching peak carbon use by 2030 and becoming carbon neutral by 2060. Overall, the gap from peak to net zero emissions in China is only 30 years, compared to the 70-year span of European countries, making the challenge greater.

The core of "dual carbon" is to reduce carbon emissions. The natural carbon balance in nature is in the cycle between organisms and the atmosphere, the exchange between the atmosphere and the ocean, and the formation and decomposition of carbon-containing salts, the carbon involved in the reaction and the carbon in the generated products remain equal. This state of equilibrium can be regulated by natural carbon cycle processes, so that the level of carbon on Earth remains relatively stable. However, the carbon balance has been disrupted by greenhouse gas emissions caused by human activities. These emissions come from industry, transportation, agriculture and other fields, and they accumulate in the atmosphere, causing the Earth's temperature to rise, which causes environmental problems such as global warming.

The energy sector is the main source of carbon emissions, and it should be the first to shoulder responsibility for emission reduction. Globally, the electrical and thermal sector, the industrial sector, and the transportation sector are the main sources of carbon emissions. According to the International Energy Agency (IEA), China's power and heat sector accounts for the highest share of its carbon emissions, reaching 51 percent, followed by the industrial sector with 28 percent, the transportation sector with 10 percent and the construction sector with 4 percent. The electric heating sectors in developed economies such as the United States, Europe and Japan are also major sources of carbon emissions, the difference is that the carbon emission proportions of their industrial sectors are lower, and their transportation sectors account for higher proportions.

The source of carbon emissions determines the path of carbon reduction under the carbon neutral goal. The decarbonization of the power sector is a key area of carbon neutrality, and the development of clean energy is also the basis for the green and low-carbon development of the industrial and transport sectors. According to the analysis of the International Renewable Energy Agency (IRENA), there are six main technical paths to achieve the goal of near-zero carbon dioxide emissions around 2050: Renewable energy, energy conservation and efficiency, end-consumption electrification, hydrogen, CCUS, BECCS and other carbon removal initiatives, which contribute 25 percent, 25 percent, 20 percent, 10 percent, 6 percent and 14 percent respectively to global carbon neutrality.

The main characteristics of China's current energy development

The construction of a modern energy system is an inherent requirement for ensuring national energy security and is also an important support for promoting high-quality development. In the past decade, China has built a diversified and clean energy supply system, and its energy independent security capacity has always been above 80 percent. With an average annual energy consumption growth rate of 3 percent, the annual economic growth rate of 6.6 percent has been supported, and the energy consumption intensity has decreased by 26.4 percent, exploring a Chinese energy development path that gives priority to ecology, green and low-carbon.

In 2022, China's new installed capacity of wind power and photovoltaic power generation exceeded 120 million kilowatts, reaching 125 million kilowatts, and exceeded 100 million kilowatts for three consecutive years, hitting a new record high. Annual renewable energy installed capacity of 152 million kilowatts, accounting for 76.2 percent of the country's new power generation capacity, has become the main body of China's new power installed capacity. Renewable energy generation reached 2.7 trillion kWh, accounting for 31.6 percent of the total electricity consumption in society, an increase of 1.7 percentage points over 2021, and renewable energy is playing an increasingly obvious role in ensuring energy supply.

In recent years, the adjustment process of China's energy consumption structure has been accelerating, the mode of energy use has been constantly reformed, and the clean and efficient use of energy has achieved remarkable results. The growth rate of energy consumption has slowed and is significantly lower than the growth rate of GDP, indicating that China's total energy consumption control has achieved obvious results, and it is in a stage of high-quality and stable economic development supported by low energy consumption growth. The mix of consumption varieties has improved, the proportion of coal has continued to decrease, and the proportion of clean energy consumption in total energy consumption has risen from 13 percent in 2011 to 24.3 percent in 2020. The energy consumption structure is developing in a clean, efficient and low-carbon direction.

According to the "China Mineral Resources Report 2022" released by the Ministry of Natural Resources, the proportion of coal consumption in total primary energy consumption in 2021 was 56.0 percent; oil accounted for 18.5 percent; natural gas 8.9 percent; and non-fossil energy such as hydropower, nuclear power and wind power 16.6 percent. Compared with 10 years ago, the proportion of coal consumption in energy consumption has dropped by 14.2 percentage points. The share of non-fossil energy such as hydropower, nuclear power and wind power increased by 8.2 percentage points. This fully demonstrates the continuous improvement of China's energy consumption structure.

The 14th Five-Year Plan for China's National Economic and Social Development and the Outline of the 2035 Vision Goals specifically make important arrangements for "accelerating digital development and building a digital China." The energy industry is actively embracing the trend of digital development, taking advantage of new opportunities of the energy technology revolution, and accelerating digitalization and intelligent development as an important engine for improving the quality and efficiency of the whole industry and achieving the goal of "dual carbon".

This digital drive is making energy production more efficient and intelligent. For example, the National Energy Group compiled and issued the "National Energy Group Digital Transformation Strategy" to promote the construction of intelligent mines, intelligent power stations, intelligent transportation and intelligent chemicals in an all-round way, achieve unmanned production, and effectively improve safety levels. In the energy transmission sector, digital transformation enables the construction of new power systems to be safer and more reliable. It is also being used to predict the fluctuation of new energy, and coordinate the load and storage resources of the source network, to achieve high-quality and reliable supply of electric energy and the safe and stable operation of the power grid. In terms of energy consumption, the concept of digital green sharing production and life is more deeply rooted in people's hearts. More and more households are starting to use new energy electric vehicles and rooftop photovoltaic panels.

Promoting low-carbon energy transformation thinking

In 2022, the National Development and Reform Commission and the National Energy Administration jointly issued the 14th Five-Year Plan for Modern Energy Systems, drawing a roadmap for China's energy transformation during the 14th Five-Year Plan period to comprehensively promote large-scale development and high-quality development of wind and solar power generation, develop hydropower in accordance with local conditions, and ensure the installed capacity of conventional hydropower reaches about 380 million kilowatts by 2025. Nuclear power will be actively developed in a safe and orderly manner, and by 2025, the installed capacity of nuclear power in operation will reach about 70 million kilowatts. In addition, the evolution of the power system will be adapted to accommodate large-scale and high-proportion new energy.

At present, the profound adjustment of the global energy governance system and the increasing volatility of the international energy market have had a major impact on the supply and prices of global oil, natural gas and coal. Faced with the complicated external situation, China should continue to optimize its energy transition roadmap based on the new changes in the global energy transition situation and the new achievements of China's energy transition and build an energy production and consumption system dominated by a near-zero emission power system.

President Xi Jinping pointed out: "Efforts should be made to plan and build a new energy supply and consumption system based on large wind power bases, supported by clean, efficient and advanced energy-saving coal power, and stable, safe and reliable UHV transmission and transformation lines as the carrier." China's wind power, photovoltaic and other new energy is intermittent and volatile, so the safe and stable operation of the power system faces certain challenges.

On the one hand, we should further promote the energy revolution, accelerate the planning and construction of new energy systems, strive to expand the scale of new energy development and utilization, and continue to promote the transformation and upgrading of energy production and supply structure. On the other hand, it is also necessary to steadily promote the participation of new energy in the market trading mechanism, coordinate the promotion of green electricity trading and green certificate trading and other powerful measures, and promote the construction of new energy supply and consumption systems from the policy, technology, mechanism and other links.

At present, China's resource endowment of "rich coal, poor oil and little gas" determines that the degree of dependence on coal is difficult to change in the short term. Therefore, while there may be a large-scale increase in wind power, photovoltaic and other new energy sources, it is still necessary to maintain coal power supply, safety and regulation. This is also the internal demand of the current new energy system and new power system. Coordinating the development of coal supply and carbon reduction, and strengthening the clean and efficient use of coal is an inevitable choice to balance energy transformation and energy security.

The realization of the "dual carbon" goal will not be achieved overnight, so when new energy cannot safely and reliably replace fossil fuels, it is still necessary to develop systems based on resource endowment. According to the report of the 20th National Congress of the Communist Party of China, the clean and efficient use of coal needs to be strengthened, which means that the work in the four fields of green mining, efficient power generation, clean transformation and pollution control needs to be continuously promoted. In addition, China's dependence on foreign countries for oil and gas is at a high level, and domestic oil and gas development has been insufficient in the past. The report of the 20th National Congress of the Communist Party of China proposed that in order to increase the exploration and development of oil and gas resources and increase storage and production, it is necessary to speed up "making up for weaknesses." Especially in the context of geopolitical tensions, at present and for a period of time, only the clean use of coal and the increase of domestic oil and gas reserves can strengthen the cornerstone of China's energy security.

To ensure reliable and stable energy supply, it will be necessary to improve energy resource allocation capacity, improve construction of energy infrastructure such as power grids and oil and gas pipelines, especially the construction of trans-provincial and trans-regional transmission channels for power and oil and gas, enhance the adjustment capacity of the power system, and improve the energy reserve emergency system.

The construction of trans-provincial and trans-regional transmission channels for electricity and oil and gas is crucial to ensure energy supply. According to the 14th Five-Year Plan Modern Energy System Planning, during the 14th Five-Year Plan period (2021-2025), China should steadily promote the power transmission of resource-rich areas, accelerate the production of supporting power supplies for the built channels, and focus on the construction of transmission channels for clean energy bases. Construction of long-distance pipelines for crude oil and refined oil products will be improved, the supply of crude oil to refineries in the eastern coastal areas optimized, the layout of refined oil pipelines improved, and the proportion of pipeline transportation of refined oil products increased. The speed of construction of long-distance natural gas pipelines and regional natural gas pipelines will be increased, the interconnection of pipeline networks promoted, and the LNG storage and transportation system improved.