China and the United States have agreed to a three-month trade truce with major tariff cuts. This deal eased market fears, helped oil prices rise, and eased worries about global economic slowdown—at least for now. However, climate activists worry that China’s industry will grow again, increasing power demand from coal and gas and reducing wind and solar’s share of electricity.
The trade deal was announced on Monday. By Wednesday, container ship bookings from China to the U.S. jumped 277%, showing how the agreement quickly boosted trade between the two largest economies. More trade means more manufacturing, which leads to higher power demand, mostly met by steady sources like coal, gas, and nuclear power.
In the first quarter of this year, wind and solar accounted for a record 39% of China’s power supply, according to data from the climate think tank Ember. This was an 18% rise from the same period last year. But this increase happened because manufacturing activity was low, which is expected to change now. Data showed that China’s coal and gas power generation dropped slightly in the first quarter, helped by more hydropower and renewables. Electricity demand fell 1.3% in January and February but rose 1.8% in March, according to China’s National Bureau of Statistics.
With the trade deal boosting manufacturing, demand for reliable, on-demand power from coal, gas, and nuclear will rise. China’s wind and solar capacity now exceeds its coal and gas capacity, standing at 1,482 gigawatts, over 50% of total installed power. But wind and solar only generated 22.5% of electricity in the first quarter. Experts point to grid issues, but the main reason is that coal and gas provide steady power whenever it is needed.
This means coal and gas use will likely increase again, hurting climate goals. Ember analysts say China is shifting toward low-carbon energy, with coal’s share dropping from 80% in the mid-2000s to 54.8% last year. They expect wind and solar to meet all new electricity demand in the next five years, with coal steadily declining. But they may have overlooked how manufacturing depends on cheap, reliable power from fossil fuels and nuclear plants.
China is approaching its peak electricity demand season, usually in summer. This year, the peak will coincide with growing manufacturing, likely boosting coal and gas use. This trend challenges hopes for a future powered fully by wind and solar energy.
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