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1 Energy Transition: Status and Sustainability

1.1 Energy System Profiles

China’s coal dependence in the energy mix has been eased in the past ten years. In 2019, coal contributed to about 58% of China’s total energy consumption (down from around 70% in 2000), followed by oil (20%), natural gas (8%), hydro power (8%), non-hydro renewables (7%), and nuclear energy (2%) (BP, 2020). China has put considerable efforts into diversifying its energy supplies in recent years, and the trend shows a clear pattern of depending less on coal while developing more shares of renewable energy; in 2011, the primary energy mix was a quite different picture, with 69% of coal, 18% of oil, 4% of gas, 6% of hydro power, 1% of nuclear power, and 1% of non-hydro renewable according to the BP Statistical Review of World Energy (2020). It is evident that non-hydro renewables, particularly wind power and solar energy, have increased their share from 1% to 7% in only eight years. The diversification of the energy system in China is attributed to a range of causes, such as energy security, tackling urban air pollution, and renewable energy technology development.

The enactment of the Renewable Energy Law (National People’s Congress Standing Committee, 2021) in 2006 is the inception of energy transition of China. Effective wind power and solar energy technology dissemination from industrialized countries, the feed-in tariff (FiT), rapid economic growth and increasing energy consumption, colossal manufacturing scale and bases, and booming of renewable energy define the energy transition in the past fifteen years. There is no doubt that climate change is one of the concerns for China in embracing an energy transition strategy. Since the Paris Agreement reached in 2015, China has put climate change mitigation as one of its top priorities in a decarbonizing energy system.

China has quickly become the world leader in renewables investment and development. Energy transition, in the Chinese context, could therefore be seen as the process of transforming the coal-based energy system into a clean, low-carbon energy system. Oil, natural gas, nuclear, and renewable energy are all playing specific roles and positions in the transition process, and their shares in the energy mix may vary during the long transition pathway. China aims to achieve a low-carbon economy by transforming its energy system especially when President Xi made the announcement of carbon neutrality before 2060 at the United Nations General Assembly in September 2020.

China’s coal power development has been in parallel with renewable energy due to the increasingly high energy demand from Chinese industrialization and urbanization. From 2000 to 2013, China’s coal consumption nearly tripled, although a decline, which largely resulted from a government-dominated national campaign of fighting air pollution by limiting the use of coal in some most developed regions, followed after 2013. The air pollution in Beijing and other big metropolitan areas in 2011 and 2012 became a huge both environmental topic and policy issue. The Chinese leadership and the public recognized that the vast health cost of using a coal-dominated energy system had to be addressed in order to pursue healthy economic growth in the long run. An urgent clean air policy was introduced, championed by the Law on Prevention and Control of Atmospheric Pollution and Air Pollution Prevention Action Plan (2013–2017), shedding light on a nationwide “coal cut” campaign. The action plan accelerated the energy transition pace and provided room for the renewables sector to penetrate further.

The energy transition policies remain strong in the 13th Five-Year Energy Development Plan (2021–2025) (National Development and Reform Commission and National Energy Administration, 2016). China would focus on several areas, including: limiting the consumption of fossil fuels; improving energy efficiency; promoting renewables and reforming the electricity system; promoting green manufacturing; raising energy efficiency standards in construction; promoting low-carbon transport; encouraging innovation of low-carbon technologies; strengthening “dual control” of energy (energy consumption and energy intensity); accelerating carbon emissions trading; developing green finance; promoting more environmentally responsible behavior; and so on.

The Belt and Road Initiative (BRI) was launched in 2013, aiming to support China’s economic growth in the long term via various expanded and deeper trading and investing activities in foreign countries. This international strategy had channeled massive investments in infrastructure projects, many of which are relevant to fossil fuel power and transport construction and have significant climate impacts. These economic collaborations may bring growth and alleviate poverty in BRI countries while they could also result in the increase of CO2 emissions, especially as the majority of BRI projects are carbon intensive. According to a research center affiliated with the Central University of Finance and Economics in China, the investment share in the energy and transport sectors under the BRI portfolio ranges from 57% to 73% in 2013–2020 (BRI, 2020–2021).

In 2020, the total energy investments along the BRI were about $20 billion, compared to $40 billion in investments in 2016; the majority of energy investments went into hydropower (35%), followed by coal (27%) and solar (23%) (BRI, 2021). The energy investment portfolio has changed after President Xi’s pledge at the 2021 Leaders’ Climate Summit, namely to prioritize “green” projects in infrastructure, energy, and transportation (GT staff reporters, 2021). Before the UNFCCC Climate Conference in 2021 (COP26), China pledged to stop building and financing overseas coal power projects, which was considered to be a “firehose turn-off” action of international public financing for coal (WRI STATEMENT, 2021). The policy move is attributed to not only China’s growing climate ambition under the Paris Agreement but also the growing cost of coal power financing and the risks of coal becoming a stranded asset.

1.2 Lessons of Energy Transition During 2006–2020

Energy transition in China is a policy-driven process, especially from 2006 through to 2020 that spanned three Five-Year Plan periods. Every five years, energy-related polices were revisited and evaluated, and this process allowed policy makers to adjust their thoughts or propose new policy measures. The interactions of energy, air pollution, and climate policies are complicated. A rational, economically efficient, and socially just energy transition requires an open, long-term, and constructive policy dialogue.

1.2.1 Weathering the Massive Job Loss in the Coal Mining Sector

With the increasing share of renewable energy in the Chinese energy mix, there were several major challenges faced by the fossil fuel industry, especially the coal mining and coal power sectors. The declining demand for coal put huge pressure on local economies in the major coal bases; China’s fourteen large coal mining bases and nine coal electricity bases are mainly located in the north and northwest (Strategic Action Plan, 2014), the less developed regions. Employment loss became a big issue for the local governments. Creating new jobs for the coal workers is crucial to the stability of the local economy and the social welfare of the affected coal communities. It has been especially difficult for the low-skilled labor force in the coal mining industry, as the transition from the previous mining skill-sets to other sectors is challenging.

A significant change of employment in China’s coal sector was the large-scale “personnel diversion” plan in 2015 from the Heilongjiang Coal Group, the biggest of its kind in Northeast China, affecting over 100,000 workers. In early 2016, the State Council released a guidance policy on resolving excess capacity in the coal industry (State Council, 2015a), indicating that the employment issues in the coal sector require a plan at the national level. Indeed, in the following years, provincial government plans for resolving job loss were made and implemented accordingly. Since then, the size of the coal-related working force affected in 2015–2019 is between 1 and 2 million people.

Most of the coal mining and power bases are also the centers of China’s renewable energy development. For those skilled technicians and professionals in the coal power sector, transition to jobs in the renewable energy industries may be relatively smooth. However, for the low-skilled workforce, finding new jobs is challenging. The outcome depends on whether local governments are better prepared for the incoming challenges and are training workers early on through skill promotion centers. Some fast-moving and open-minded governments have attracted new investments of the renewable energy industry as well as providing attractive policies for other non-energy-related businesses such as tourism (Lin et al., 2018). Looking into the “Just Transition” experience in other parts of the world, in the future, China will need more consideration in achieving a dynamic, effective, inclusive energy transition.

1.2.2 The Ups and Downs of Renewable Energy Development in China

The FiT as an essential scheme to support renewable energy was enacted in 2006 after the Renewable Energy Law took effect, and lasted till 2018. This subsidy filled the gap of the cost between renewable and coal power and subsequently brought rapid installations of renewable power plants, which worked very effectively in the early-stage development of the renewable energy industry (Yang et al., 2021). However, as the costs of wind and solar power have been declining rapidly and the renewable energy subsidies increasing exponentially, China’s government has gradually cut the rate of the FiT. A market-oriented auction or bidding mechanism has been introduced to finance new renewable energy projects since 2019.

In reality, the generosity of the subsidy level affects the pace of renewable energy installations. A “boom and bust” cycle can be observed. When a high FiT rate is expected, renewable booms take place and may cause a deficit of the funds used to pay for the FiT (Hove, 2020). When no subsidies are available or payments are delayed for a couple of years, busts appear before another cycle to come.

The logic of the FiT is that this subsidy scheme can nurture a new renewable energy market and be phased out when renewable power becomes competitive in cost compared to coal power. In 2020, wind power (onshore) and solar photovoltaic (PV) became competitive with coal power in terms of levelized cost of electricity (LCOE) (Bloomberg New Energy Finance, 2020). From the years of heavy subsidizing to an era of grid parity, China’s renewable power development has experienced a steep learning curve.

1.2.3 Major Experiences from China’s Energy Transition

China has gained great benefits in policy learning and technology dissemination of wind power and solar PV from European countries, especially Germany and Denmark, since China enacted its first renewable energy law in 2006. China plays a significant role in cutting the renewable technology cost especially wind and solar power, due to its vast industrial scale of manufacturing and cheap labor. Therefore, China’s lessons in supporting renewable energy development may offer a meaningful roadmap for late-comers of pursuing renewable energy development.

1.2.3.1 Co-Benefits of Energy Transition Would Help to Build a Healthy and Low-Carbon Energy System

The policy measures to reduce coal consumption have huge co-benefits in abatement of carbon emission and reduction of other airborne pollutants. The rise of air pollution mitigation-oriented policies in China since the early 2010s influenced energy reform and accelerated the energy transition process by burning less coal, using more natural gas, and raising the renewable power share. The energy transition has brought down the air pollution levels in big cities across the country and massive gains from a public health perspective.

Furthermore, the mitigations of climate change could bring a wide range of co-benefits from the social, economic, and technological perspectives. China’s efforts to combat climate change has set a good example of aligning climate change mitigations with economic growth and public health in the long term. In the future, emphasizing the co-benefits of energy transition will continue to be one of the focuses for climate, air pollution, and health policies in China. China’s experiences can encourage other developing countries to take more positive measures to build a low-carbon, healthy energy system.

1.2.3.2 Subsidy-Driven Policies Boosted the Renewable Energy Industry: Is It Switch-Off Time Now?

Before 2018, China mainly promoted renewable energy through the FiT by supporting renewable power projects through filling the cost gap with coal power. Since 2019, China has gradually been phasing out the subsidy levels according to the market development and technology maturity of renewables. This FiT policy, despite the drawbacks of funds deficit and fluctuating development mode, helped the build-up of China’s fast-growing “new energy” industry in terms of the installed capacity of renewable power plants, the manufacturing capacity of wind turbines and solar PV, as well as related industries such as electric vehicles (EVs). China already has the world’s largest renewable power installations, including wind power, solar PV, EVs, and energy storage capacity.

In 2019, China began to use the subsidy bidding model. The bidding results in 2019 show that PV tariffs have fallen by 30% compared to 2018s, while the 2020 results have fallen further by 20% on a 2019 basis (Cao et al., 2021). The cost of solar PV power generation in most regions is able to compete with new coal-fired power projects. Onshore wind power will soon get close; if the external cost of coal use is taken into account, the real cost of solar and wind power should be already competitive with coal power. These stunning achievements show that renewable power technology is gaining competitiveness in cost compared to fossil fuel power. The shift from the FiT to a market bidding scheme echoes the energy transition moving into a new stage.

1.2.3.3 Could Multi-Party Dialogues Promote a Quicker Energy Transition? Yes, But Not 100% Sure

Establishing the world’s earliest carbon market in 2005, the European Union (EU) is without doubt the leading region in promoting climate action and energy transition. The EU has been supporting China in carbon market pilots and the set-up of China’s national carbon market since 2017. The EU announced the 2050 climate neutrality target in 2019 and was seen as the driving force of the carbon neutrality or net zero emissions plan worldwide, including the one China made in 2020 at the United Nations General Assembly, where President Xi of China announced the goal to reach carbon neutrality by 2060 (Froggatt & Quiggin, 2021). The energy transition in China is considered to move more quickly under this long-term climate target.

As for climate cooperation between China and the United States, a “honeymoon” period was seen after the two countries signed the joint climate declaration in November 2014; specifically, China pledged to peak CO2 emissions around 2030. The bilateral agreement was widely considered as a catalyst to the deals of Paris Agreement in 2015 (Green Policy Platform, 2014). But the China-US cooperation in climate actions was disrupted by the Trump administration, who led the withdrawal of the United States from the Paris Agreement, while China’s commitment was not changed and even became ambitious. These ups and downs of China-US relations in climate and trade had led to the judgment that China might want to take a leading role in climate change. China has been consistent in climate actions despite American presidential changes. Under the new economic, social, and geopolitical context, the climate collaboration of the two biggest carbon emitters in the world has become more uncertain if not vulnerable even though the Biden administration has taken a more engaging approach in the arena. The dynamics of the bilateral negotiations before the COP26 Glasgow exactly illustrated the inconvenient and challenging reality.

While the United States is considering the role of international trading in climate policy, the EU has been advancing the Carbon Border Adjustment Mechanism (CBAM) in the policy-making process. The EU is aiming to use CBAM as a competitive and pressing way to leverage the climate actions of its trade counterparts. However, China thinks the approach is apart from the cooperative mechanisms under the Paris Agreement. The future multi-party policy interactions among the three biggest economies will affect the global pace of decarbonization. The compromised outcomes from the COP26 might imply the future winding journey of climate cooperation among the three parties.

2 Challenges and Opportunities of China’s Energy Transition Under the Carbon Neutrality 2060 Strategy

2.1 Transitional Models: China vs. Germany

Since 2006, China has established an industrial manufacturing foundation and energy policy for seeking energy transition in the long run. China’s energy system has changed significantly during this period of time and the case of renewable energy growth is largely accepted around the world. In fact, China has mobilized a partly successful energy transition with a top-down approach, which indicates the dominant role of government and state-owned energy companies.

Unlike China, Germany’s energy transition follows a different pathway in terms of policy-making institutions and mechanism and citizens’ participation in financing renewable energy projects. Germany’s pioneering and successful legislations under renewables law in 1990 and 2000 are attributed to the dynamics of policy making related to a multi-party political system, general election, policy entrepreneurship, public opinion on climate change mitigation, and competition of various lobbying and interest groups (Stefes, 2016). The German energy transition experience, which harnessed great social, economic, and environmental benefits until the early 2000s, inspired China’s actions in legislation and investment on renewables around 2005. Germany’s experience in energy policy making is based on parliamentary legislation, which has successfully upheld the Renewable Energy Act 2020. This legislative process cannot be reproduced in China due to the difference of political and institutional settings. For result-oriented Chinese policy makers, democratizing a public participating in energy policy making, or energy democracy in Europe’s and the U.S.’s experiences, has never been considered. A survey shows that the public awareness of climate change impacts, climate policy, and citizens’ responsibilities for carbon emissions reduction is evident and the general public overwhelmingly support what the Chinese government has done in addressing climate change (Wang et al., 2017). There had been concerns among the Chinese public that taking a lead in international climate governance and actions may constrain China’s economic growth. China’s commitment to carbon neutrality by 2060 has largely marginalized that view because the pledge was from the top leadership. Public opinion plays a very limited role in China’s climate and energy transition policy making. China’s renewable energy policy making was mostly confined to a small circle of governmental agencies, government-affiliated think tanks, and leading companies in the field.

The other important lesson from Germany’s energy transition is how energy cooperatives have financed a vast number of renewable energy projects, particularly wind farms and solar PV plants. In 2016, the total installed renewable power capacity in Germany was 100.3 GWel, of which private persons and farmers owned 42% (Wettengel, 2018). In other words, private citizens are playing a central role during the progress of Germany’s energy transition. Contrarily, a study (IEA, 2018) suggests that, in terms of ownership of undertakings (%) in the power sector, state-owned companies play a dominant role in China’s power sector, from nuclear (100%) and power supply (95%) to wind power (78%) and thermal power (66%) in 2015. Private holdings play significant part only in solar power (44%) and hydropower (34%). Collective holdings only play a marginal role in the power sector ownership breakdown, from the highest in hydropower (6%) to the lowest in solar (1%). There is huge potential to attract private investments into renewable power development in order to finance energy transition in the long term.

Since 2015, China has entered into a new round of power sector reforms focused on market-oriented electricity pricing (State Council, 2015b). The reform aims to improve the economic efficiency of the power system and provides bigger space for renewable energy development. This strategic reform also plays a role in addressing climate change and protecting the environment and public health. However, this round of power sector reforms has not demonstrated significant results so far due to the gap between the reform plan and its implementation, as well as the underdevelopment of market-based trading and pricing mechanisms (Alva & Li, 2018).

In the near future, there is low possibility that China will empower energy transition by opening political participation in decision making. But the ongoing power sector reform has the potential to make the sector more efficient, less carbon intensive, and more open to private and international investors. As China has set up a long-term climate policy target, structural changes in all social and economic sectors have to take place in order to transform the economic development model into a new model, in which economic activities are powered by zero- or low-carbon-emission energy resources. Obviously, it has become a very urgent issue to seek a much bigger scale of financial resources to sustain the energy transition towards 2060.

2.2 Where Is the Money Coming From?

The biggest challenge in energy transition facing China is how to raise sufficient investments in the decades to come. According to a study by the Institute of Climate Change and Sustainable Development at Tsinghua University, to meet the global 1.5-degree scenario by 2050, China’s total primary energy consumption will be 5 billion TCE (tons of coal equivalent), with non-fossil fuels accounting for 85% and coal for less than 5%. In this scenario, the accumulated investment in the energy system from 2020 to 2050 is 138 trillion Chinese yuan; under the 2.0-degree scenario, the accumulated investment is 100 trillion Chinese yuan (Liu, 2020).

Apart from decarbonization of the power sector, the electrification of energy uses in the building, industry, and transportation sectors is the pathway of energy transition. The technologies of hydrogen and carbon capture, utilization and storage (CCUS) may play a supporting role in realizing carbon neutrality across the economy, especially in the industry sector. The future energy investment will largely focus on the power sector, including more distributed renewable power, and smart power grid. As shown in Table 1, there is a big gap in power sector annual investment between what has been accomplished and what must be done.

Table 1 Power sector investment and share of GDP, 2011–2020 (Unit: billion Chinese yuan)
Full size table

There are two methods to raise the funding. Firstly, based on German energy cooperatives model, the Chinese government may create a friendly policy and financial mechanism to encourage citizens’ investments in distributed or decentralized renewable energy projects. Secondly, the power sector reform has to secure a fully functioning market-based trading and pricing power system. In addition, policy makers have to put carbon emission as a fundamental factor in the formation of the electricity tariff. Furthermore, Chinese consumers must pay higher electricity bills in the near and medium term in order to finance the mainstreaming of renewable energy including the power infrastructure to accommodate a higher ratio of renewables. In the long term, energy users may pay less in the middle of this century than in 2020 thanks to the renewable energy-dominated system.

2.3 “Just Transition” for China’s Energy System: Social Engagement and Workforce Livelihood of the Fossil Fuel Sector

“Just Transition,” focusing on developing greater clean power capacity in the energy systems while providing livelihood alternatives for the workforce of the coal power and coal mining sectors (Australian Council of Trade Union, 2016), has been a great and obvious challenge for China. China began to shut down the outdated, small, and inefficient coal mines since 2016, enacting a three-year ban on new coal mine projects, closing more than 4000 coal mines (Wang et al., 2016), and relocating around a sixth of the workforce employed in the coal industry (National Bureau of Statistics of China, 2015). China’s energy transition, however, is very different from those of developed countries. Firstly, the Chinese coal industry is largely dominated by state-owned corporations. Secondly, the successful “Just Transition” cases in developed countries tend to be on a smaller scale and in longer process (Rock Environment and Energy Institute, 2017). Thus, it will be a rather complicated and difficult task for China to pursue a “Just” approach that can be scaled up and achieved over a relatively short time period.

China’s employment diversion plan for the over-capacity coal sector started from 2016; financial aid, entrepreneur funds, and retraining programs were provided as diversion measures for the affected coal workers. For instance, according to different age groups, retraining is suitable for younger workers, while for those at 50 years old or above, early retirement arrangements were offered to alleviate the risk of unemployment.

Also, there are regional differences in the implementation of the resettlement policies. For example, some coal production bases in the eastern coastal areas have small production scales, and the local economy is relatively developed with a high proportion of tertiary industry, making it easier for those coal sector-related workers to seek alternative jobs. However, for some resource-based cities in the north, northwest, and northeast of China, due to a less diverse and dynamic industrial and economic structure, it is difficult to shift jobs, which could be the instability factor of mass protests (Natural Resource Defense Council, 2017).

Some “Just Transition” measures could be implemented for retraining coal workers, especially those who have just started their careers. New public programs such as eco-restoration requiring the set of skills that those coal workers already have could receive funding from a tax on pollution and carbon emissions (He et al., 2020). To maintain fairness to the coal workers, financial support should be given to workers directly or through third-party organizations.

In the long run, the transition in China could be more challenging. On the one hand, carbon peaking before 2030 and carbon neutrality by 2060 may generate urgency for policy makers to take more ambitious measures to phase out coal sooner. In the U.S.-China joint climate agreement to cut emissions during the COP26 Glasgow, China plans to phase down coal consumption from 2026 onwards (“China and the U.S.,” 2021a), which was actually stated first in China’s energy sector Five-Year-Plan (2021–2026). This new bilateral effort may speed up China’s actions in reducing coal reliance. On the other hand, the nation-wide power outages due to energy supply disruptive episodes in summer and autumn 2021 forced the policy makers to add more coal into the energy system to avoid a worse scenario in the winter of 2021 (“China Hurries to Burn More Coal,” 2021b). Looking ahead to 2025, China’s energy and climate policy makers may continuously face the dilemma of how to strike a balance between securing energy supply in the short term and achieving climate goals in the long term. A study on China’s energy sector net zero roadmap by the International Energy Agency (IEA) suggests that China is capable of peaking its carbon emissions by 2025 largely by decreasing its coal use faster (IEA, 2021). The IEA’s scenario on China is crucial for the global 1.5 degrees Celsius climate goal. To make this happen, it is more significant to ensure a “Just Energy” transition.

2.4 Best Practices at the Local Level (Hangzhou): Peer Pressure to Stimulate More Actions

Hangzhou, the capital city of Zhejiang Province on the eastern coast of China, is a rather developed city famous for its IT and manufacturing sectors. The demand for energy has been increasing in the past decade, but the annual energy intensity reduction was around 4.5%, and annual reduction of coal consumption around 870,000 tons during the 13th Five-Year Plan (2016–2020). There are some practices that Hangzhou can share with other Chinese cities, especially for energy efficiency improvement and the development of a new energy vehicles industry.

According to the research on Hangzhou’s performance of the energy policy design, Hangzhou’s energy efficiency policy measures are more mature and comprehensive than renewable energy; also, there is increasing evidence to show that Hangzhou is clearly shifting away from command-and-control to more market-based instruments (Guan & Delman, 2019). The energy efficiency improvement measures, from demand-side management, mainly include the re-structuring of industries, for example, to allocate the energy quota for tertiary industries by shutting down highly energy-intensive industries such as the pulp and paper industry, printing industry, and leather manufacturing industry. From the energy regulation side, Hangzhou has a good policy design and strong enforcement power, mainly through the energy quota system, process control, and energy auditing of enterprises. In the future, the focus of energy conservation in Hangzhou will shift from the industrial sector to the whole society, tapping more energy-saving potential of the building and transportation sectors.

Regarding the transportation sector, from 2016 to 2020, Hangzhou attracted the investment of more than 40 billion yuan in the new energy vehicles industry, including EV manufacturing, charging piles, batteries, and others (“Inventory of key construction projects,” 2017). These developments in EVs are in line with the Hangzhou 2022 Asian Games; the major facilities for the Games are located in Xiaoshan district, which released the ambitious goal of achieving “zero emission” for transportation through using renewable energy-powered EVs and hydrogen fuel cell vehicles.

In terms of renewable energy development, although Hangzhou has limited space to develop solar PV or wind power, Zhejiang Province as a whole is moving forward quickly. By the end of 2020, the number of provincial grid-connected decentralized PV projects exceeded 230,000, with a total capacity of over 10 GW (“Zhejiang’s economy is in good shape,” 2021).

3 Conclusion

China’s energy system is transitioning from being heavily coal dependent to being renewable energy driven. The strategy was endorsed by the central government in mid-March 2021 (“Xi Jinping pushes,” 2021). The evidence in the past decade shows that non-hydro renewables, particularly wind power and solar energy, has increased its share by over six-fold, and coal’s share in the primary energy mix dropped from around 70% in 2000 to less than 60% in 2019. The transition was initiated by climate policies focusing on providing incentives to renewable energy development, and then supplemented by clean air policies and actions. State-owned energy groups are the backbone of the transition, as they have contributed to the large-scale solar PV and wind power development. Under China’s unique political economy, the command-and-control mode of energy policy proved effective in China’s energy transition process. Renewable energy manufacturing, energy efficiency services, the downstream electric vehicles, and power storage industries are subsequently nurtured. However, China’s energy transition still faces a variety of challenges such as financial resources, livelihood of work in the coal and other fossil fuel industries, and limited room for public participation in policy making.

Germany’s energy transition has inspired China’s early actions in legislation and investment in renewables power. Despite less public involvement and more state-financed renewable projects, China has produced remarkable outcomes in terms of the renewable energy installation and manufacturing capacity. The development model of China’s energy system under the long-term carbon neutrality goal will take shape soon while a massive number of opportunities are seen in the energy transition process. Other challenges are also obvious such as the financing mode of the transition, the coal phase-out process, and power market reform. Even though public participation in Chinese energy transition remains limited, more market-based electricity pricing resulting from the ongoing power sector reform will create some opportunities for private business and individuals to become more involved. Some leading cities and regions in China have moved forward at a quicker pace. Local open-mind governmental agencies, active business sectors, and the more responsible public may stimulate China’s energy transition in the decades to come.