Electric vehicle boom may force China to burn more dirty coal

MELBOURNE: Expanding coal-fired power is China’s “only real option in the short term” to meet rising electricity demand, including from new energy vehicles, according to ANZ Group.

“Power shortages are likely to reemerge as the acceleration in the energy transition continues to put pressure on electricity networks,” analysts Daniel Hynes and Soni Kumari said in a report today.

China’s power market is already showing signs of strain as extremely low water levels sap hydropower generation in southern provinces.

As climate change delivers more frequent and persistent heat waves, the region’s reliance on hydro — China’s largest source of clean energy — is being called into question.

The government’s response has included raising domestic production and imports of coal, its mainstay fuel.

At the same time, electric vehicles, ostensibly a solution to the climate crisis, are emerging as a pressure point on the grid.

The world’s passenger EV fleet is set to displace as much as 600,000 barrels a day of fossil fuel demand this year, ANZ said.

China, which leads global growth in EV sales, accounts for as much as 60% of that displacement, according to the bank.

“Most of that switch would see additional demand for coal-fired power output,” ANZ said.

Scorching temperatures are roasting Asia this week, stretching the region’s power grids and raising health risks as the chances of more extreme events later in the year increase.