While everyone was busy freaking out about the Trump tariffs, China released a new list of its major low-carbon demo projects for 2025

This is Batch 2 - the first batch was announced last year.

All of them are important and ground-breaking projects...101 of them in total.🧵 Remember, the title of National Demonstration Project is a powerful designation with many practical benefits to project owners, including direct financial and fiscal support, policy and approval advantages, increased access to technology and talent resources, prioritization in government procurement events, and long-term institutional backing from local authorities (for example, being written into the province's five-year plan).

This list of projects is basically a direct summary of what national energy stakeholders think are the most important cutting-edge items in furthering the national low-carbon energy agenda, and a promise to support those projects to achieve success.

When they teach about the rise of China in textbooks someday, I hope there's at least a section about how USA institutions psy-opped themselves into utter helplessness by meticulously sourcing all their primary insights from copium vendors. This could be a thesis. No need to actually write the thesis yourself though; DeepSeek's got it covered.

"Institutionalized Copium Networks" I'm gonna borrow that one for the future.

I found the thesis of this article peculiar and the intention flawed.

The authors are so alarmed over the potential for China's policies on climate being mislabeled as virtuous that they felt the need to pen an article to refute this view...why? 🧵

foreignpolicy.com/2025/03/20/chi… It’s not even a stretch or oversimplification to characterize the thesis as: “China not good; actually, China bad”.

This makes for tedious reading, as it is an article focused exclusively on the litigation of China’s morality re: climate issues.

There is no attempt to rationalize or contextualize...no effort to examine the nature of, or motivation behind the “sins”, or a consideration what precedent is set by treating fossil-fuel driven energy expansion as such an explicitly moral issue.

One thing I haven't seen discusssed yet is how new wind and solar capacity additions in China in 2025 are almost definitely going DROP vs last year.

If you're used to always seeing number go up, time to reset expectations in advance. Here's why.🧵

https://x.com/pretentiouswhat/status/1897600484761887230

The key driver is the new renewables compensation scheme from last month.

Previously, new wind and solar projects had policy assurances their generation would be bought by the grid at a fixed rate (the provincial coal-fired benchmark price). The new policy removed that.

China Power Sector 2024 Fundamentals Summary/Teaser:

Capacity:

Total installed capacity hit ~3350 GW, pumped up by high volumes of new solar (+277 GW in 2024) and wind (+80 GW).

Coal capacity rose by about 35 GW, hydro by about 14 GW, gas by 10 GW, and nuclear by about 3 GW. Generation:

Generation rose by roughly 600 TWh YoY, crossing the 10 petawatt hour threshold.

The large new additions of solar capacity translated to 44% YoY generation growth. Wind's performance was less impressive, rising just 13% YoY. Hydropower recovered 10% versus its poor performance in 2023, but was still down versus a "normal" year (e.g., hydropower's operating hours in 2024 were still 9% lower than in 2021).

Thermal power generation ticked up 1.7% YoY, thanks to subpar hydropower performance and the suspicious disappearance of solar and wind generation at the end of the year (especially November). It *should* have been possible to keep thermal power generation flat last year, considering the massive growth in renewables capacity and the weak power consumption growth at the end of the year, but it didn't happen. Disappointed I am.

I haven't been able to confirm this, but my suspicion is grid operators found themselves overcontracted for power in the last few months of the year because of the weak consumption growth and high renewables growth, and so chose to break their renewables offtake contracts (and pay the associated penalties) in favor of the thermal power contracts (which were perhaps more expensive to break). Just a guess though.

First, I'd like to say a big thanks to Chris for having me on the pod - it was a great conversation and we only got through about half of the things we'd like to discuss, so maybe they'll be a continuation someday.

That being said, I'd like to supplement a few points here. 😁

https://twitter.com/Dr_Keefer/status/1884340433070833687

I think there are more motivations underlying China's electricity-heavy growth, rather than just concern over vulnerabilities in the Straits of Malacca, although when it comes to the energy security driver, this is certainly a part of the equation...

I'll highlight a few.

Green hydrogen is China's next overnight game-changer greentech segment.

I slept on it for a long time, because the applications for hydrogen-to-power are very underwhelming, but turns out the real big deal is things like green methanol and ammonia. 🧵
maersk.com/news/articles/… We don't have to speculate too hard about how much economic sense these technologies make, if major multinationals are already making such huge bets.

A fleet of methanol-burning vessels means long-term, stable demand for the output of these projects.

fuelcellsworks.com/2024/11/11/gre…

USA Taxicab Chronicles 1:

It’s 6am and I’m in a Lyft en route to Dulles airport in Washington DC. I’m bleary-eyed and drowsy, but my driver seems chipper. He hops out of the vehicle to help me load luggage, a spring in his step.

Clearly a morning person. That makes one of us.🧵 My driver is about my age. He looks Chinese, and the app says his name is Tong, but he doesn’t sound Chinese. He speaks with the soft tones and elongated vowels of someone from SEA…perhaps Thailand.

“Hello sir, good morning, sir. Dulles Airport…which terminal please?”

On the morning of November 28, China's newest nuclear power plant, a Hualong One reactor at Zhangzhou in Fujian, connected to the grid just just 61 months after construction.

How does China build these so fast? Let's review the timeline. 🧵 The first thing to know about Zhangzhou NPP is it's NOT a new reactor. Actually this thing has been planned for AGES.

The first mention I can find of it goes back to 2007, when Guodian (one of the plant owners) set up a Project Office in Zhangzhou.

We learn from this very early notice that the site plans to use AP1000 reactors imported from Westinghouse. Keep in mind, the Westinghouse AP1000 export deal had basically JUST been signed at this point. The first unit at Sanmen wasn't even under construction yet. This was a wild time...there were dozens of AP1000s sites all across China being planned all at once.

sxb.nea.gov.cn/dtyw/hyxx/2023…

Hugely important development here. China's Southern Grid region (Guangdong, Guangxi, Guizhou, Yunnan, Hainan) is the pilot region for China's unified cross-provincial grid reform.

The deadline to get this cross-provincial spot market to full commercial operations is 2025.

https://twitter.com/YanQinyq/status/1863144408041902268

When the Southern Grid is unified, all of those five provinces will in be the same system, with pricing reflecting real-time supply and demand conditions system-wide.

In theory, an abundance of power in one province could be immediately reflected in lower pices in another.

"No one mentions this" because it's not relevant. Chinese landholders hold a good deal of power to hold up infrastucture projects and have, MANY times before.

Indeed, national SOEs like China Railway are perhaps the MOST vulnerable to having their plans "derailed" this way.

https://twitter.com/OrangeJuiceTN/status/1858994308852109788

This is because national SOEs building e.g., highways or railways are the most obligated to do things by the book. The "book" here means the seminal 2007 Property Law, which specified and codified individual property rights in one place for the first time.
en.wikipedia.org/wiki/Property_…

⚡️October 2024 China Power Consumption Update

Chinese power consumption for October 2024 hit 774 TWh, up 4.3% against a high base from October 2023.

Healthy consumption growth in services and residential was balanced out by anemic growth in the industrial sector. 🧵 Secondary industry was up an underwhelming 2.7% YoY. This is the lowest YoY growth I've seen since I started tracking this dataset last year.

This is now the fifth month in a row where industrial power demand growth has been been bad, and also the weakest so far.

Unfortunately, this Bloomberg piece about the relationship between renewables and power markets in China gets the story exactly backwards.

Power markets are not a "lifeline" for renewable generators in China; actually they're a major challenge and a huge threat to revenue. 🧵

https://twitter.com/economics/status/1856897734189748305

Solar project operators especially want nothing to do with shot-term power markets, and hope to delay the day when they are exposed to them for as long as possible.

Under their current power sales scheme, they enjoy guaranteed dispatch at a fixed rate (grid company buys).

China Taxicab Chronicles: Mr. Jia, Shanghai Success Story

I hop into Mr. Jia's taxi on my way to Pudong for a meeting. It's raining, so I widen my vehicle search on the ride hailing app to include taxis, which I don't usually do. I haven't been in a taxi in a long time... Mr. Jia is in his 50s, with a neat haircut and a tidy jacket. He doesn't look like a migrant worker from some inland province, busting his ass for 15 hours a day to cobble together cash to go home and buy a house. He looks local. So I ask.

"Hey shifu, where are you from?"

A little thread about industrial power policy:

In many Asian countries, industrial power prices are not reflective of average generation costs because of cross-subsidies (e.g., residential sector paying slightly more for power to ensure industrial tariffs remain low).

https://twitter.com/TomMcTague/status/1854617406116970644

Industrial power prices aren't random; they reflect a combination of economic forces like fuel costs (which you have less control over, although you can moderate your exposure to with planning) and policy choices like subsidies (which you have full control over).

The Secret Tibetan Cultural Museum - My Home Tour

After finishing our yak hot pot, we we escorted by Boss Liu to his stately mansion next to our guesthouse, hopefully to be impressed and amazed by beautiful decor.

But I was not prepared for how hard he delivered! 🧵 It turns out, Boss Liu has turned his huge personal home into a veritable museum, a monument to Tibetan art, culture, and craftmanship.

Not a single square centimeter of wall or ceiling space has been wasted. I hardly knew where to look, because everything was so interesting.

"Hey, American! Come take pictures of this. See how our women pick potatoes!"

At 8am the morning after checking into my Tibetan guesthouse in Jiuzhaigou, I decided to explore the dirt path up the mountain behind the village - the route to the old hamlet I'd heard about. It was breezy, and the sky was blue with wispy white clouds. The air still held a touch of last night's coolness, which yielded as the sun rose higher and lit up golden corn in the fields.

I cannot imagine or describe a more perfect late summer/early autumn morning.

What's up with Chinese cities having "Tiers"? What does it mean when we say "1st-tier, 3rd-tier, etc"

We reference these tiers pretty often with the assumption that everyone knows what they mean, but I think it's worth explaining more fully. 🧵 First off, the tier system is not an official ranking from the Chinese government.

The most commonly-used system is the one from financial magazine Yicai Global, issued annually since 2016.

It's like US News and World Report's college rankings - unofficial but influential.

A nice conversation with a young Tibetan guy at my guesthouse about maintaining cultural identity in Jiuzhaigou County, Sichuan.

In Jiuzhaigou, we decided to stay in a family-owned guesthouse a few km away from the scenic area. It was less convenient, but worth it for a quieter stay. On my first evening, I relaxed in the lobby and chatted to the front desk attendant, a young Tibetan guy (late 20s) who was usually reclined behind the desk, playing on his phone.

I noticed a rack of outfits by the desk.

“Hey..these Tibetan costumes…do you rent them out?”

I recommend anyone outside of China seeking to better grasp this concept to watch a recent Chinese TV drama called "Like a Flowing River" (大江大河).

It follows the story of three very different men making their fortunes in the "New China" of the 1980s and 90s. 🧵

https://twitter.com/GlennLuk/status/1838626458555551816

One is a new college graduate who becomes an employee at a SOE chemical plant, one becomes the quintessential hustler/private entrepreneur, and one is a former PLA soldier appointed party secretary of his hometown village.

They each reflect a real aspect of China in the 80s.

China's National Bureau of Statistics (NBS) heard us talking about common prosperity and issued a big new statistics report on it. It's called:

"People's Lives are now Moderately Prosperous, Proceeding Steadily Towards Common Prosperity"

I pulled out some highlights.🧵 On income growth and the rural/urban income gasp over the last decade:

"In 2023, the per capita disposable income of the population increased to 39,218 yuan, a real increase of 94.4% since 2012, after accounting for price factors. This represents 6.2% average annual real growth from 2013-2023."

The per capita disposable income of urban residents was 51,821 CNY, 75.4% higher than in 2012, with an annual average real growth rate of 5.2%, while the per capita disposable income of rural residents was 21,691 CNY, 111.4% higher than in 2012, with an average annual real growth rate of 7.0%.

In 2023, the ratio of disposable income per capita between urban and rural incomes was 2.39:1, down from 2.88:1 in 2012."