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Three Energy Gamechangers for China and the World
Part 1: A Focus on Oil-Free Mobility
This decade China is set to regain the status it has held for 18 of the past 20 centuries: the world’s largest economy. A major engine of historic success was China’s inexorable drive to develop and deploy new technologies, far outpacing other civilizations. As Joseph Needham documented, and his student Robert Temple summarized in The Genius of China, about 90 percent of the technologies that underlay the West’s industrial revolution were actually invented in China. Today, revitalizing China’s innovation engine presents unique opportunities to accelerate the world’s next industrial revolution—especially in energy.
China’s recent decades of rapid development and urbanization have lifted hundreds of millions out of poverty but contributed to significant energy challenges. China is now the world’s largest importer of both oil and coal, posing energy security risks. Burning more coal than the rest of the world combined, China is also the world’s largest emitter of carbon dioxide, creating risks to which it is especially vulnerable. And a particulate emissions challenge is eroding public health and sometimes crippling whole cities.
The solution lies not in speeding along an accelerated and well-worn path blazed by many Western economies, but rather in leaping over energy insecurity, carbon, and pollution traps to innovate new energy solutions. Incremental improvements will not suffice. China can develop transformative solutions that decouple growth from material energy flows, and can embrace new sources of energy and prosperity that leave behind the fossil fuel fires of old. In ancient times, fire made us human, then fossil fuels made us modern. So Rocky Mountain Institute coined the term “reinventing fire” to chart how the global transition from fossil fuels to energy efficiency and renewable supply can create a new fire that makes us all durably prosperous, safe, secure, and healthy.
Reinventing fire will require economic and social innovation, and thorough application of the best existing technologies (supported by adoption of the most promising new ones), to retool China’s economy for such leadership in the 21st century. Luckily, many of the building blocks exist today to supplant increasingly costly and polluting alternatives. Assembling and scaling the elements of the new fire will be a worthy challenge—not easy, but easier than not doing it, and worthy of China’s impressive capabilities.
Our analysis suggests that an energy policy focused on these three transformations can be hugely profitable. RMI’s two-year analysis that became Reinventing Fire found that the United States could support a 158-percent-bigger economy by 2050 while eliminating its use of coal and oil, saving $5 trillion in net present value, and reducing carbon dioxide emissions by more than 80 percent compared to 2000 levels. Furthermore, these changes could be driven by business for profit at the local level, without the need for sweeping national legislation or regulation.
China, of course, has a very different starting point than the United States. Yet the benefit could be even greater for China, because it is almost always cheaper to build things right from the start than to fix them later. China is still building much of its ultimate infrastructure, and despite great progress, China still has a less energy-efficient economy than even the United States (which has a long way to go). China has proven it can scale innovation with extraordinary speed, and the dynamism of the modern Chinese economy creates a crucible for innovation.
Specifically, three mutually reinforcing gamechangers have emerged as important enablers of the new, reinvented fire: 1) achieving oil-free mobility, 2) adopting integrative design for radical efficiency in buildings and industry, and 3) redefining the future of the electric grid.
GAMECHANGER 1: ACHIEVING OIL-FREE MOBILITY
To shed a global addiction to oil, China could develop and deploy technologies to lightweight and electrify vehicles, dramatically improve mobility logistics, and help drive biofuel innovations to serve remaining mobility needs that cannot be fully electrified. Transportation is China’s fastest-growing energy-using sector, so an early change in trajectory gains huge leverage over decades.
Ultralighting vehicles is the most critical step in making them superefficient and making electric vehicles economic. Two-thirds of the energy needed to move a typical car is caused by its weight—and every unit of energy we save at the wheels by reducing weight, drag, or rolling resistance saves six more units we need not waste getting that energy to the wheels, so it saves a total of seven units of energy at the fuel tank.
Replacing metals with ultralight, ultrastrong materials like carbon-fiber composites can enable safer, lighter, and more aerodynamic vehicles that consume severalfold less energy and could be simpler to produce with up to 80 percent less capital. Automakers have shown how such designs can reduce an automobile’s total weight by 50–70 percent, reducing its energy needs—if aerodynamics, tires, and accessory loads are also improved—by about half to two-thirds.
This lightweighting makes electric propulsion affordable by needing only half to two-thirds as many batteries or fuel cells. Taken to volume production, as German automakers began to do in 2013 and continue in 2014, this approach could become cost-competitive with traditional Victorian stamping-die automaking, but enable radical flexibility and resource efficiency. China plans to nearly double its automaking by 2020. By leapfrogging from steel to ultralight materials (typically composites-dominated, with light metals where necessary) and from gasoline engines to electric powertrains, this transformation would position Chinese manufacturing as preeminent globally in material and battery technologies for decades to come. Similar lightweighting and electrification approaches would prove invaluable in light trucks too. For example, an RMI spinoff showed that an aluminum-intensive, one-ton, 5-m3cargo fleet van can be highly competitive as a plug-in hybrid with no subsidy, because designing out a ton of weight (and much air drag) saved about half the batteries, paying for much of the lightweighting.
China’s heavy trucking and freight industry is a massive consumer of oil, moving goods internally and transporting manufactures abroad. Fleets of trucks, boats, trains, and planes would benefit substantially from all forms of vehicle efficiency and operational improvements, limiting energy use during loading, idling, and hauling. Tripling the efficiency of heavy trucks and ultimately more than tripling that of jetliners appears feasible and cost-effective for China, too. Such policy-enabled technical improvements represent a transformative solution to China’s existing pollution challenges: rather than curb oil emissions through limiting vehicle use, instead make these vehicles emission-free in the first-place.
Beyond these “technical” adjustments, there is significant opportunity for logistics optimization. Loading rates are one-third lower in China than in developed countries. This is partly due to highly fragmented ownership: 90 percent of all road freight is carried by providers with ten or fewer trucks, and an astounding 40 percent by single-truck carriers. Finding seamless ways to manage loading through multi-modal design, IT-enabled dispatch and load-matching via online markets, and transit-synergized urban growth models can help minimize the costs, burdens, and impacts of moving goods and people.
For a large fraction of heavy-duty trucks, and virtually all boat and air travel, electrification will probably never be economic. However, their oil can still be replaced. While natural gas may be a near-term answer in some applications, a longer-term migration to advanced biofuels would be beneficial, and some drop-in replacements, requiring no changes in infrastructure, are expected to become cost-competitive in the next few years. Hydrogen can also become a realistic option to fuel superefficient trucks and, in the longer run, planes. China’s rapidly growing appetite for petroleum creates strong reasons to lead in seeking such alternatives.
Coming in Part 2, we’ll explore two other gamechangers for China: integrative design and redefining the future of the electric grid.
A version of this article originally appeared in China Policy Review.