Welcome to the age of electricity! The latest annual report from the International Energy Agency, published on October 17, demonstrates this: the world economy is electrifying more and more quickly. Since 2010, when overall energy demand increased by 1.4% per year, electricity demand has increased by an average of 2.7% per year. And this is just the beginning. Predicting changes in electricity demand is, of course, a challenge. However, the share of electricity in final energy consumption is increasing more quickly than in the past in all of the agency’s scenarios.
Emerging markets and developing economies are expected to contribute nearly 80% of electricity demand growth through 2030, with China alone accounting for more than 45%! The electrification of the energy system is developing at an astonishing speed, particularly due to the explosion in electricity consumption in the building sector. Likewise, the rapid adoption of vehicles that do not emit CO2 should significantly accelerate Chinese electrification.
Master the value chain
These figures owe nothing to chance, but everything to China’s constancy in the pursuit of an objective: to celebrate, in 2049, the centenary of the advent of the communist state by becoming the Saudi Arabia of electricity . Beijing wants to control the entire value chain of the electricity industry, from the production and refining of metals and other rare earths used in the manufacture of these energy converters which are solar panels or electric batteries to the networks very high voltage transmission, including complete expertise in civil nuclear power. “The Middle East has oil, China has rare earths”, declared Deng Xiaoping in 1992, at the very moment when all Western countries – with the notable exception of Japan – were preparing to dismantle the whole of their strategic stocks of critical metals, to rely on the market for their supply.
More than thirty years after this mineral disarmament of the West, China holds a virtual monopoly on rare earths, these 17 metallic elements essential, because of their properties, to the manufacture of high-tech systems, not only in new green industries, but also in medical radiography or the defense industry. And the same is true for certain critical metals. Imagine a world where 90% of oil refineries are concentrated in Saudi Arabia: this is what is happening when it comes to rare earth refining in China. When Europeans set percentage targets for intermittent renewable energy production, China focused on manufacturing the objects to produce it: Europe looked at the finger when China looked at the Moon…
China has awakened, and only Europe is trembling
Even though the Chinese economy is today in a difficult situation, its ultra-domination in electricity is problematic for both Europe and the United States. The latter have also understood this, who are without hesitation taking a battery of protectionist measures against the Chinese giant, while also embarking on the conquest of low carbon. The energy windfall they have as the world’s leading producer of oil and gas helps them do this.
And Europe? Divided on the response to be given to Beijing, it reproduces with China on low carbon technologies the same pattern of dependence as with Russia in fossil energies, in particular gas. The growing debate on the relevance of maintaining the ban on the sale of combustion engine vehicles from 2035 implicitly raises a broader question about the Sino-European relationship, given China’s advance on electric mobility is substantial. When China awakens… the world will shake : fifty-one years after the publication of Alain Peyrefitte’s visionary work, China has awakened… but only Europe is trembling.
Cécile Maisonneuve is founder of Decysive and advisor to the Ifri Energy and Climate Center
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