A wasted energy surplus

China has reason to be proud of having created a bureaucracy system dating back to the Song dynasty a thousand years ago, and beyond. It is a system at least partly based on meritocracy, it is true, but it is also susceptible to other forces, including ignorance, loyalty, selfishness and “just following orders” syndrome. This centralized system, a prime replacement candidate these days, it would seem, for the Western governance model, has an enormously focused impact when there is a single clear goal in place - the creation of a high-speed rail network, the expansion of solar/wind power generation capacity. But just as with the “nose swab” economy that developed during the COVID era, there is also the problem of bureaucratic inertia. How to stop something that is being blindly auto-implemented when it’s not working but nobody is checking?

A case-in-point right now is China’s state grid. A truly breakthrough system in so many ways. But... the latest news, from the SCMP in Hong Kong, is that the way the national grid has been built, a mad race by officials to bring huge amounts of solar and wind energy online in line with instructions from the Center, has resulted in huge amounts of waste. This in no way detracts from the positives of what is happening—the China system is absolutely right to build out renewable energy capacity, and the super high tension transmission network that can transport electricity over huge distances. But, says the SCMP, “China wasted enough wind and solar power in the first half of this year to cover all new electricity demand” due to bottlenecks in grid absorption.

Another grid problem, fundamentally systemic in nature, is the continuing expansion of coal-fired generation ahead of the 2030 carbon deadline. It all points to massive waste which of course is endemic of state-owned structures anywhere in the world. Private investment capitalism has its faults, for sure, and so does transparent representative government, but there is at least more oversight and less chance of massive wastage. We will in due course see how the investments on AI on each side of the Pacific play out: one private driven, the other system-led.

But one way or the other solar is going to overtake fossil fuels in China far faster than it will in the US. And that is a positive for China. But the waste along the way is noteworthy, nonetheless.

Have a great and sunny weekend! And by the way, we are planning on expanding CER content starting very soon. More to follow…