Semi-structured Interview Questions

Interview outline Notes

Green Energy Transition vs. The Energy Infrastructure Financing Gap Thesis introduction and research questions

The project addresses the financing gap that stands in the way of a global green energy transition. By looking at the key emitters, USA, EU and China, we investigate green bond effectiveness in closing this gap in financing compared to other types of funding methods.

Our research question is: Are Green Bonds an effective tool for funding the Energy Tran-sition? A Multi-Level Impact Assessment of Green Bonds.

Our paper discusses whether green bonds are truly being used to enable large amounts of capital to flow in the right (green) direction: decarbonisation targets in line with the Paris climate goals. The paper also discusses greenwashing of green bonds in terms of the use of proceeds clause and, here China is an interesting case regarding ‘green coal’.

From this interview, we hope to gain insight into what motivates certain industries to seek green bond financing in order to achieve a green transition.

General Energy Sector Questions

Without going into detail on the current energy mix specifics, how would you describe the current state of development of China’s green energy transition on the ground?

Which sectors are receiving the most positive/negative attention by stakeholders such as government, regulators, and society at large? - Here I am looking to coal caps, incentives, policy goals etc.

How is the electric energy grid system developing?

In our last interview, you stated that getting rid of subsidies for offshore could indicate China isn’t going the right way? Is this still your view?

Green finance emerging – the PBOC provides cheap loans to banks for financing of green projects - essentially switching from subsidies to incentives and more in line with China’s ambitions in supply-side reform

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In our research we have identified three motivations for green bond issuance:

Green bond issuance as a corporate signaling/marketing tool indicating a genuine move towards a green transition

Taking genuine climate action towards greening and changing long term business model through restructuring

Prolonging CO2-emission-heavy business model through, essentially, greenwashing key business activities

What motivations do fossil fuel energy producers have to issue green bonds?

Which energy industry sectors benefit most from issuing target linked bonds such as green bonds (Use of proceeds requirements: climate change mitigation/adaptation, do no significant harm, positive impact on climate)

Here I am specifically interested in OPEX vs. CAPEX market players.

Coal in China – An obsolete industry?

How realistic is China’s ambition to make coal-fired power plants obsolete by 2060 when China is still constructing new coal plants? (38.4 GW added capacity in 2020 alone) Can you put this in the perspective of increasing energy needs alongside rising GDP and energy security needs vis-`a-vis “Ecological Civilization” ideals?

Many green bonds have been issued to finance coal power since 2016 - The abovementioned statistic on the capacity increase also includes decommissions – Could this mean inefficient coal power plants are being replaced by less polluting ones or is that pure speculation?

China has issued green bonds to fund coal power efficiency increases and emission reduc-tions, yet it was just taken off the PBOCs Green Bond Endorsed Project Catalogue? How does this actually affect China’s largest coal power companies?

Will a reduction in funding availability meaningfully reduce CO2 emissions by 2030?

In the long run – 2060?

Does your answer change when addressing POEs vs SOEs?

Our interview findings with EIB/Nordea show that the term “green” must be viewed by Page 178 of 198

incorporating economic development and social context in the discussion.

When addressing the issue of greenwashing in terms of green coal, how would you go about this issue?

You previously stated “coal is the foundation of the Chinese society so I have to say, for them to get rid of the coal is actually a huge burden. It will be something like cutting off your legs and try to run...employment is heavily reliant on coal”.

Natural Gas

Context: The European Commission has adopted its final screening criteria under the EU taxonomy, a framework for classifying green investments i.e green bonds. A key battleground has been the energy criteria, with various industry bodies and member states lobbying for the inclusion of certain technologies, such as natural gas. Amid the uproar, the Commission chose to delay its decision on whether to include the controversial technologies such as natural gas.

The EU is showing signs of slowly moving away from viewing natural gas as “green” in order to achieve a green energy transition after almost completely cutting out coal and labelling it “brown”.

Does this trend put further pressure on China’s green energy transition?

Concluding Question

What do you think is the most important and/or effective tool in accelerating and ul-timately achieving the green energy transition? Government led efforts; policy setting, regulations? Or market mechanisms; private investors, society? Both?

Areas of expertise

Offshore and onshore wind District Heating and cooling Sustainable Cities Buildings

Green energy solutions (hydrogen, biofuel, biomass, solar) Energy efficient power production

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Maritime technologies

In order to save time and allow for more in depth questions, ask for permissions to use past interview transcript in Master thesis project.

In depth knowledge of political framework (PESTEL) - PBOC/NDRC newly released green project catalogue (no coal) what consequences this has on China’s energy mix?

OPEX vs CAPEX

Energy sector – China specific: motivations for issuing a green bond/signaling corporate move towards a green transition/taking action towards greening depending on industry?

A green transition of the Chinese economy and society: “Ecological Civilization”

BRI: exporting fossil fuel and emission-heavy industry to countries along the road.

The 14th FYP: “Adhere to the concept that lucid waters and lush mountains are invaluable assets. Adhere to respect, follow and protect nature. Adhere to the priorities of resource conservation, environmental protection and restoration of nature. Implement sustainable development Strategies. Improve the overall coordination mechanism in the field of eco-logical civilization, and build an ecoeco-logical civilization system. Promote a comprehensive green transition of economic and social development, and build a beautiful China.”

ENERGY: “Resolutely curb the blind development of high energy-consuming and high-emission projects, and promote green transformation to achieve positive development.

Expand in sectors such as energy saving, clean production, clean energy, ecology and environment, green upgrading of infrastructures, green services etc.”

“Chinas overarching ambition is to establish a modern, clean, low carbon, safe and effi-cient energy sector. This is to be ensured by having 20% non-fossil fuel in total energy consumption by 2025, 25% by 2030 with total 1200 GW of installed capacity of wind power and solar power by 2030.

In the new 14th Five-Year Plan China is aiming to ramp up its ambitions in developing its energy sector in order to include more green energy sources and peak its carbon emission by 2030. This entails including more renewable energy sources in the provincial energy mix and development of plans to mitigate the environmental impact of the energy and industrial sector. As an overall target, China aims to increase its proportion of non-fossil energy sources to about 20%, which primarily will be based on offshore wind, solar, hydro

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and nuclear.”

Energy Security Energy security is identified as one of three predominant security risks to China’s economic and social development in the 2021-2025 period alongside food and financial security. In order to maintain energy and resource security, China aim to improve the distribution and structure of coal production to ensure supply, while the plan also calls for a steady increase in oil and gas. The 14th Five-Year Plan also contains a target for non-fossil fuels, which includes nuclear and hydropower, to make up around 20% of China’s energy mix by 2025.

Renewable Energy Offshore Wind The future renewable energy development in China includes both centralized and distributed systems according to the provincial setup, which involves population intensity and space availability. The development of offshore wind in the coastal provinces is expected to continue to develop in an orderly manner and large-scale power bases will be established in provinces with large offshore wind potential such as Guangdong, Fujian, Zhejiang, Jiangsu, and Shandong. As a measure to boost the offshore wind development, the National Energy Administration (NEA) will in 2021 issue a planning and management measures for development of deep-sea and offshore wind power, and furthermore launch deep-sea offshore wind power demonstration projects. Meanwhile, NEA urges local authorities to actively introduce their own incentives and subsidy policies in order to support a sustained offshore wind development.

Need for More Energy Storage and P2X-Hydrogen For the first time, the 14th Five-Year Plan sets hydrogen and energy storage as cutting-edge technologies. The government will organize and implement plans for future industry incubation and acceleration. In order to utilize the full potential of renewable energy sources, especially when establishing offshore wind in the coastal provinces, it is necessary to decrease the high wind curtailment levels due to imbalance of energy consumption and production. Therefore, China plans to develop more hydrogen based P2X facilities in order to store surplus energy from wind, solar and hydropower in order to produce green hydrogen.

Energy Efficiency Under the theme of green development, China is resolved to promote energy efficiency. That applies to multiple areas, but an emerging area such as data centres is specifically mentioned. The 14th Five-Year Plan also states an intent to optimize China’s energy system and implement an energy saving technology transformation. In relation to smart energy, which refers mainly to intelligent upgrading of power plants, an energy efficiency analysis will be conducted in the coming years.

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BIODIVERSITY: According to the 14th Five-Year Plan pollution prevention and control has high priority and environmental governance system will be improved within the next five years. According to the Five-Year Plan, formulation of a three-year plan for estab-lishment of a modern environmental governance system will be implemented. This will among other things include building a system for oversight of fixed pollution sources based on emission permits.

Previous interview statements:

Question regarding the neccessity to include social aspects when planning a green energy transition: “the current state of the energy industry, as I said, the, the, the coal is the foundation of the Chinese society so I have to say, for them to get rid of the coal is actually a huge burden. It will be something like cutting off your legs and try to run. Because most of the developments and the economy and villages and municipalities townships etc.

are based on coal manufacturing coal mining and also employment is heavily reliant on the coal industry.”