This article is part of a series looking back at some of the most noteworthy China stories of 2016.

The smog that blanketed northern China for five days last week finally moved south Thursday, allowing tens of millions of people in Beijing and other major cities to breathe a little easier. 

Yet the root cause of the pollution problem remains — with coal, in particular, at the center of the debate over how to transform China’s energy-consumption patterns.

Wu Libo, a professor of economics and big data and executive director of the Center for Energy Economics and Strategy Studies at Fudan University in Shanghai, told Sixth Tone that controlling the total consumption of coal will remain a major challenge over the next five years.

“The energy market suffers from a lock-in effect, in which coal continues to dominate because the long-term goals set by the central government conflict with the short-term policy goals of local governments,” said Wu. 

The past year has seen cutbacks in coal production in China and new investments in renewable-energy projects that will eventually help reduce the burning of industrial coal in northern China, which environmental group Greenpeace identified as the primary source of the pollution that triggered the red-alert measures in Beijing during the recent high-pollution period, Dec. 16 to Dec. 21. 

Red alert is the highest-possible warning level of Beijing’s six-degree alert system. The level requires a forecast of at least 72 hours of heavy air pollution with an air quality index (AQI) reading of over 200. Coal-fired power plants  are among the biggest causes of such high pollution levels, Yuan Ying, assistant manager of the Climate & Energy Unit of Greenpeace East Asia, said in an interview with Sixth Tone.

“Thermal power plants such as steel plants and heating plants are responsible for triggering the red alert,” Yuan said, “especially in Hebei province, where the [sulfur dioxide] emissions rate is the most concentrated on our surveillance map.” 

When China officially signed the Paris Agreement to fight climate change in September, the world’s largest emitter of greenhouse gasses committed to cutting carbon emissions by 60 to 65 percent per unit of gross domestic product by 2030. The U.S. signed the same day, making it a “historic” moment, some experts said.

Two months after the agreement was signed, the State Council, China’s cabinet, set the upper limit for the annual coal consumption at 4.2 billion tons by 2020, allowing no more than a 1.2-percent annual increase from 2015 — a seemingly feasible plan, as China’s coal consumption appears to have peaked in 2013 and has been in decline ever since. 

This year, coal production has decreased considerably, dropping by 10.2 percent in volume between January and August, compared with the same period last year. Over the next three to five years, the State Council also announced that it plans to cut coal production by 1 billion tons. 

But compromises are frequently made on energy reform. The coal industry still employs 5.8 million people across the country, and in some areas, coal factories and mines are the biggest job providers. After the State Council gave local governments the green light to approve coal-fired power stations as they see fit, an average of four coal-fired plants were approved each week in the first three quarters of 2015, according to a report by Greenpeace. 

“Local governments worry about economic effects, unemployment rates, and decreases in income; that’s why they constantly fail to meet high emissions standards set by the central government,” Yuan said. 

The total capacity of ongoing and approved plans for thermal plants is 400 million kilowatts, nearly double the quota set by the central government for the next five years. 

At the same time, the government is heavily investing in renewable energy, with plans to add 30.83 million kilowatts of wind-power capacity and 18.1 million kilowatts of solar-power capacity in the next five years, increasing the nation’s current total electrical capacity by 4 percent. 

Last year, hydro, wind and solar power accounted for 30 percent of China’s total electrical capacity, a proportion set to grow as 700 billion yuan ($101 billion) is invested in solar and wind power between 2015 and 2020.

While environmental groups applaud the increase in renewable-energy plants, this alone doesn’t mean that the energy is being used effectively, especially if the nation’s power grid isn’t updated at the same time. 

As more wind-power stations have gone into operation, only 85 percent of their capacity was being used in 2015, dropping 7 percent from 92 percent the previous year. In the first half of 2016, this number fell by another 6 percent, to 79 percent. Other renewable-energy sources face similar difficulties.

In a dozen provinces, wind-power stations are turned off at certain times because they are producing too much energy for the network of generators to store, wasting as much as 18 billion yuan in 2015, according to China’s Wind Association.

Currently, there aren’t enough generators to store excess energy, meaning that a substantial amount of the energy produced during peak times is simply lost, the director of the electricity dispatch center in northwestern China’s Gansu province, Chen Zhenhuan, told the People’s Daily.

Furthermore, the electricity supply in China’s western regions exceeds demand in these remote, sparsely populated areas. For this excess power to be transmitted to the coastal hubs, significant, long-term investments would have to be put into adapting the electrical grid. Three provinces have already been told not to work on any new solar projects and instead focus on upgrading generators and power grids.

“The industry will see more investment and growth in the eastern part of China,” Greenpeace’s Yuan said, adding that new technologies will also bring new opportunities. 

In the long run, the grid will have to be improved to allow provinces that generate too much electricity for their local populations to sell the power to others. Right now, however, the main focus should be improving management of existing resources, Fudan University professor Wu said. “For now, the efficiency of resource allocation depends on more delicate forecasts of output generated by renewable energy,” said Wu. 

(Header image: A boy cycles past a cooling towers of a coal-fired power plant in Dadong, Shanxi province, Dec. 3, 2009. IC)