China: Country Profile MCA Energy Fact Sheet
Coal dominates China’s primary energy mix, providing 66 per cent of China’s energy demand in 2014. China’s electricity consumption has increased more than eight times since 1990 and it is the largest consumer of electricity in the world. It is forecast to further double by 2040. Currently, coal accounts for more electricity capacity than all other sources combined accounting for more than 64 per cent of all total installed capacity. Coal also accounts for 42 per cent of electricity capacity under construction and 68 per cent of planned capacity. China is rapidly modernising its coal fleet - with 403 GW of high efficiency, low emissions (HELE) coal plants, approximately seven times Australia’s total electricity capacity across all fuels, under construction or planned with a 40 per cent lower carbon footprint. Nuclear power’s share of China’s electricity will increase five-fold from 2 per cent in 2013 to 10 per cent in 2040.
Coal dominates China’s primary energy mix 1
China’s primary energy demand in 2014 was 2,972 million tonnes of oil equivalent (Mtoe). It has increased 66 per 2 cent over the last decade, more than quadrupled since 1990 and increased more than seven times since 1980. •
China is the world’s largest producer and consumer of coal. It consumed more than half of global coal 3 consumption in 2015, and produced 47 per cent of global coal.
•
Coal provided 1,962 Mtoe or 66 per cent of China’s energy demand in 2014, equivalent to 241 days. -
•
Oil provided 520 Mtoe and natural gas accounted for 167 Mtoe. -
•
Coals use has increased by almost 50 per cent over the last decade. 5
Fossil fuels provided 89 per cent of China’s primary energy needs in 2014, about 325 days of the year.
Non-hydro renewables (wind and solar) provided 53 Mtoe. -
4
6
7
That’s just 1.8 per cent of China’s primary energy needs or just 6.5 days of China’s primary energy needs.
Chart 1: China: primary energy by source, 1990 and 2014 1990
Mtoe 2000
2014
1600 1200 800 400 0 Oil
Gas
Coal
Nuclear
Source: BP Statistical Review of World Energy 2015, International Energy Agency
Hydro
Renewables
China: Country Profile
Coal’s share of electricity use has grown strongly since 1990 China is the largest consumer of electricity in the world. Its electricity consumption increased more than eight times 8 from 650 TWh in 1990 to 5,462 TWh in 2013. •
Greater energy access has been underpinned by coal, with the amount of Chinese electricity generated by 9 coal increasing almost nine times from 470 TWh in 1990 to 4,120 TWh in 2013.
•
In 2013 coal provided more than 75 per cent of China’s electricity needs. That is more than four and a half 10 times the second-largest energy source, hydro.
Chart 2: China: electricity consumption by source, 1990 and 2013 TWh 4500
1990
2013
4000 3500 3000 2500 2000 1500 1000 500 0 Coal
Oil
Gas
Nuclear
Hydro
Renewables
Source: International Energy Agency
Electricity capacity China’s installed electricity capacity has increased more than nine-fold, from 138 GW in 1990 to 1,286 GW in 2013. •
Coal is responsible for more capacity than all other sources combined accounting for more than 64 per cent of 11 all total installed capacity.
•
Coal fired generation capacity has increased more than two and a half times in the decade to 2013, from 12 307 GW in 2004 to 826 GW in 2013.
•
In 2013, coal accounted for 64 per cent of generation capacity, but generated 75 per cent of electricity 13 demand, as compared with renewables that accounted for 7 per cent of capacity and generated 3 per cent.
China: Country Profile
Chart 3: China’s electricity: Capacity and generation, 2013 80
Electricity generation
%
Electricity capacity
70 60 50 40 30 20 10 0 Coal
Gas
Oil
Nuclear
Hydro
Renewables
Source: International Energy Agency
China’s electricity generation is expected to almost double between by 2040, from 5,462 TWh to 10,626 TWh. •
While coal’s share of generation declines in this period, it is still the single biggest contributor to the increase in demand, contributing 22 per cent of the increase. Coal accounts for almost half of all electricity generation in China in 2040.
•
China’s electricity capacity is expected to more than double between 2013 and 2040, to total 2,783 GW in 2040.
•
Coal will contribute about a quarter to the increase, the largest for any single fuels source.
14
Despite growth in coal use, per-capita energy consumption in China is only half of the OECD average •
According to latest available data China’s per-capita energy consumption was 2.1 tonnes of oil equivalent, half as compared to the OECD average of 4.2 and less than one-third of US average of 6.8 tonnes of oil 15 equivalent.
•
In China around 450 million people rely on biomass for cooking. According to the World Health Organization, 4.3 million premature deaths each year can be attributed to household air pollution resulting 17 from the inefficient use of traditional biomass such as wood, charcoal and animal waste.
16
China: Country Profile
Renewable energy is not a plausible option to meet China’s energy needs Chart 4: China: Coal consumption compared with wind and solar over the last decade (Mtoe) 2,000
Coal
Mtoe
Renewables
1,600 1,200 800 400 0 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: BP statistical review of world energy June 2015,
Coal accounts for the largest share of electricity capacity planned or under construction •
Coal accounts for 42 per cent of electricity capacity under construction and 68 per cent of planned electricity generation capacity.
•
In comparison, renewables account for 1 per cent of under construction and 3 per cent of planned capacity.
Chart 5: China’s electrical capacity – operating, under construction and planned 1400
operational
GW
under conctruction
planned
1200 1000 800 600 400 200 0 coal Source: Platts.
hydro
nuclear
gas
oil
renewables
18
China: Country Profile
China’s coal imports •
China’s coal imports have increased by more than 1000 per cent in the decade to 2014, totalling 291 million 19 tonnes in 2014, up from 26 million tonnes in 2005.
•
China’s coal imports are expected to moderate to about 225 million tonnes by 2020.
20
Chart 6: China: coal imports 2005-2014 Mt
350
327 291
288
300 250 200 165 150
182
126
100 50
38
26
51
40
0 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: China statistical yearbooks
China is rapidly embracing new high efficiency, low emissions coal technologies •
China is leading the way in the use of high efficiency, low emissions (HELE) technologies.
•
China is rapidly modernising its coal fleet, with 403 GW of HELE coal-fired power plants under construction or 21 planned. -
This is almost seven times Australia’s total power capacity across all fuels.
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64 per cent of the HELE plants under construction or planned are using ultra-supercritical technology (256 GW)
China: Country Profile
Chart 7: China’s coal electricity capacity – current and planned, by technology GW 600
Current
Planned
500 400 300 200 100 0 Subcritical
Supercritical
Ultrasupercritical
Source: International Energy Agency Clean Coal Centre
Australia’s high quality coal is suited to these clean technologies •
The roll out of advanced HELE coal generator technologies in China presents a significant long term opportunity for Australian coal producers.
•
Australia’s coal has a higher calorific value on average as compared with coal from other regions.
•
Coal is Australia’s second largest merchandise export to China after iron ore. Australia’s coal exports to China 22 totalled $47 billion in the decade to 2015.
Chart 8: Coal quality – Australian coal leads in energy content kcal/kg 6500 5900
6000
6190
5500
4500
5000
5000
Gulf Coast Western, USA
Kalimantan 2, Indonesia
4100
3500 Lignite
Source: Aurizon beyond 2020: Sustainability report 2014
Kalimantan 1, Indonesia
Richards Bay, South Africa
Newcastle, Australia
China: Country Profile
Australia’s coal has lower sulphur on average as compared with coal from other regions. Chart 9: Australian coal also has low sulphur levels %
1
1 0.9
1
0.9 0.8
0.8
0.7
0.7 0.6 0.5
0.5 0.4 Lignite
Gulf Coast Western, USA
Kalimantan 2, Indonesia
Kalimantan 1, Indonesia
Richards Bay, South Africa
Newcastle, Australia
Source: Aurizon beyond 2020: Sustainability report 2014
The outlook for long-term growth in China’s nuclear power is strong •
Nuclear power generation is projected to grow at an annual rate of 9 per cent between 2013 and 2040.
•
Nuclear power’s share of electricity will increase five-fold, from 2 per cent in 2013 to 10 per cent in 2040.
Chart 10: Nuclear power in China is projected to grow substantially TWh
China's nuclear power generation (TWh)
1200
1102
1000 834 800 600 400
400 200
112
0 2013 Source: International Energy Agency
2020
2030
2040
23
China: Country Profile
•
Nuclear power capacity will grow at an annual rate of 8.3 per cent between 2013 and 2040.
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China has become largely self-sufficient in reactor design and construction, as well as other aspects of the fuel cycle. It is making full use of western technology while adapting and improving it. Additional reactors that are planned include some of the world’s most advanced technology, supporting strong growth in capacity.
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Chart 11: Nuclear capacity in China is projected to grow substantially 160
China's nuclear power capacity (GW)
TWh
145
140 110
120 100 80 55
60 40
17
20 0
2013
2020
2030
2040
Source: International Energy Agency
The outlook for China’s uranium demand is strong •
China has 32 operating reactors, 22 under construction, 42 planned and 136 proposed.
•
China’s uranium demand will increase by more than two-fold.
25
26
Chart 12: Projected annual reactor-related uranium requirements to 2035 25000
High
tonnes
Low 20500
20000 16200
16200
15000 14400 10000
8200
8200
5000
6450
6450
2015
2020
12300
12300
2025
2030
0 Source: Uranium 2014: Resources, production and demand, a joint report of OECD, NEA and IAEA
2035
China: Country Profile
Myth and Reality Claim: Environmental groups have repeatedly claimed that China will reduce coal consumption to supply its energy needs. Reality: Global, Chinese, US and Australian independent forecasters and research institutions all agree that China will remain a major consumer and importer of coal for decades. International Energy Agency (global energy forecaster): ‘China carries huge weight in the world of energy: it remains by a distance the world’s largest producer and consumer of coal throughout the outlook period (2013-2040). 27 By 2040, China represents 45 per cent of global coal use. In 2040, China is expected to import 120Mt of coal.’ Department of Industry, Innovation and Science (Australia’s official energy forecaster): ‘China’s Intended Nationally Determined Contribution for COP21 in Paris indicates that coal will remain a key part of its energy mix, but there will be a greater focus on high efficiency, low emissions technologies and carbon capture and storage. This will be supported by the Clean Coal Action Plan 2015–2020 released in May 2015. Under the plan, the government will focus on the clean and efficient use of coal through increasing coal quality, retrofitting coal-fired power plants, 28 industrial boilers and coal chemical operations, and controlling residential use.’ Energy Research Institute (China based national research organisation): ‘Experts at the Energy Research Institute have recommended that China move away from a system hauling coal across the country and instead increase imports to ease pressure on transportation. Traditionally, we transport coal from the west to the east, from north to south. This has a very, very high cost, said Yang Yufeng, senior researcher at the institute. We need to more effectively use the international coal market to 29 import more coal, especially for our southeast coastline.’ Breakthrough Institute: ‘China will likely replace existing coal consumption with more new coal power generation 30 than that from new nuclear, or from new wind and solar power generation combined.’ The Economist Intelligence Unit: ‘For many years, coal will remain China's biggest source of energy. The vast amount of existing coal-fired generating capacity will serve as the mainstay of electricity production for years to come. Yet coal's relative share in the energy mix will shrink as fewer new plants run on coal; any expansion in absolute coal 31 consumption will therefore be slow.’ Institute for Energy Research: ‘China’s priority is to continue raising the standard of living of its citizens. With China’s economic growth rate declining a bit, China will not risk its further decline by curtailing the use of the fossil fuels upon which its economy depends. As a result, China will only commit to continue to improve its energy efficiency (energy consumption per unit of GDP). China will continue to use fossil fuels to grow its GDP since economic output and fossil fuel use are connected. The country’s only concession is to reduce its fossil fuel use from 90 percent to 80 32 percent’. China’s Energy White Paper: ‘Worldwide, fossil energy, including coal… will continue to play a dominant role in energy supply for a long time to come. China is no exception. Therefore China will continue to plan fossil exploitation 33 and utilization… It will speed up the construction of advanced production capacity [and] eliminate outdated capacity.’
China: Country Profile
Endnotes 1
BP statistical review of world energy 2015. June 2015. ibid. 3 ibid. 4 ibid. 5 ibid. 6 ibid. 7 ibid. 8 International Energy Agency, World energy outlook 2015, p. 634. 9 ibid. p. 634. 10 ibid. p. 634 11 US Energy Information Administration, International energy statistics, International Energy Agency, World energy outlook 2015, p. 634. 12 International Energy Agency, World energy outlook series. 13 ibid. 14 International Energy Agency, World energy outlook 2015, p. 634. 15 World Bank World development indicators accessed on 4 April 2016. Latest data is available for year 2012. 16 International Energy Agency, World energy outlook 2015, p. 105. 17 World Health Organisation, Household air pollution and health, fact sheet no. 292, updated March 2014. 18 Platts database. 19 China statistical yearbooks. 20 Department of Industry, Innovation and Science, Resources and energy quarterly, September 2015, p. 41, 56. 21 Platts database. 22 Department of Foreign Affairs and Trade, Trade statistics pivot tables. 23 International Energy Agency, World energy outlook 2015, p. 634. 24 ibid. p. 634. 25 World Nuclear Association, 2016. 26 Joint report of OECD NEA and IAEA, Uranium 2014: Resources, production and demand, OECD, Paris, 2014, p.104. 27 International Energy Agency, World energy outlook 2015, p. 1, 277, 278. 28 Department of Industry, Innovation and Science, Resources and energy quarterly, September 2015, p. 47, 48. 29 N Narayanan, ‘China may not find enough coal to burn’, Scientific American. 14 March 2013. 30 A Yip, US-China climate deal underscores need for substantial energy innovation, Breakthrough Institute, 9 December 2014. 31 The Economist Intelligence Unit, Coal contraction, 27 January 2015. 32 Institute for Energy Research, Coal to remain major global power source – particularly in China, December 21, 2015. 33 China’s Energy Policy 2012, accessed at http://au.china-embassy.org/eng/zt/1/t985255.htm. 2