Coal accounts for over 70% of China’ energy mix, whereas in the United States, coal is 44% of the energy mix. Below I analyze several reasons why China has such high coal requirements as a percentage of its energy supply and I attempt to explain why China’s coal requirements may remain high for a long time to come.
Just how fast are China’s coal demands rising? According to a study, “offsetting one year of recent coal demand growth of 200 million tonnes would require 107 billion cubic meters of natural gas (compared to 2007 growth of 13 BCM), 48 GW of nuclear (compared to 2007 growth of 2 GW), or 86 GW of hydropower capacity (compared to 2007 growth of 16 GW).” (Lawrence Berkeley National Lab. Study)
(See Part One of this series on China’s Coal and a chart comparing China’s energy use to the United States’ Here).
China has trouble diversifying energy supply sources because it lacks significant natural gas supplies, it is starting from a very low base in installed nuclear power plants, and because of other renewable energies’ technical limitations.
1. China’s Lack of Extensive Natural Gas Supplies
Natural gas provides over 20% of US energy, but China has much less natural gas reserves than are available in the US. The US has 79 trillion cubic meters estimated natural gas reserves, whereas China has 22 trillion cubic meters. (EIA). Natural gas only accounts for 3.5% of China’s total energy supply and it is unlikely that Chinese natural gas utilization will increase to anywhere near the levels that it is used in the United States.
Natural gas generally burns cleaner than coal, so use of natural gas is desirable from both a carbon and a sulfur emission point-of-view. “[I]n 2011, China [hopes to]… raise the ratio of natural gas in its total primary energy consumption by 1 to 2 percentage points. . . . Using natural gas … as opposed to coal, could reduce carbon dioxide emissions by 130 million tons a year and sulfur dioxide emissions by 1.44 million tons a year.”( China’s LNG.)
Still, much of China’s natural gas has a high sulfur content, which makes it expensive to produce in a usable, or clean form. However, unconventional gas reservoirs may increase China’s future output. Not all unconventional resources, however, are included in estimations of producible reserves (such as those given above). “[L]ow permeable gas, coal bed methane, and shale gas are each respectively estimated at 100 trillion cubic meters, 30 trillion cubic meters, and 100 trillion cubic meters.” (China Coal Resource, Sept 2009)
Even fast-increasing development of unconventional gas resources will only marginally affect coal’s dominance of China’s energy supply. A 2005 Oxford study determined that “the share of natural gas in the primary energy supply is predicted to rise no higher than 10 per cent by 2020, even in the most optimistic scenario in which natural gas use is significantly promoted.”
Realizing that its domestic resources may not be enough to guarantee sufficient natural gas supply, China has also planned natural gas pipelines to surrounding countries to import gas. China also constructed several LNG (liquid natural gas) terminals (The Guardian, Watts, 2006; see also p3 Oxford Energy Study for a map of planned LNG terminals as of 2005).
(A more in-depth study on the future of China’s natural gas industry is deferred until another article).
2. China’s Coming Nuclear Additions
Nuclear accounts for 20% of US capacity. China has plans to increase their nuclear capacity from ~1.3% of China’s current energy mix to 5% by 2020. Despite plans to construct the most nuclear plants of any country in the upcoming ten years (and subsequently demanding a great deal of uranium), China will find it difficult to quickly displace coal’s dominance of China’s energy supply.
The United States has over 104 nuclear reactors, built over a thirty-year period. Prior to 2002, China had less than three operating nuclear power plants. Today, China has 11 nuclear facilities and plans to construct at least 20 in the next 10 years. But even with a significant building program, it may not be in China’s energy security interest to rapidly increase its percentage of nuclear power. If a massive nuclear-buildout occurs, large quantities of uranium will need to be imported, and engineers will need to be rapidly trained. A more gradual increase in nuclear capacity may be in China’s best interest rather than a break-neck development speed.
3. China’s On-line Wind Capacity And Renewables
Wind and renewables have steadily increased as a percentage of China’s energy mix, rising from 0.06% of China’s energy mix to 1.3% from 2006 to 2008. Additionally, hydroelectric power capacity has grown significantly in the past three years. “In 2008, the country added 20.1 GWe of hydro capacity” (World Nuclear Ass.)
There are limits to how much any country can depend on renewables, however. Engineers I have spoken with claim that an energy grid can only handle a maximum of around 25% of its power from wind. Wind is a variable source and needs scaling units (other energy sources that can turn on when wind is not blowing) to balance wind’s output. Wind’s average capacity utilization factor is only around 31%. In comparison, Combined Cycle Gas, Nuclear, and Coal steam turbines all rated capacity factors above 40%, according to the Nuclear Energy Institute.
Given current technology, at the most, wind could only account for about a fourth of China’s energy mix- and subsequent developments in battery storage or natural gas scaling units are required to make wind economically viable and reliable. (See China’s Dirty Wind for more on wind and scaling). (See “Capturing the Wind” by the House Research Organization for the Texas House of Representatives for an estimate of the maximum amount of wind that can be integrated onto the grid using existing technology without radical alterations– 15GW; as of 2007 Texas already had nearly 5GW of wind online- which was only about 2% of the state’s energy supply.)
4. Hydroelectric Power
Hydroelectric power has been met with some controversy in China. Although there are environmental concerns, property takings concerns, and rainfall has declined, hydroelectric has a lot to offer China. Over 37 GW of hydroelectric capacity was added in China between 2004 and 2007. An additional 20.1 GW of capacity was added in 2008. China’s total potential hydroelectric rating is one of the highest in the world- at 694 GW. However, only around 171.5 GW of China’s capacity is utilized. China hopes to reach 320 GW of installed hydroelectric capacity by 2020 (Huang, 1658).
Of all potential alternatives to Coal, hydroelectric power will likely remain the number two energy supply source. Hydroelectric power has also done a great deal to reduce the amount of ash, sulfur dioxide pollution, and carbon dioxide emissions.
Although China’s coal consumption is double the number two producer’s amount, China seems to have little other viable options to displace coal as an electricity source in the near term.
China is embarking on ambitious wind and nuclear development programs, and it has built pipelines for natural gas, but these programs take time to develop, and there are drawbacks to all alternative energy sources. Even massive hydroelectric expansions have resulted in environmental and land-relocation controversy (See articles on the Nu River Project and the Three Gorges Dam; specifically see the book China’s Water Warriors by Andrew Mertha).
Coal will likely continue to provide a significant portion of China’s energy for the next 20 years– simply because the alternatives are not practical enough to scale-up large enough to replace coal’s necessary position in China’s energy mix.
These next few years will bring large challenges for China’s leaders as they try to balance energy security, energy demands, resource depletion and environmental concerns. With luck, China’s leadership will use constructive and creative solutions to manage and confront these growing concerns.
The Lawrence Berkeley Lab. Government Sponsored Study of the Chinese Coal Industry (July 2009)
Andrew Mertha. China’s Water Warriors. 2008.