Data
License: All rights reserved. Credit: Greenpeace

Chinese coal use set for slowest growth this century (but stays high)

Damian Kahya
Damian Kahya is Energydesk editor
License: All rights reserved. Credit: Greenpeace

Qinhuangdao Coal Port in China

China's National Energy Agency has again revised down it's projections for coal demand to the smallest rise in more than a decade, potentially lowering global emissions forecasts.

It means the country will meet it's target of reducing coal's share of energy usage to below 65% a year early with the agency expecting coal demand to grow by 1.6% next year, far below industry expectations.

The news comes as growth in Chinese coal consumption slowed dramatically last year - to 2.6% - as a series of the country’s most industrial states announced caps or curbs on coal use due to air pollution concerns.

Last week some of China's wealthiest provinces - in the Yangtze River Delta-  promised coal use would peak or start to decline by 2017.

Eight other provinces around major economic areas have made similar commitments, covering about one third of China's total coal consumption.

See also:

China beats global record for solar installations
Chinese governor: Burn more coal and you're fired
Health impact of China's coal plants mapped 

Shares in China's second largest coal company, China Coal, fell dramatically after the company announced that coal caps and falling coal prices would cut profits by 65%.

At the same time the main banking regulator in China has issued an alert on the credit-worthiness of loans to the country's coal sector.

China’s official Xinhua news agency reported that growth in annual coal consumption rose by 2.6 percent year on year, according to CNCA data. Over the past decade Chinese coal consumption has risen by an average of 10 %.

Solar growth

China's rising coal consumption was responsible for two thirds of the increase in global carbon dioxide emissions in 2012 so a slowdown in China's coal use has the potential to significantly reduce current projections for greenhouse gas emissions on a global scale.

The news of the slowdown in coal demand comes as China saw a 36% increase in wind power connected to the grid - though the number of new turbines installed remained roughly the same as last year, according to China’s electricity council.

A boom in wind installations earlier in the decade had seen many plants left without grid connections.

New data from Bloomberg and industry sources also suggests China installed more solar in 2013 than any country ever has - following a change of policy in the world's largest economy.

Coal to gas

The slowdown in Chinese coal demand comes as the International Energy Agency (IEA)forecasts that measures to cut coal from the power sector will continue to curtail Chinese coal demand over the next five years despite controversial plans for a raft of new coal to gas plants in  Inner Mongolia and China's arid Northwestern regions.

The agency forecasts that as a result Chinese growth will be less energy intensive, less coal will be needed for each unit of economic expansion.

“Remarkably, the projected decrease in electricity intensity of GDP leads to a reduction of coal consumption equal to the aggregated annual German and British coal consumption,” said the IEA.

 

 

 

 

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