China Can’t Quit Coal

Despite enacting recent ambitious clean energy targets, coal will likely remain a central pillar of the Chinese energy economy for years to come, according to a new report from research and consulting company Wood Mackenzie.

China is in the midst of a massive build out of all types of energy in an effort to diversify away from coal, acting with an urgency brought on after smog in and around major cities reached crisis levels. The country currently depends on coal for nearly three-quarters of its electricity generation, but the central government has ambitious plans to build large nuclear, natural gas, and renewable energy capacity to clean up the air.

But the new report finds that the nuclear goals, in particular, could fall short. China is aiming to reach 200 gigawatts of nuclear capacity by 2030, up from 14.6 gigawatts currently, but technology constraints, a lack of infrastructure, and public opposition will limit the expansion of nuclear power. The report estimates that China may only reach 175 gigawatts of nuclear by 2030.

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That would still be enough to position China as the largest generator of nuclear energy in the world, with its share of global nuclear capacity jumping from 4.5 percent to 30 percent by 2030.

Nevertheless, with the Chinese economy still growing rapidly, coal will be hard to displace. Even with all the new clean energy generation planned, China will continue to build new coal-fired capacity. Coal’s share of the electricity sector only drops from 75 percent today down to 64 percent by 2030, under the projected scenario.

But the growth rate of China’s coal consumption could be nearing a peak, which would offer hope that cleaner energy could begin to cut into its share. Moreover, it remains to be seen if China’s newly declared “war on pollution” and subsequent upgrade of environmental regulation will significantly alter the trajectory of the coal sector.

By Joao Peixe of Oilprice.com