DATA: China’s Coal Consumption Trajectory Conundrum
China’s coal consumption trajectory looks set to continue unabated according to recent data. It looks likely that real-world developments must to some degree undermine this forecast. Yesterday, the Energy Information Administration published it’s new 2011 energy projections – the International Energy Outlook 2011.
EIA Data shows (in the reference case) that world coal consumption is set to soar from 139 Quadrillion BTU in 2008 to 209 Quadrillion BTU in 2035: an average annual increase of 1.5%. Australia’s coal production will increase at an average annual rate of 1.9% to meet this demand – the highest in the world other than non-Brazilian Latin America (largely Colombia and Venzuela).
China gets special attention to to the scale of it’s energy needs, and the rate at which it is expected to change.
In 2035, China’s coal consumption will constitute 54% of global coal consumption: 113.6 Quadrillion BTU – a significant increase in relative share from 2008 at which point it’s share was just over 40% of world total – and almost a doubling from China’s 2008 consumption levels in absolute terms.
What is interesting about this projection is the continued adherence to what we might call a ‘conventional’ view of China’s energy development.
There are analysts who forcefully argue that China’s continued increase in coal consumption at these rates is politically unviable: choking smog and other pollutants will bring this trajectory to an end before too long. Others focus more on fundamental physical and market constraints to this consumption level.
The detailed bottom-up analysis undertaken by the China Energy Group at the Lawrence Berkeley National Laboratory – another Department of Energy-affiliated entity – seems to suggest that the rate and composition of China’s energy consumption increase will be somewhat different to that suggested by the EIA data due to these factors.
The CEG proposes that a greater proportion of the increase in energy supply will be taken up by low-carbon fuels, and demand will be relatively reduced by end-use and generation efficiencies in both their scenarios. EIA projects a significant slow-down in thermal power capacity additions compared to recent years (18 GW per year rather than 55 GW!). CEG admits that only 14% of projected 2025 coal use will be saved through implementation of the most advanced thermal coal power generation units.
CEG forcefully argues that a ‘looming coal gap‘ based on supply constraints, economic growth composition and low substitutability could threaten mid-term supply security. Add to this threat the carbon dioxide emissions from coal combustion in China which is forecast to exceed 8,000 Mt CO2e by 2025; coal mine deaths; particulate and sulfur emissions; and broader macro-market and national security implications. The viability of the forecast for China’s coal consumption is brought into question.