Monday, January 17, 2011

Coal, China and interesting growth...

Coal use in China's electricity sector increases from 27.7 quadrillion Btu in 2007 to 72.2 quadrillion Btu in 2035, at an average rate of 3.5 percent per year (Figure 64). In comparison, coal consumption in the U.S. electric power sector grows by 0.4 percent annually, from 20.8 quadrillion Btu in 2007 to 23.1 quadrillion Btu in 2035. At the end of 2007, China had an estimated 496 gigawatts of coal-fired capacity in operation. To meet the demand for electricity that accompanies its rapid economic growth, an additional 736 gigawatts of coal-fired capacity (net of retirements) is expected to be brought on line in China by 2035, requiring large financial investments in new coal-fired power plants and associated electricity transmission and distribution systems. In the near term, the IEO2010 projections show a substantial amount of new coal plant builds, with 138 gigawatts of capacity additions between 2007 and 2010. Notwithstanding the substantial growth in coal-fired generating capacity and generation projected for China in the IEO2010 Reference case, coal's share of the country's total generation declines from 80 percent in 2007 to 74 percent in 2035, as generation from nuclear and renewables grows at an even more rapid pace than generation from coal.

Nearly one-half (49 percent) of China's coal use in 2007 was in the non-electricity sectors, primarily in the industrial sector and notably for the production of steel and pig iron. In the IEO2010 Reference case, coal consumption in those sectors increases by 13.1 quadrillion Btu (48 percent) from 2007 to 2035. Within the industrial sector, the single largest use of coal is for the production of coke, which in turn is used primarily to produce pig iron. In 2007, Chinese coke plants consumed 459 million tons18 of coal, representing, on a tonnage basis, about 17 percent of the total amount of coal consumed in all sectors in China during 2007 [5]. China was the world's leading producer of both steel and pig iron in 2007, accounting for 36 percent of global raw steel output and 50 percent of world pig iron production [6].

Coal remains the leading source of energy for China's industrial sector in the Reference case, although its share of industrial energy consumption declines over the projection period, with electricity and other energy sources making up an increasing share of the total. Electricity's share of total industrial energy use rises from 19 percent in 2007 to 32 percent in 2035, while coal's share drops from 60 percent to 47 percent. However, with coal-fired power plants satisfying approximately three-fourths of China's total power generation requirements throughout the period from 2007 to 2035, the increase in electricity demand in the industrial sector can be viewed indirectly as an increase in the demand for coal.


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