Published on January 19th, 2016 | by Joshua S Hill69
China Electricity Demand Slows, Coal Consumption Drops, Hits Australia Hard
January 19th, 2016 by Joshua S Hill
China has reported its electricity demand growth slowed to only 0.5% in 2015, coal consumption dropped 5%, and coal imports dropped 35%.
China is moving to protect its own domestic coal production by cutting overseas imports which, in conjunction with a collapse in India’s coal imports, has left “the seaborne thermal coal industry … entirely beleaguered,” according to Tim Buckley, from the Institute for Energy Economics and Financial Analysis (IEEFA).
Growth in China’s electricity demand grew by only 0.5% year-on-year in 2015, reaching 5,550 TWh, the slowest rate of growth since 1998. This declining growth rate, in conjunction with an increase in non-thermal electricity generation technologies — such as nuclear, hydro, wind, and solar — resulted in coal-fired power generation declining by an estimated 4%, and coal consumption by 5%, which represents an acceleration of the existing 2.9% decline seen in coal consumption in 2014.
“Great strides continue to be made in China in terms of growing clean energy investment and improving energy efficiency,” said Ben Caldecott, Programme Director, Smith School of Enterprise and the Environment, University of Oxford. “This has significant implications for coal-fired power stations in China – in terms of utilisation rates and profitability – as well as for thermal coal miners that have made big bets based on seriously flawed projections of China’s future demand for imported coal.”
This continues a long hoped-for decoupling of economic growth and electricity demand in China — something that some commentators once believed was impossible. “The decoupling of economic growth and electricity demand is a key driver of the Chinese energy transformation and is being witnessed first hand,” said Buckley.
China is also likely to see its coal consumption decline in the coming years, as renewable energy investment increases the renewable energy capacity. Earlier this month, Bloomberg New Energy Finance revealed that China’s investment in clean energy increased in 2015 by 17%, reaching $110.5 billion, “as its government spurred on wind and solar development to meet electricity demand, limit reliance on polluting coal-fired power stations and create international champions.”
While this is good news for China, and for those who are looking to China to make significant moves on the amount of fossil-fuel generated electricity used, the same can not be said for those who were hoping for a recovery of the seaborne thermal coal market. According to Buckley, among those affected is Australia, which for the longest time has been a primary exporter of coal to China (and India). This will immediately impact Adani’s plans to build a massive coal-mining complex in Australia’s Galilee Basin.
“This telling import data confirms the last flicker of hope has been snuffed out, not least for Australia’s Galilee Basin,” said Buckley. “It also carries massive negative implications for Indonesia’s coal export market, given the concurrent collapse in Indian demand.”
“If Australia is to navigate the rapid changes under way in the global energy sector we will need to build a net zero emissions economy,” added Erwin Jackson Deputy CEO of The Climate Institute. “The Paris agreement, which for the first time committed all the countries in the world to ever-strengthening efforts to cut carbon pollution, built on actions already under way in the world’s biggest economies like China. China is successfully decoupling economic growth from a reliance on polluting industries. If our economy is to avoid being smashed against the rocks of stronger booming global investments in clean energy we must reorient the nation for zero-emission prosperity.”
Buy a cool T-shirt or mug in the CleanTechnica store!
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.