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Is Coal Really “Peaking” in China?

Is Coal Really “Peaking” in China? thumbnail

“While uncertainty over the changes in coal stockpiles still exists, we’re confident that the unbelievable may be at hand: peak coal consumption in China.” So concludes a recent blog post from the Sierra Club’s Justin Guay and Greenpeace International’s Lauri Myllyvirta, the latter of whom recently published an analysis suggesting that Chinese coal consumption dropped in the first half of 2014:

What does this recent (possible) dip auger for future emissions and energy trends in China? I think it’s safe to say the answer is far more complicated than “clean energy is the future,” as Guay and Myllyvirta write at the end of their post.

First things first: it’s far from agreed upon that coal consumption has peaked in China. The International Energy Agency does not expect Chinese demand to peak this decade. The US Energy Information Administration projects Chinese coal consumption rising through 2035. Wood Mackenzie expects coal consumption in China could double by 2030. And Bloomberg New Energy Finance, despite a bullish posture towards renewables, expects China to add between 340 and 450 gigawatts of coal-fired power plants over the next 15 years – an addition larger than all of America’s coal plants combined.

And yet, there are signs that growth in Chinese coal consumption could be slowing considerably. Capacity expansion has dropped from about two coal plants built every week over much of the last decade to only about one per week today, as moderating economic growth has partially decoupled from the build-out of industrial coal-fired power. More important, however, are the concerted efforts that Chinese government officials are taking towards a diversification of energy resources in their country and attempts to clean up the horribly polluted air in cities run by coal plants.

There is good news for zero-carbon energy innovation coming out of China. Nowhere in the world are nuclear power or carbon capture advancing at a faster clip. China continues to expand its wind base and has moved aggressively to deploy solar PV – most likely in response to massive overcapacity that plagued the Chinese solar industry as recently as last year.

But it’s arguable that the most significant effort to transition away from coal is a transition towards natural gas. Chinese gas imports have ballooned since 2009, and major investments are being made to replicate the shale gas boom that America is still enjoying. The EIA expects Chinese gas consumption to rise from 4.9 percent of total energy consumption in 2012 to 10 percent by 2020. While water resources and geologic considerations make shale gas production in China difficult, it is estimated that the country has the largest domestic gas reserves in the world.

So if China is actively looking for a coal killer, it’s likely the same one found in America: natural gas. On the face of it, this transition is highly pragmatic (in the Climate Pragmatism sense of the word): moving from higher-carbon, dirtier energy sources to lower-carbon, less polluting ones in service of multiple policy objectives (in this case, both cleaner air and reduced greenhouse emissions).

Except that China’s move away from coal may not actually bring lower emissions. Two major strategies for reducing coal smog in cities are to simply move coal plants farther inland, away from population areas; and to deploy a new fleet of advanced coal gasification plants, which would supply synthetic gas with an even higher carbon intensity than coal. Neither of these initiatives would reduce, and would actually likely increase, net carbon dioxide emissions.

Even if Chinese coal capacity stops growing soon, its existing coal plants will continue spewing out carbon pollution for decades to come. Last year, the Clean Air Task Force’s Armond Cohen and Kexin Liu pushed back on similar claims about “peak coal,” suggesting that a “long, high plateau” was much more likely. And this week, Environmental Research Letters published a widely covered paper by Steve Davis and Robert Socolow finding that Chinese fossil plants will ultimately be responsible for 42 percent of all global future emissions.

It would be nice to be convinced that China has decoupled its economic growth from coal, and that other countries can follow suit. Unfortunately for the global climate, that simply doesn’t appear to be the case. The paths to decarbonization – and the answer to the billions of people whose economies will urbanize and industrialize by midcentury – could very well come from China, where nuclear, CCS, and renewables are also growing quickly. But wishing won’t make it so.

The breakthrough institute



17 Comments on "Is Coal Really “Peaking” in China?"

  1. Perk Earl on Mon, 1st Sep 2014 8:40 am 

    Ever heard of a lull? Not everything peaks just because it levels off.

  2. JuanP on Mon, 1st Sep 2014 8:53 am 

    The Chinese have a right to burn all the coal they want. If we want them to change we have to lead by example by drastically reducing the resources we consume in developed countries, where we consume several times per capita the resources, and have been doing so for many decades. Since we are not willing to do that, we should shut up, put up, and let the Chinese do whatever they want.
    This, of course, guarantees the total destruction of the biosphere, and is our fair reward as a species. Since all this is an unavoidable consequence of our own human nature, I don’t think it can be helped.
    This is one of the reasons I had a Vasectomy instead of children. I realized as a child we have already failed as a species. It is too late.
    Save yourself and your loved ones. We must do what we have to.

  3. rockman on Mon, 1st Sep 2014 9:25 am 

    “First things first: it’s far from agreed upon that coal consumption has peaked in China.” Well, Da! As just pointed out there’s nothing to agree or disagree about. The peak in Chinese coal consumption is a prediction…not a fact. The peak, if it’s happening now, won’t be known for many years…if not decades.

    Again, I do appreciate the desperate desires to claim the generation of GHG is abating. But running stories like this just confuses the reality in the minds of many. IMHO it rates the same as GW denies using cold snaps to support their positions. Painfully familiar to the claims that not granting the Keystone XL pipeline order crossing permit will hurt the development of the oil sands.

  4. Davy on Mon, 1st Sep 2014 9:27 am 

    I agree Juan, but, what I don’t like is China loving hypocrite commenters on this site that talk up Asia as if Asia is not the problem because of shallow per/capita thinking. Asia is growing population and consumption. These hypocrites should be balanced and admit “all” countries need to do less with less. I am not sure it will matter with any kind of blame game because the descent paradigm has begun. China being an export dominated economy in population overshoot has the farthest to fall. The west is already imploding and will leap frog Asia in collapse by having less population overshoot and having already begun economic and population descent.

  5. shortonoil on Mon, 1st Sep 2014 10:06 am 

    The divergence between Chinese coal consumption, and GDP is very similar to what is being witnessed between world energy production, and its GDP. It is the result of central banks trying to “print” energy. The smooth gain in the GDP curve in comparison to the variability in coal consumption is a strong indication that the the GDP is an artificial construct.

    Even though China has been expanding its low grade coal consumption enormously over the last few decades it is interesting that neither the EIA, or Wood Mackenzie has even considered that China’s decline in consumption could be related to depletion. Since the EROI of lignite is fairly low to begin with, approaching its dead state at this stage, shouldn’t really be much of a surprise.

    China has mainly relied on coal to power its high speed industrialization. About 70% of China’s energy demand has been supplied by coal. Even though Chinese reserves are considered the second largest in the world this has little to do with the amount that is extractable. The extractable portion is constrained by its energy content, and not its tonnage. The energy content of most of China’s reserves is very, very low.

    http://www.thehillsgroup.org/

  6. Mike999 on Mon, 1st Sep 2014 11:34 am 

    100 GigaWatt of New Solar is planned for China in the next 3 years.

    Coal is dead, as it needs to be.
    Solar in the US southern states is now down to 5 cent per kWh, now cheaper then coal. Wind targeting 2.5 cent per kWh.

    We switched from burning forest wood to coal, and from coal to oil, then natural gas to heat our homes, now we are moving to Solar, the Whole World.

    That’s just Progress.

  7. longtimber on Mon, 1st Sep 2014 12:10 pm 

    Concentrated delayed vectored fallout? CDVF Nuclear Zombie Swine

    http://www.telegraph.co.uk/news/worldnews/europe/germany/11068298/Radioactive-wild-boar-roaming-the-forests-of-Germany.html

    Sharks next?

  8. poaecdotcom on Mon, 1st Sep 2014 1:31 pm 

    “That’s just Progress.”

    As long as you accept that social complexity is a function of AVAILABLE energy.

    We will ‘progress’ to a renewable future but it is unlikely that we will be chatting about it on these forums!

    Go local!

  9. Graeme on Mon, 1st Sep 2014 4:11 pm 

    Yes it is. Look at the graph.

  10. rockman on Mon, 1st Sep 2014 4:37 pm 

    From http://euanmearns.com/global-energy-trends-bp-statistical-review-2014/

    “The share of global energy consumption in 2013. FFs dominate with nuclear and hydro making up most of the rest. In 2013 FF had 87% share the same as in 2003. Oil has declined since 2003 (Figure 4) from 37 to 33%. Coal has increased from 26 to 30%.”

    Currently coal supplies 30% of the world’s energy while solar supplies less the 1% it might be a tad early to say “coal is dead”.

    What will the future mix look like? Only time will tell. But something will have to fuel the growing demand:

    “The International Energy Outlook 2013 projects that world energy consumption will grow by 56 percent between 2010 and 2040. Total world energy use rises from 524 quadrillion Btu in 2010 to 630 quadrillion Btu in 2020 and to 820 quadrillion Btu in 2040. Energy use in non-OECD countries increases by 90 percent; in OECD countries, the increase is 17 percent.”

    So if fossil fuels aren’t going to power the future everyone better get off the asses right now and start ramping up renewable a hell of a lot faster they have been. That BS that renewable have increased at “a great percentage” is not relevant. Increasing 50% (from 2% to 4%) doesn’t mean crap while ff are supplying 80%+ of all energy.

  11. Perk Earl on Mon, 1st Sep 2014 6:37 pm 

    “Yes it is. Look at the graph.”

    Without more information in your post I presume that means you are stating the graph is proof positive China’s coal usage has peaked.

    The graph only depicts up to the point in time it was plotted. Coal consumption could ramp up later (via imports if necessary).

  12. Perk Earl on Mon, 1st Sep 2014 6:47 pm 

    “In 2013 FF had 87% share the same as in 2003.”

    Rockman nails the problem with that one sentence. In that 10 year period with all the deployment of renewables we would have at least expected some percentage decrease in FF usage. However we did not – why? Because growth is the keystone in the world economy, requiring ever more inputs of energy. It would appear so far that adding renewables simply adds more energy, rather than substituting for FF. I wish it were different, but apparently it is not.

    Keep in mind also that while we descend the net energy ladder, i.e. diminishing returns, if the overall percentages of energy usage do not indicate a transition to renewables, then our situation only worsens.

  13. Makati1 on Mon, 1st Sep 2014 7:32 pm 

    “…Even so, the U.S., which has the world’s largest recoverable coal reserves, remains a net exporter of coal. It exported nearly 10 times more in the first five months of this year than the 4.7 million tons that it imported….Of the 2.4 million tons imported in this year’s first quarter, two-thirds came from Colombia and nearly one-fourth from Indonesia…it often costs less to ship coal from a foreign port to a U.S. port than to move it by rail within the U.S….”

    I read an article that mentions China’s recent coal cut-back was a means to raise the coal prices in China, not a lack of need. There appears to be a glut on the coal market at present.

  14. Makati1 on Mon, 1st Sep 2014 7:37 pm 

    Ref for previous comment:

    http://www.usatoday.com/story/money/business/2014/08/02/us-coal-imports-up-but-exports-down/13368199/

    “U.S. coal imports surge while exports plummet”

    It’s ALL about money…

  15. Graeme on Mon, 1st Sep 2014 9:13 pm 

    If you haven’t already, I suggest readers look at thread on this topic in the environment forum.

    http://peakoil.com/forums/china-cuts-in-coal-use-mean-world-emissions-peak-before-2020-t69503.html

  16. Kenz300 on Tue, 2nd Sep 2014 12:13 pm 

    Wind, solar, wave energy, geothermal and second generation biofuels made from algae, cellulose and waste are the future.

    Renewables to Receive Lion’s Share of $7.7 Trillion in Global Power Funding

    http://www.renewableenergyworld.com/rea/news/article/2014/07/renewables-to-receive-lions-share-of-7-7-trillion-in-global-power-funding

  17. synapsid on Tue, 2nd Sep 2014 8:47 pm 

    Perk Earl,

    rockman could remind us (surprised he hasn’t) that Texas is the largest producer of wind power in the US, and the largest consumer of coal (I think). Just as you say, the wind power has been added onto the use of FF not replacing any of it.

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