Page 184 - 2017 White Paper
P. 184
7 White Paper on the Business Environment in China
2.2 Chemicals, Bio-chemicals and Energy
The majority of power generation in the PRC— will benefit from efforts made since at least 2008 to
approximately 70 percent—is via coal. upgrade power plants to become more efficient, with
According to a former National Energy Administration approximately 60 percent of new plants being built
official, this is roughly 30 percent higher than the world incorporating technologies that would allow them to
average (Xinhua 2011b). achieve higher energy conservation efficiency rates than
the most efficient plants in the United States (albeit only if
Whereas persistent power shortages at the generation actually used in daily operation) (Bradsher 2009).
level have historically been attributed to shortages in
production, as well as infrastructure unable to support the Similarly, Xinhua reports that many of the most
extensive circulation necessary to keep plants running in inefficient coal-fired plants have been closed (Xinhua
areas lacking local supplies (The Associated Press 2008), 2011a) .The net effect may be minimal for the short term,
the decrease in power consumption as factories closed however: one new coal burning power plant goes under
during the economic slowdown in 2008 actually led to the construction every week (Melik 2011).
encouragement of exporting coal (Shen 2008).
In 2013 the government announced a new plan to
At that time, PRC National Development and Reform address widespread and sometimes severe pollution
Commission Vice Chairman Zhang Guobao observed that problems. Part of that plan entails cutting total
“the downward trend in the domestic consumer price consumption of coal “to below 65 percent of primary
index and falling international prices for major staple energy use by 2017” (Stanway 2013).
energy commodities provide an opportunity and room to
normalize the pricing mechanism for coal used in power “Green groups”, writes Reuters, “were expecting the
plants” (Shen 2008). action plan to include detailed regional coal consumption
cuts, but those cuts appear to have been left to the
Nonetheless, today coal demand outpaces domestic provinces to settle themselves” (Stanway 2013).
production and coal exports have declined since 2008
(Winning 2011). In January 2011 China Daily reported a 31 Such efforts may have repercussions far beyond China’s
percent increase in net coal imports over 2010 following own borders, as well:
a 29 percent increase in 2009 and a predicted increase of
as much as 63 percent for the remainder of that year. By A choking smog across much of northern China
comparison, coal exports were reported to have declined threatens not just the health of local residents, but
by 15 percent in 2010 (Zhao 2011). also of major coal projects globally that are still on the
drawing board.
Domestic coal production is concentrated in thirteen
large “coal production bases” across the country, which […]
“produced 2.8 billion tons in 2010, accounting for 87.5
percent of the country’s production”. A fourteenth, in With China’s coal demand the primary driver for a slew
Xinjiang, is expected to be completed within five years of mine investments over the past decade, this trend
(China Daily 2011). could derail a list of capital intensive coal projects from
Australia toIndonesia and Mozambique.
Given an increase in net imports and continued
efforts to expand domestic production capacity, coal Even without the environmental drive, new railways
will likely continue to play a primary role in the nation’s from mines to ports, falling investment in coal-fired
power production in the near future—a situation which generation and slowing power demand growth could
184
2.2 Chemicals, Bio-chemicals and Energy
The majority of power generation in the PRC— will benefit from efforts made since at least 2008 to
approximately 70 percent—is via coal. upgrade power plants to become more efficient, with
According to a former National Energy Administration approximately 60 percent of new plants being built
official, this is roughly 30 percent higher than the world incorporating technologies that would allow them to
average (Xinhua 2011b). achieve higher energy conservation efficiency rates than
the most efficient plants in the United States (albeit only if
Whereas persistent power shortages at the generation actually used in daily operation) (Bradsher 2009).
level have historically been attributed to shortages in
production, as well as infrastructure unable to support the Similarly, Xinhua reports that many of the most
extensive circulation necessary to keep plants running in inefficient coal-fired plants have been closed (Xinhua
areas lacking local supplies (The Associated Press 2008), 2011a) .The net effect may be minimal for the short term,
the decrease in power consumption as factories closed however: one new coal burning power plant goes under
during the economic slowdown in 2008 actually led to the construction every week (Melik 2011).
encouragement of exporting coal (Shen 2008).
In 2013 the government announced a new plan to
At that time, PRC National Development and Reform address widespread and sometimes severe pollution
Commission Vice Chairman Zhang Guobao observed that problems. Part of that plan entails cutting total
“the downward trend in the domestic consumer price consumption of coal “to below 65 percent of primary
index and falling international prices for major staple energy use by 2017” (Stanway 2013).
energy commodities provide an opportunity and room to
normalize the pricing mechanism for coal used in power “Green groups”, writes Reuters, “were expecting the
plants” (Shen 2008). action plan to include detailed regional coal consumption
cuts, but those cuts appear to have been left to the
Nonetheless, today coal demand outpaces domestic provinces to settle themselves” (Stanway 2013).
production and coal exports have declined since 2008
(Winning 2011). In January 2011 China Daily reported a 31 Such efforts may have repercussions far beyond China’s
percent increase in net coal imports over 2010 following own borders, as well:
a 29 percent increase in 2009 and a predicted increase of
as much as 63 percent for the remainder of that year. By A choking smog across much of northern China
comparison, coal exports were reported to have declined threatens not just the health of local residents, but
by 15 percent in 2010 (Zhao 2011). also of major coal projects globally that are still on the
drawing board.
Domestic coal production is concentrated in thirteen
large “coal production bases” across the country, which […]
“produced 2.8 billion tons in 2010, accounting for 87.5
percent of the country’s production”. A fourteenth, in With China’s coal demand the primary driver for a slew
Xinjiang, is expected to be completed within five years of mine investments over the past decade, this trend
(China Daily 2011). could derail a list of capital intensive coal projects from
Australia toIndonesia and Mozambique.
Given an increase in net imports and continued
efforts to expand domestic production capacity, coal Even without the environmental drive, new railways
will likely continue to play a primary role in the nation’s from mines to ports, falling investment in coal-fired
power production in the near future—a situation which generation and slowing power demand growth could
184
