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China’s coal-fired power generation industry must learn to adapt to environmental regulations, claims a new report by energy experts GlobalData.
The new report* states that China’s increasing population, urbanization, and industrialization will push electricity demand upwards, thereby increasing generation capacity. However, environmental policies are expected to carry more weight in future, while carbon emissions hit harsher restrictions.
Since the late 1970s, China has moved from a closed economy to a more market-oriented system, and become the fastest growing economy in the world as a result. China’s fast economic development means that electricity demand has increased at a high rate over the past decade, with total consumption climbing from 1.2m GWh in 2000 to 4.1m GWh in 2011. Installed capacity has been growing in order to meet this soaring demand, and is expected to continue growing in future.
Coal-fired power plants form more than half of China’s total installed capacity, mainly due to huge domestic reserves of the fossil fuel. The country has a large number of coal-fired power plants planned for construction between 2012 and 2020. According to International Energy Agency (IEA) estimates, China will provide an added capacity of 600 GW by 2035 through coal-fired plants. Before 2009, China was the net exporter of coal, but despite the natural domestic abundance of coal the country has now become a net importer, as demand continues to climb. Coal power’s dominance in the Chinese power generation sector over coming years will generate demand for steam condensers in the country.
Coal holds vital importance for China’s national economy and power generation industries, and are therefore regulated by a variety of policies, controlling investments, exploration, production, mining rights, distribution, trading, transportation, and exports. Power generators are also subject to a range of fees and taxes, including safety and environmental protection laws and regulations.
China independently shut down old and inefficient plants with a combined capacity of 70 GW between 2006 and 2010, and the 12th five year plan (2011-2015) aims to produce 11% of China’s energy from non-fossil fuels by 2015, increasing this percentage to 15% by 2020. The plan imposes a cap on coal power generation in order to reduce environmental damage, and wind power capacity is anticipated to increase threefold as a result of this.
The EU has also launched the Co-operation Action within CCS China (COACH) project, which works to mitigate risks arising from China’s carbon emissions by supporting CCS programs. The aim to establish Near Zero Emissions Coal (NZEC) technology in China is funded primarily by the EU, which iscontributing $2.1m of the $3.7m total project cost.
China currently follows the US with the second largest share of global thermal installed capacity with a 21.4% share. In 2011, China’s total thermal installed capacity amounted to an estimated value of 765,460 MW, 706,670 MW of which came from coal-fired power plants. During the forecast period, coal-fired plants are expected to drive thermal installed capacity, with capacity expected to reach 1,074,479 MW by 2020, increasing at a Compound Annual Groth Rate (CAGR) of 4.8%. Total thermal capacity is expected to increase at a CAGR of 4.8% to reach 1.2 million MW in 2020, and revenues for China’s steam condenser market are expected to climb from $1 billion in 2011 to $1.8 billion in 2020.
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