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Beyond China's Coal Fields: Expanding Its
Gas Resources
by James Finch 17-08-2006 |
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Article:
In the first half of 2006, China's total power consumption reached 1.3
trillion kilowatt-hours, an increase of 12.89 per cent over the same period a
year ago. But the country only generated 1.23 trillion kilowatt-hours during the
first six months of this year - a shortfall of 700 million kilowatt-hours.
According to China Electricity Council Secretary-General Wang Yonggan, power
shortages will continue to plague China, but he hopes they will somewhat ease.
At the beginning of 2005, twenty-five Chinese provinces suffered power
shortages. This had been reduced to nine provinces this past January, and
recently the number of provinces suffering power shortages had fallen to four.
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China relieved its widespread power shortages over the past six months
because of its new power stations, but officials insist the power industry must
try to reduce energy consumption per unit of GDP by 20 percent to comply with
the latest five-year plan through 2010. Power deficits are still expected in
East China, North China and part of South China during peak summer months even
though China spent more than $9 billion in the first half of 2006 to improve its
power transport capacity.
But how will China continue to fuel its power stations so they can generate
electricity? Nearly 84 percent of China's power is thermally fueled, mostly by
coal. China's 30,000 coal mines produced more than two billion tons in 2005.
This is not likely to be drastically reduced over the next two decades, but
China is making an effort to exploit other resources. Drawing almost 14 percent
of its energy from hydroelectricity, the country plans to dam up all five of
Asia's major rivers in order to keep its generators going. China has helped
drive up the price of uranium with its plans to dramatically increase its
nuclear energy program.
Reducing the Coal Consumption Rate
Slowly, China is trying to wean itself off coal. Over the first six months of
this year, China reduced its coal consumption rate, as measured by
kilowatt-hour, by less than two percent compared to the first half of 2005.
While China has stated it plans to expand its hydro, nuclear and renewable
energy programs to increase their share of electrical power production, the
country ambitiously hopes to more than double the amount of natural gas in its
energy mix. Currently providing a little more than three percent of the energy
mix, the Chinese have often announced they want natural gas to provide eight
percent or more, by the time the Eleventh Five Year Plan ends in 2010.
"It's doable," Phil Flynn of Alaron Trading Corp told us. "It's going to be
tough and very expensive, but I think they can reach that percentage." However
in February of this year, the China Daily newspaper reported the bulk of China's
gas-fired power plants could be closed down because of a natural gas shortage.
For example, four gigawatts of installed capacity were not used in Eastern
China, in the latter part of 2005, because the country could not obtain
sufficient gas supplies to power the plants. China's National Development and
Reform Commission plans to increase the country's gas power capacity to 30
gigawatts, but the head of China's Electricity Council announced that gas
shortfalls would probably make this target impossible to achieve.
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