Download China`s Energy Consumption

China’s Energy Consumption
Econ 286
Spring 2000
Josh Counts and Rhys James
China’s Energy
• From 1979 to 1997 China's average annual
GDP growth rate came to 9.8 percent
• immense size and population strains
resources
• distribution not production is the problem
Total Energy Consumption
Total Energy Production
China’s Robust Growth in
Energy Demand
7
6
5
4
Energy Demand
(relative to 1980)
3
2
1
0
1980
1990
2000
2010
2020
Energy Intensity
• Becoming increasingly energy efficient
• Energy Intensity(consumption per unit of
GDP) down by half over last 20 years
• still 3 to 10 times that of major industrial
economies
• predicted to decline to 60% of current levels
in next 25 years
Future Growth of Total Energy
Consumption
• Decline in Energy Intensity leads to 4.5%
average annual growth in next 25 years
• triples Total Energy Consumption over that
time span
Current Energy Breakdown
• Coal is #1 but decreasing
• still not enough alternative sources to come
close to ending dominance
• only sizable and affordable alternatives are
Oil and Natural Gas
• all others including Nuclear and
Hydroelectric are currently too expensive
Proportion of Different Energy Types
Statistics of Current Energy
Breakdown
•
•
•
1987
1995
Production (millions of
1988
1996
1989
1997
1990
1991
1992
1993
1994
tons of coal equivalent
1187.3
912.7
1290.3
958
1326.2
1016.4
1319.9
1039.2
1048.4
1072.6
1110.6
72.6
75.3
21
16.6
2
1.9
4.4
6.2
73.1
75.2
20.4
17
2
2.3
4.5
5.8
74.1
74.3
19.3
17.4
2
74.2
74.1
74.3
74
74.6
19
19.2
18.9
18.7
17.6
2
2
2
2
1.9
4.6
6
4.8
4.7
4.8
5.3
5.9
866.3
1311.8
930
1389.5
969.3
1420
987
1037.8
1091.7
1159.9
1227.4
76.2
74.6
17
18
2.1
1.8
4.7
5.5
76
73.5
17.2
18.6
2
2.2
4.9
5.7
76.2
76.1
75.7
74.7
75
16.6
17.1
17.5
18.2
17.4
2.1
2
1.9
1.9
1.9
5.1
4.8
4.9
5.2
5.7
1542.2
3266.5
1716.5
3580.1
1786.9
3895.1
1854.8
2025.4
2313
2625.3
0.54
0.39
0.54
0.36
0.53
0.51
0.47
0.44
0.42
•
•
Percentage of Total
•
coal
•
crude oil
•
Natural Gas
•
Hydro Power
•
•
Consumption
•
•
Percentage of Total
•
Coal
•
Crude Oil
•
Natural Gas
•
Hydro Power
76.2
74.6
17
17.5
2.1
1.8
4.7
6.1
•
•
GDP(billion of yuan,
•
•
constant 1990 price
2956.1
Energy Consumption
•
(million ton per billion
•
yuan)
0.56
0.4
Future Breakdown of Energy
• Coal will still rule
• will decrease from 72.2% of production in
1998 to 67.6% in 2025
• increasing levels of Hydroelectric, oil, and
Natural Gas cause slight decrease in
proportion of coal
Future Energy Production
Energy Breakdown 1998 vs.
2025
Energy Production Growth
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Coal (in 100,000 Oil (in 10,000 tons)
Generated
tons)
Electricity (in 100
million kwh)
***Note the units for coal and oil are
different. Therefore much more coal is
produced than oil.
1978
1990
1997
Coal
• China is the earliest country in the world to discover, use
and mine coal.
• Establishment of the new China liberalized productivity of
the sector to a great extent.
• During the period from 1949 to 1957 when the First FiveYear Plan was finished, the annual output of coal rapidly
increased to 130.5 million tons from 30.98 million tons,
making China the fifth largest coal producing country in
the world from the 10th in the past
• As of 1995 China was the world’s largest consumer of
coal, consuming one out of every 3 tons of coal worldwide
Coal
• It is expected that by 2000 the total output
of coal in China will reach 1.45 billion tons,
retaining China's first position in coal
production in the world.
• Mechanization will come to 80 percent of
the sector, and 100 more mining pits of high
yield and high efficiency will be
constructed.
Trends in Coal
77
76
In % 75
of
total 74
Coal Production
Coal Consumption
73
72
1997
1995
1993
1991
1989
70
1987
71
Projected Costs of Alternative Energy Sources in
2020
High-end Estimate
0.25
Cost per
kilowatt
hour in 2020
(in 1990
yuan)
0.2
0.15
0.1
Nuclear
Hydro
Wind
0
Coal
0.05
Cost per
kilowatthour in
2020 (in 1990
yuan)
Nuclear
0.3
Hydro
0.35
1.2
1
0.8
0.6
0.4
0.2
0
Wind
0.4
Coal
Low-end estimate
Future of Coal
• Due to its relative low price compared to
other energy sources and natural abundance
Coal will remain the leading source of
energy in China for many years to come
• Hydroelectric power and nuclear power will
not significantly replace coal any time soon
Oil
• Second-largest component of China’s
Energy Consumption and Production
• 1957 60% imported
• 1960’s and 1970’s oil “boom” 25% annual
growth and energy autonomy
• began exporting oil peaking at 6.21 million
tons in 1985
• by 1993 China once again a net oil importer
Reasons for Decline
• Obsolete technology and lack of technical
expertise
• severe under-investment until early eighties
• First discovered fields such as Daqing(main
oil field) matured
Plans for New Development
• Tarim Basin Fields with estimates of up to
10 billion tons of reserves
• these are very optimistic
• However Daqing Fields may be almost
exhausted
• Hurts their production as old fields are very
close to industrial centers while new fields
require much more transportation
Trends In Petroleum
22
21
20
In % 19
of 18
Total
Crude Oil Production
Crude Oil
Consumption
17
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
15
1987
16
Energy Imports and Exports
12000
10000
8000
Coal Imports
Petroleum Imports
Coal Exports
Petroleum Exports
6000
4000
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
0
1987
2000
Note: Scale in
millions of US dollars
What Does This Mean?
• Coal is plentiful in China so there is no need
to import it
• There is an increase in the aggregate
demand for petroleum
• This has caused a dramatic increase in
petroleum imports
• This could significantly affect world oil
prices
World Oil Prices
China’s Effect on World Prices
• The increase in aggregate demand could
cause a two to three percent increase in
world oil prices
• China is not yet a major factor in these
prices
• Future dependence on Oil could change that
Conclusions
• Coal is and will remain the number one
energy source in China in the foreseeable
future
• Petroleum imports will increase as
consumption increases and national
production stagnates causing possible
effects on world oil prices