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Planning Power Generation in China

Friday, April 8th, 2011
power generation in china

The world factory epicenter of China is trying to slow conventional thermal energy consumption while facing a rapid increase of fuel needs due to its fast growing economy.

It thus faces a dilemma of how to keep its economy growing while at the same time cutting back on its dirty fuel consumption of coal. The Chinese government has been trying to reduce the consumption of conventional energy in general, including coal and oil, and hopes to boost the production of cleaner energy sources such as wind energy.

Earlier last year, the Chinese government had announced it would spend 5 trillion yuan (US$755 billion) on clean energy over the next decade, lifting the alternative energy supply to 15 percent of the primary energy demand by 2020 (up from 8 percent in 2009). Mr. Zhang Ping, the head of the top economic planning body, said earlier in January that China had met its five-year target to reduce energy consumption per unit of gross domestic product by 20 percent by the end of 2010.

However, it seems as though the Chinese government has been struggling between the need for rapid power generation and the need for a reduction of its thermal energy consumption. China recently unveiled a raft of targets for its energy and power sectors, including a plan for a fast increase in power generation.

Zhang Guobao, the Vice Director of the National Development and Reform Commission (NDRC), announced China will increase its thermal power generation capacity by 80 million kilowatts this year as thermal power plays an increasingly major role in the country’s power supply. According to this announcement, from 2011 to 2015 China will increase its thermal power capacity by 260 million to 270 million kilowatts. These thermal power projects, which include coal, oil, and gas, will be located in the western region of China where the coal supply is rich. Thermal power generation was at 950 million kilowatts at the end of 2010, and is expected to hit 1440 million kilowatts by 2015 and 1760 million kilowatts by 2020.

The National Development and Reform Commission had mentioned earlier that wind power, one of the main components of alternative energy, should be generating 90 million kilowatts of capacity by 2015. This is only 6.25 percent of the total projected thermal energy generation of 2015, implying that thermal power will continue to play a role as a bigger source of power-generating capacity in the future.

Mr. Zhang emphasized that China had made cuts in dirty fuel-coal use over the last five years by replacing old thermal power plants with environmentally friendly ones, reducing the consumption of more than 300 million tons of coal per annum and an additional 1.5 billion tons of coal overall by pushing clean energy.

Another challenge is that China’s oil demand is higher than coal. The oil demand hit a record high in 2010, rising by 13.9 percent in November. Gas demand is also rising fast as rural households join in using gas by 2015, thereby pushing rapid gas production as well.

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