China set to cap coal use, boost domestic oil, gas output

27 April, 2021 12:00 AM printer

Singapore: China is set to cap coal consumption in 2021 by reducing it to less than 56 per cent of the country’s total energy mix, while planning to boost domestic oil and gas output—a set of targets that are deemed easy to meet when overall consumer energy demand recovers from the pandemic-induced economy, industry and market analysts said.

Register Now China’s National Energy Administration on April 22 released the annual Energy Work Guidance for 2021, which aims to manage energy security risks and achieve energy transition to meet the targets of peak carbon emissions by 2030 and carbon neutrality by 2060. The guidelines covered energy structure, supply security, energy efficiency, technology innovation and electricity market reform, report agencies.

Coal accounted for 56.8 per cent of China’s total energy consumption of 4.98 billion mt standard coal equivalent in 2020, according to China’s 2020 Statistical Communique on National Economic and Social Development released by the National Bureau of Statistics on Feb. 28.

The NEA, the country’s top energy planner, aimed to boost the installed capacity of non-fossil power generators, including hydro, wind, solar, biomass and nuclear, to reach 1,100 GW this year. By end-2020, installed capacity of non-fossil power generators stood at 980 GW and is projected to reach 1,120 GW in 2021, according to China Electricity Council.

This suggests that coal power generators’ share in energy consumption will further shrink in 2021, given that installed capacity of coal power generators stood at 1,080 GW in 2020 and had taken a 49.1 per cent share of the country’s energy consumption, the council’s data showed.

The council expects China’s total installed capacity to hit 2,370 GW by end-2021, up 7.7 per cent year on year.

The NEA did not set energy consumption targets for 2021, but the volume is widely expected to rise amid the recovery in economic activity this year and despite efforts to reduce energy intensity. In 2020, it set the target to cap consumption at 5 billion mt of standard coal equivalent.

S&P Global Platts Analytics estimates China’s GDP to grow by 8 per cent in 2021, and it expects the country’s total energy consumption to be able to increase by up to 4.8 per cent year on year. At these rates, the government is still expected to meet its target of reducing annual energy intensity by 3 per cent this year.

The central government in March set a GDP growth target of above 6 per cent for 2021, compared with growth of 2.3 per cent in 2020. In order to meet the 2060 carbon neutrality target, the government vowed to cut energy consumption per unit of GDP by 13.5 per cent by 2025, while targeting a 3 per cent drop in 2021.


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