China coal closures offset by new nuclear, solar

OREANDA-NEWS. April 23, 2015. Tighter environmental standards coupled with an industrial slowdown in China contributed to 3.3GW of coal-fired capacity retirements in 2014, a government report says.

The retirements come as China prioritizes reductions of particulate air emissions in major metropolitan regions, while aiming to lower its economy-wide energy intensity, or energy consumption per unit of GDP, by 16pc from 2010 levels by the end of 2015, consistent with its current 12th Five-Year Plan (2011-2015).

Retirements in China's coal fleet included targeted closures around the northeastern Beijing-Tianjin-Hubei region, totaling 250MW of outdated coal-fired capacity that went off line in 2014.

China's service sector grew to comprise 48.3pc of GDP in 2014, up from 46.9pc in 2013, the National Bureau of Statistics March report said. The resulting boost to the service sector contributed to a 4.8pc drop in energy consumption per unit of GDP from 2013, as the economy shifted away from energy-intensive industrialized production, and toward on line commercial activity.

Since 2011, China's energy-intensity has decreased by 14.1pc from 2010 levels, all but ensuring the country meets its 16pc reduction commitment this year, the report said.

While coal remains the most significant portion of the national energy consumption mix at 66pc in 2014, alternative energy resources may displace a greater share of coal in absolute terms in the future, the report said. Alternative energy resources, classified as nuclear, natural gas, wind and solar, collectively made up 16.9pc of the national energy consumption mix in 2014.

Nuclear and solar could benefit the most from the retirement of more coal-fired capacity after 2015. China's nuclear generating fleet totaled 21.4GW in 2014, with another 28.5GW being developed across 26 facilities expected to start up by 2020, according to a report released today by the China Nuclear Energy Industry Association. The country expects to add as many as eight new nuclear reactors by the end of this year.

Short-term capacity additions will likely be steered by utility-scale solar growth, China's National Energy Administration said on 20 April. During the first quarter of 2015, the country added more than 5GW of new solar capacity, bringing the country's total to 33GW.

The current pace of growth could result in exceeding the 17GW of new capacity this year targeted under the five-year plan. The next plan, due for release early next year, could contain more ambitious targets if the current growth rate continues, Deutsche Bank analysts said yesterday.

"We expect the Chinese government to further raise the 2020 solar target of 100GW in its new five-year plan, as the cumulative solar capacity could potentially exceed 45-50GW by end-2015," Deutsche Bank said.