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  • Dec 20, 2014
  • Updated: 11:46am
CommentInsight & Opinion

China's coal addiction a threat to its energy security

Joern Huenteler says it must innovate to depart from unsustainable path

PUBLISHED : Wednesday, 14 May, 2014, 10:18pm
UPDATED : Friday, 16 May, 2014, 11:43am

The year 2049, the 100th anniversary of the People's Republic, is a momentous date for China's leadership. When Xi Jinping outlined his vision for the Chinese dream, he picked it to be the year when China will reach the status of a "rich" and "strong" country. As it happens, current trends are that 2049 may also be the year when China runs out of its main energy source: coal.

So far, the government has been too timid in its attempts to cut its dependence on coal in the energy sector and develop meaningful alternatives. Only a grand push for energy technology innovation can set the course for a secure and clean energy future.

Without a policy shift, China will depend on fuel imports for most of its energy consumption

China's coal consumption has grown rapidly in recent years, and is now far larger than anything the world has ever seen, with more than 3.5 billion tonnes per year. Coal provides more than two-thirds of China's total energy, and four-fifths of its electricity. Most of it is mined domestically, making China the world's largest coal producer.

But coal use has its limits; the media have focused on coal's impact on air quality as well as water resources, not just in the coal-mining provinces but also the large cities.

The fact is that the current rate of coal production growth is unsustainable. Data from the World Energy Council shows that China's proven coal reserves will last 34 years given its annual production rates, based on figures for 2011. That is down from about 100 years just a decade ago and means China will have exhausted its reserves by 2049, if it keeps going at the current rate.

The exhaustion of domestic coal reserves will have profound implications for China's economic development and its international relations. The Ukraine crisis offers a glimpse for Chinese leaders into a future they surely want to avoid.

Recent weeks have made it clear that the West's ability to impose sanctions on Russia over its meddling in Ukraine is severely constrained by Europe's dependence on Russia for a third of its oil and gas. China's national security interests therefore call for replacing coal with new, domestic energy sources rather than imports of conventional fossil fuels.

But until now, Beijing's response to unmet energy demand has focused primarily on securing resources overseas, and building infrastructure for imports. China now generates more electricity from imported coal than from nuclear, wind and solar combined. Without a strong, coordinated policy shift, the country will depend on fuel imports for most of its energy consumption by the time it becomes a developed country.

Thanks to the boom in unconventional oil and gas, the US looks set to achieve energy independence in less than a decade. If China wants to follow suit, it has to move rapidly towards the technological frontier in energy technology.

Wind and solar were proven technologies when China started investing on a large scale. The next generation of investments has to chart unproven territory, including shale gas, new nuclear reactor designs, energy storage, offshore wind and geothermal energy.

Whether China can become a true energy innovator will determine the country's economic future. If it is successful, it will ease the country's rise to great-power status and aid the global fight on climate change. If it is not, the Chinese dream might see an unpleasant awakening, as China throws off the shackles of poverty only to see them replaced by the shackles of energy imports that have long plagued Western foreign policy.

An earlier version of this article stated that China’s coal consumption was more than 3.2 billion tonnes per year. It is in fact 3.5 billion tonnes per year.

Joern Huenteler is a research fellow at Harvard Kennedy School's Belfer Centre for Science and International Affairs, where he researches energy technology innovation

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dunndavid
In 1979 US President Carter noted that the US had only 7 years of proven natural gas and consequently the U.S. should prepare for a future of limited energy resources. What they happened is industry saw that proven resources (think inventory) were low which led to higher prices more exploration and replenishment of supply. China will not run out of coal by 2049. China has 35 years of supply. When supply begins to get low, shortages will prompt increased exploration and supply will increase. As for imports, certain locations in China do not have good access to domestic coal supply and these regions (among them Fujian and Zhejiang provinces) will tend to import more coal. Import levels determine on market conditions and will not necessarily increase in perpetuity. There is no inherent advantage to energy independence if this leads to uneconomic use of domestic resources when reliable and more economic imported resources are an option.

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