China is expected to spend more than $3.9 trillion on installing 88 GW of new power stations every year between now and 2030 – and more than half of them will be hydropower plants, according to new research.
A report released by Bloomberg New Energy Finance says that China could annually install the equivalent of the UK’s total generating capacity, adding more than 1500 GW in the next two decades.
And as a result of these significant changes in its energy mix, China’s total power sector emissions could start dropping by 2027, the report claims.
BNEF analysed China’s power sector based on four scenarios, with its ‘Central’ scenario being the most likely to happen.
In this, China’s total power generation capacity more than doubles by 2030, with renewables including large hydro contributing more than half of all new capacity additions.
The report states that this hydro boom, coupled with an increase in gas-fired generation, would drive the share of coal plant capacity down from 67 per cent in 2012 to 44 per cent in 2030.
Yet BNEF stressed that “in absolute terms, coal will continue to grow rapidly until 2022, adding on average 38 GW per year – equal to three large coal plants every month”.
“It will then grow at a much lower rate, installing on average only 10 GW per year until 2030. Carbon emissions and local environmental problems resulting from coal, such as poor air quality will likely continue to worsen in the next 10-15 years despite the shift towards cleaner energy sources.”
Jun Ying, country manager and head of research for China at BNEF, said: “China has started to change course towards a cleaner future. But despite significant progress in renewable energy deployment, coal looks set to remain dominant to 2030. More support for renewable energy, natural gas and energy efficiency will be needed if China wants to reduce its reliance on coal more quickly.”
Milo Sjardin, head of Asia Pacific at Bloomberg New Energy Finance, added that the future of China’s energy sector “depends on a number of big questions, questions on which one can still only speculate: the cost at which China may be able to extract its shale gas reserves, the potential impact on fracking and thermal generation of water constraints; and potential accelerations in climate and environmental policy, including a potential price on carbon”.
Yet the significance of China’s energy consumption growth and its evolving generation mix will be felt around the globe, stressed Michael Liebreich, chief executive of Bloomberg New Energy Finance. “It is hard to underestimate. The impacts will reach far beyond China and have major implications for the rest of the world, ranging from coal and gas prices to the cost and market size for renewable energy technologies – not to mention the health of the planet’s environment.”