China looks to natural gas generation as pollution worries mount

With electricity demand growing dramatically and air pollution concerns once again on the rise, China plans to look into greater natural gas-fired generation capacity, according to Bloomberg.

Gas-fired generation accounts for a minuscule portion of China's power supply, with less than 1 percent of total capacity. According to the International Energy Agency, China drew nearly 80 percent of its electricity from coal-fired power in 2008, with nearly another 17 percent from hydroelectricity.

Both represent their own environmental challenges, since coal produces the most emissions, while the country literally flooded entire cities to create the massive Three Gorges Dam.

In an attempt to address its still-growing pollution concerns, the Chinese government revealed in its latest five-year plan that it intends to impose stricter environmental protection rules, which are expected to dramatically increase demand for natural gas production and imports.

"Gas use in China is really set to take off as they take environmental benefits into account," Helen Lau, an analyst at UOB-Kay Hian Ltd., told Bloomberg. "China is well aware that without gas there will be no sustainable growth."

China Daily notes that the Institute of Public and Environmental Affairs recently released a report suggesting that industrial pollution remains the leading cause of China's smog problems, with the electricity industry accounting for more than one-quarter of all such emitters.

More information on the Chinese natural gas industry can be found at PennEnergy's Research area.

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