Coal lies at the center of China's current energy industry. However, the process of making coal into fuel requires a great deal of water, which presents a developing conflict as the country struggles with an expanding water shortage issue.
Millions of liters of water are necessary each day to extract, wash and process coal in China. Over the years, China's water shortage problems have only grown in size, reports Bloomberg. According to the article, roughly half of the nation's rivers have dried up since 1990, and most of what remains is contaminated.
According to the U.S. Energy Information Administration (EIA), China rivals the world in coal consumption. EIA analysis reveals that China now accounts for 47 percent of global coal consumption - almost as much as the entire rest of the world combined. China's coal demand growth averaged 9 percent per year from 2000 to 2010, more than double the global growth rate of 4 percent and significantly higher than global growth excluding China, which averaged only 1 percent.
Yet, as China continues the aggressive development of its water-intensive coal industries, the resulting drain on resources may prove to be what stunts the growth of its coal-fired power capacity.
"Water shortages will severely limit thermal power capacity additions," Charles Yonts, head of sustainable research at brokerage firm CLSA Asia-Pacific Markets in Hong Kong, told Bloomberg. "You can't reconcile targets for coal production in, say, Shanxi province and Inner Mongolia with their water targets."
Learn more about coal in China with targeted industry reports from PennEnergy Research.