China’s Overall Energy Balance

Updated on 07.21.2021

High School

10 min read

China has undergone dramatic changes since the 1980s. From a closed and failing communist economy, the country has opened up to globalization, taking on a major place in trade with all regions of the world and becoming an economic and geopolitical “superpower”. This transformation has seen a surge in demand for energy – a trend not likely to change any time soon.

© STR / AFP - Hydropower is one of the strong points in China’s energy mix. The country is continuing to add new facilities. Pictured here is the construction of a dam at the Baihetan site in Yunnan Province (southwest China).

Maintaining Growth, Reducing CO₂ Emissions

China’s must meet two contradictory requirements: ensure that growth remains higher than that of other major countries, and reduce greenhouse gas emissions to comply with international climate agreements.

Despite the uncertainties created by the Covid-19 pandemic, growth is expected to exceed 8% in 2021, according to International Monetary Fund (IMF) estimates (compared with 4.5% for Europe). This means that energy consumption is likely to continue to rise at an annual rate of 3% or 4%.

At the same time, China has set truly ambitious climate targets for the first time. It now aims to “peak” its emissions before 2030 and to become carbon neutral by 2060 (Europe has committed to do the same by 2050).

This situation means that even though China is developing renewable energies, nuclear power and electric mobility at a tremendous pace, it still cannot curb the rising use of fossil fuels, especially .

65% 
The share of coal in China’s electricity generation.

Coal’s Continued Dominance

China’s economic leap was powered by coal, a resource that the country has in abundance. Not only does China produce the most coal worldwide (it holds the second-largest coal reserves after the United States), it imports more than any other country too, including India. The proportion of coal used in generation is over 65%, compared with 1.8% in France and 30% in the United States.

China is still building many coal-fired power plants, but they are smaller and more efficient than older facilities. They are also located further away from urban areas to reduce pollution, which is now a health hazard for many city dwellers.

Half of the world’s renewable energy facilities commissioned in 2020 were in China.

Renewable Energies

China’s willingness to use renewable energies cannot be called into question. According to the latest report¹, China alone accounted for half of the 280 gigawatts of new capacity commissioned in 2020.

The sheer size of the country and its huge industrial capacity allow China to develop immense solar and wind farms.

China also boasts the largest hydroelectric capacity in the world, symbolized by the giant Three Gorges Dam on the Yangtze River, which came on stream between 2006 and 2009. Its capacity is estimated at 22,500 megawatts. (By comparison, the largest French plant, Grand’Maison, has a capacity of 1,800 megawatts).

But, as in all countries, the ramp-up of renewable energies, especially intermittent ones such as wind and solar, cannot happen overnight. China estimates that non-fossil fuels (wind, solar, hydro, nuclear) will account for roughly 20% of its by 2025.

Oil and Gas

China is not a major oil and gas producer. But it has become the world’s leading oil importer. While gas currently makes up just over 5% of the country’s total consumption, its imports are accelerating, and China will become a decisive player in the global market in the coming years.

Such oil and gas dependency has a strong influence on geopolitics. China is strengthening its military fleet and investing in many of the world’s economic hubs. It is also building numerous land and sea transportation links with Africa, the Middle East and Europe (the “New Silk Roads”) to secure its supplies while further developing markets for its products. In addition, it is increasing gas purchases from Central Asia and Russia to diversify its suppliers.

Nuclear Power

China has embarked on a long-term nuclear development plan. At the end of 2019, it had 47 reactors in operation, with a combined of 49 gigawatts. In comparison, France has 56 reactors in operation, with a total capacity of 61 gigawatts. China wants to go further and is targeting 150 to 200 gigawatts by 2030, representing around half of current global installed nuclear capacity. Despite such ambitions, nuclear power will only represent 6% or 7% of its total electricity generation, versus 4% today.

Source: