"The government is very aware of relying too heavily on coal, because it contributes to the energy security issue and the environmental issue," said Yingling Liu, China program manager at the Worldwatch Institute. Nevertheless, she predicts coal demand will increase in the near and medium term.

"Urban demand has driven the expansion of the heavy industry sector, and this trend will continue in the next two decades. This means that demand for energy, and coal specifically, will increase," she said.

Chinese demand for coal has registered 12 percent annual growth since 2001, and coal makes up almost 70 percent of China's energy consumption, according to a joint report by the Center for Strategic and International Studies and the Peterson Institute for International Economics. According to a separate CSIS report released in October, demand is expected to triple by 2025, particularly due to growth in the nation's electricity sector. And coal demand in China's non-electricity, primarily industrial, sectors is expected to more than double by 2030, according to the Energy Information Agency.

Coal's widespread popularity in China derives from its abundance there. China is the world's top coal producer, providing 40 percent of global supply in 2006, according to BP. Such production is sustained by the world's third-largest share of proved reserves (13 percent of the total), and a healthy reserves-to-production ratio of 48 years.

As such, coal in China is relatively "cheap and stable, so it meets the demand for a reliable and affordable energy supply," said Liu.

This makes coal an attractive alternative to oil in particular, for which China relies heavily on international markets.

Of course, coal reliance has its own drawbacks, including supply shortages in multiple regions due to the mismatch between coal and electricity prices, inadequate transportation infrastructure and insufficient reserves, according to the 2007 China Coal & Mining Expo.

Crucially, the market-driven price of coal has increased while state-regulated electricity prices remain low. This squeezes the profits of coal-fired power plants, many of which have reduced their coal reserves to only a few days' worth. When compounded by transportation snags (and recently, freezing weather), power cuts are the unsurprising result.

But such circumstances are unlikely to diversify energy demand away from coal, particularly since the price squeeze should slacken, said Liu.

"In the short term, (the power plants') profits are being eaten up," she said, "but those coal power plants are major energy players in China and have strong lobbying power to make changes."

As such, she expects the government will gradually unshackle electricity prices to account for the rising cost of coal, despite preoccupation over expanding inflation. China's consumer price index for January was up 7.1 percent year-on-year, according to China's National Bureau of Statistics.

A second drawback of coal dependency is the environmental damage caused by coal's profligate emission of pollutants such as methane, sulfur dioxide and carbon dioxide.

In light of its nation's environmental woes, the Chinese government committed itself in its 11th Five Year Plan to reducing major pollutants by 10 percent as of 2010. And in September, the government pledged to supply 15 percent of China's total energy demand with renewable sources by 2020. Eric Martinot, visiting professor at Tsinghua University, told UPI in November that China will likely meet, if not exceed, its renewable energy targets.

Again, however, there is doubt that coal demand will subside as a result.

Indeed, the CSIS report argues that coal demand will continue to increase rapidly despite developments in alternative energy use, which it posits will offer "only marginal help in reducing Chinese coal reliance to 2025."

Ironically then, despite China's wealth of coal reserves it is possible that supply limitations will constitute the first meaningful roadblock to coal demand.

"Since China became a net coal importer this year, increasing volumes of coal would have to be imported to meet a tripling of use -- and it is questionable where such potentially huge volumes of coal would come from," concluded the CSIS report.

Community
Email This Article
Comment On This Article

Related Links
Powering The World in the 21st Century at Energy-Daily.com

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News