Energy & Resources, Talking Point

Letting off steam

A new study on China’s reliance on coal-fired power hits the headlines

Letting off steam

Greenpeace activists protest against carbon emissions at a power station west of Beijing

As Britain’s more environmentally conscious citizens were hauling their newspapers and empty bottles down to the recycling bins earlier this month, some might have been wondering if it was even worth the bother.

That’s because the news was out that China’s top three power producers (Huaneng, Datang and Guodian) are emitting more greenhouse gas than the entire UK economy.

The revelation was part of a Greenpeace report focusing on China’s leading power firms. Suddenly, that trip to the bottle bank seemed just a little bit trivial.

But the Greenpeace study also pointed to China’s continued reliance on coal as its primary source of energy. China already uses more coal than the United States, Europe and Japan combined, which helps to make it the world’s largest emitter of the gases now warming the planet.

And news last week of Yanzhou Coal’s almost $3 billion bid for Brisbane-based coal miner Felix Resources shows there is little sign of the national appetite for coal abating.

The Greenpeace report sounds like a depressing one.

One that is hard to ignore, certainly. It also highlights China’s critical role in global greenhouse gas reduction.

But Greenpeace was clever to create a headline to grab public attention. Not that it has worked as well in China itself. WiC could track down only one mention, in which Time Weekly reported a response from Li Jung Feng, a vice director of energy research at the National Development Reform Commission.

Li accepted the report’s underlying details. But he argued that the comparison was a flawed one. China’s top three power firms provide 30% of the nation’s power, so they are serving close to 400 million people. Contrast this with the UK population (at 61 million, around half that of a Chinese province like Henan) and the headline seems a lot less insightful. Notably, the media coverage in the UK almost completely overlooked the per capita emission comparison too.

But China is still a coal junkie?

Absolutely. It is the world’s largest coal producer and its largest consumer too. Coal is the one natural resource that China has plenty of and it relies on it to fuel economic growth. HSBC estimates that power generation absorbed at least half of the total 2,700 million tonnes of coal consumed last year. Steel production comes in second at 17%.

In fact, 80% of the country’s power generation is coal-based, something that the International Energy Agency says is twice the international average. Beijing’s National Energy Administration (NEA) is seeking to get this down to 60%. Sun Qin, vice head at the NEA, told an energy forum in Guangzhou recently that a new policy announcement is also imminent, in which the utilisation of clean coal technologies will be prioritised.

So technology is the answer?

It may be one of them, especially in the use of more efficient pressurised combustion at power plants. This should lead to reductions in coal consumption per unit of power generated, as well as lower emission levels.

In fact, China’s top 10 power producers have already met their first targets in reducing average coal consumption per kilowatt hour of energy produced. The plants using the newest technology can convert as much as 44% of the energy in coal into electricity. That’s a huge improvement on previous performance and is even a few percentage points better than their US peers.

But the problem is that the new plants make up only about 60% of the recent boom in power station construction. The remainder of investment has been going into cheaper, steam-turbine generation. As a result, the per-kilowatt carbon dioxide emission among the 10 power companies is still much worse than in other countries – 20% worse than the US, for example, and 80% worse than Japan.

But aren’t the oldest power plants being closed down too?

Yes, the government has been trying to shut down the worst polluters. Greenpeace applauded the decommissioning of 54 gigawatt (GW) worth of older capacity since 2006, an equivalent to Australia’s entire grid. A further 31GW will be shuttered in the next three years – to add up to about 10% of current generating capacity and a loss of at least 400,000 jobs, says Xinhua.

The initiative, the Programme of Large Substituting for Small in policy-speak, has parallels on the coalfields themselves, says the National Business Daily, where the government is determined to reduce the number of mining operators.

In particular the coal heartland of Shanxi is being forced into consolidation. The province started the process in 1999 with close to 6,000 registered mining operators. By 2015, Beijing wants there to be no more than 800.

The belief is that larger players will be more professionally managed and easier to regulate. Shanxi provincial officials will hope so too. Newspaper coverage of local environmental degradation and mining disasters has been high profile, and some counties have had trouble filling official posts. No one wants to be at the helm when news of the next calamity comes through.

But larger firms should also be more capable of investing in cleaner production, like coal washing (a grinding of coal into smaller pieces via a process called gravity separation at the coal mouth) which offers significant environmental gains in reduced transportation costs, increased capacity to produce power, and lower emissions. The smaller firms do not have the capital to make similar investments. They tend to be the ones extracting the lowest quality coal too.

So bigger is better as far as coal’s environmental impact is concerned?

For the firms mining the coal, as well as those that end up generating power with it, the government seems to think so.

But we should temper unrealistic expectations of environmental excellence. The Time Weekly article reports that the 10 power companies all declined to comment on the Greenpeace study, for instance.

More significantly it looks unlikely that any of them will hit the central government’s target of 3% of power from non-hydro renewable sources by next year.

This only underlines coal’s continuing dominance, despite growing talk of China’s potential leadership position in the renewable energy sector. So, with the country’s energy demand on the rise too, we can only hope that China will be depending on coal in a more environmentally effective way in future (see WiC24, page 10).

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