July 1, 2010

China: A World Powerhouse

By Sonal Patel

It’s no surprise that China leads the world in recent power capacity additions. What may surprise you is the precise mix of options this vast country is relying upon to meet its ever-growing demand for electricity. As a result, this ancient civilization is fast becoming the test bed and factory for the newest generation and transmission technologies.

Last May, Zhang Guobao, head of China’s freshly formed National Energy Administration (NEA), told attendees at a national work conference discussing the elimination of backward production capacity (that is, small and inefficient boilers and furnaces) that the country’s installed power generation capacity would surpass 900 million kW—900 GW—by the end of 2010 (Figure 1). Fueled by massive capacity additions in hydro and thermal power, the estimate had been revised progressively upward over the past five years. Today, China has almost doubled projections for 2010 that were made in 2006, when 2010 installed capacity was expected to be 560 GW and 2020 capacity was expected to be 950 GW.

1. Runaway capacity. China’s installed power capacity has nearly doubled in the past five years, signifying exponential growth of its power sector. Installed capacity for 2010 is estimated to exceed 900 GW. For comparison, the installed capacity of the U.S. as of June 2010 is approximately 1,030 GW. Sources: China Electricity Council, State Grid Corp. of China, U.S. Energy Information Administration

Zhang went on to chronicle other stunning achievements made during the 11th five-year state planning period (2006–2010): By mid-2009, China’s national grid (lines 220 kV and above) had expanded to 375,000 kilometers (km), taking from the U.S. the title of the world’s largest transmission network. The grid was also the most sophisticated—and efficient: Four ultra-high-voltage (UHV) lines, spanning some 6,000 km, had been completed or were under construction. (Note that China and some industry sources define “ultra-high voltage” as anything over 800 kV. In China, one 1,000-kV UHV AC circuit has been completed, and three 800-kV DC circuits are under construction.) This year alone, generating units with nameplate ratings totaling 70 GW are expected to begin construction, including 45 GW of thermal power projects. These would join projects worth 178 GW already under construction at the end of 2009.

In another world-first, China started building 23 nuclear power units and has more than 30 more in the pipeline.

Annual wind power generation doubled for three straight years to 26 GW, 14 GW of which was added in 2009 alone, on the back of new standard that called for renewables to make up 15% of the country’s total generation profile by 2020.

This overall growth was accompanied by massive investment, Zhang said: According to statistics by the China Electricity Council (CEC), ¥755.84 billion (US$110.67 billion) had been poured into power construction in 2009, ¥371.13 billion for power supply, and ¥384.71 billion to update the grid. And though investments in the thermal power industry shrank from 71.1% of the national total in 2006 to 40.2% in 2009 (at ¥149.21 billion), new projects included units outfitted with supercritical, ultrasupercritical, and carbon capture and storage technologies.

The breakneck pace of development in China’s power sector is directly linked to the country’s booming economy: In 2006 and 2007 the country recorded gross domestic product (GDP) growth of more than 11%, and despite a global economic crisis, its recorded year-on-year GDP increase for the final quarter of 2009 was 10.7%. Yet, the world’s most populous country recorded an average per capita power consumption of 2,332 kWh in 2007, according to the U.S. Central Intelligence Agency’s The World Factbook —five times lower than that of the U.S. (13,652 kWh) and nearly three times lower than South Korea’s (8,502 kWh), Japan’s (8,474 kWh), and Russia’s (6,317 kWh).

This is just the beginning, according to industry sources. In 20 years, China’s power consumption is expected to double, surging to nearly 8,472 TWh (Figure 2), and its power generation capacity is expected to rise to 1,775 GW—almost equal to the current total power capacity of the U.S. and the European Union combined. Consensus is that China is poised to supersede the U.S. as the world’s largest energy-consuming nation.

2. Who consumes China’s power? China’s power consumption shot up 6% last year, compared to 2008, to 3.643 trillion kWh, spurred by a ¥755.84 billion (US$110.67 billion) investment (nearly 20% more than the year before). By the end of 2009, the country’s installed power generation capacity, shown here, was 874.07 GW, an annual increase of 10%. Already in the first four months of 2010, increased consumption (on average 25% per month year-on-year) has been met by increased oil- and coal-fired generation. Officials point out that this not only indicates that the economy is rebounding but also that industrial activity has rebounded. Boosts are particularly attributed to a stimulus-incented increase in public works construction, which requires much steel and cement. Sources: China National Energy Administration, National Bureau of Statistics