IEA: China shifting its energy future to cleaner mix

BEIJING -- According to the International Energy Agency (IEA), China is changing and its energy future promises to be quite different from its energy past. The country is quickly changing course in the direction of a much more services-based economy and a much cleaner energy mix.

Since China’s economy continues to grow rapidly, at an average rate of 4.5% per year, this equates to an improvement of 3.4% per year in energy intensity, the fastest rate of improvement seen worldwide in our projections to 2040. Per-capita energy consumption also grows, by one-quarter through to 2040, overtaking that of the European Union by around 2035.

China’s growing energy needs are increasingly met by renewables, natural gas and electricity while coal demand falls back.

The rise of electricity and of renewables are closely interlinked as China diversifies and cleans up its power mix – the share of coal in total generation falls from two-thirds today to less than 40% in 2040 as a result.

Natural gas demand rises to over 600 billion cubic metres (bcm) by 2040, making China the second-largest market globally behind the United States and the largest source of global gas demand growth: the share of gas in China’s primary energy mix rises from under 6% to over 12% during this period.

China’s coal- and oil-fuelled rise over recent decades has had a major impact on its environment and public health, as local air quality in many of its major cities deteriorated. The path to cleaner air promises to be a long one, but efforts to “make the skies blue again” are now a central focus for government policy.

By 2040, almost half of China’s population will live in areas where air quality is compatible with the National Ambient Air Quality Standard, although vulnerability to the health impacts remains substantial because of urbanisation and an ageing population.

In the case of CO2, only transport sector emissions do not peak before 2040, with this milestone achieved in the power sector just after 2030, and earlier in buildings and industry.

The peak in national CO2 emissions, although not pronounced, comes against a backdrop of continued strong economic growth, reflects a profound policy effort that touches all parts of the energy sector.

Consumption of coal and oil are cut significantly compared with our main scenario and the share of low-carbon generation in the power sector rises to above 90% by 2040 (compared with around 50% in our main scenario). By 2040, in the Sustainable Development Scenario, nearly all the population live in areas where air quality is compatible with the National Air Quality Standard, up from 36% today.

Shanghai's Caojing gas turbine power plant uses clean natural gas to generate power.