Electricity, new energy, can fish and bear's paw have both
By 2035, the scale of China's power market will surpass that of the United States and Europe combined, and the scale of the natural gas market will be similar to that of the United States, which will force the Chinese government to accelerate the development of new energy sources.
A few days ago, the global market research and analysis company IHS released a research report saying that by 2035, the scale of China's power market will surpass that of the United States and Europe combined, and the size of the natural gas market will be similar to that of the US market, which also forces the Chinese government to accelerate the development of new energy. Regarding the expected high energy prices and costs, IHS believes that China can develop clean energy resources without raising energy prices.
New energy development is imminent
In the past 10 years, China's economy has developed vigorously, and its growth rate has far exceeded that of other countries. Its power infrastructure construction has also achieved good development, which has tripled in the same period. The growth has mainly come from coal-fired power generation. However, as demand continues to rise, the current environmental problems and urban air pollution problems have become imminent, forcing the government to consider adopting cleaner energy sources.
IHS recently completed a study on the future development trends of the natural gas and electricity markets in China’s provinces. The research report is titled "Solving the Tangram" (Chinese translation "Solving the Tangram", which explores the energy supply, demand, cost, and How prices will affect policies and the future development of China's energy industry.
According to the report, China's electricity load has increased significantly in the past 10 years, adding 80GW of installed capacity every year, and the new installed capacity every four years is equivalent to the current installed capacity of Japan, the world's third-largest energy consumer. As coal-fired power generation accounts for the vast majority of the newly installed capacity, power plant exhaust emissions have caused serious deterioration in air quality in many parts of China along with the substantial increase in electricity load, and public complaints have been filled.
The changes are still going on. IHS predicts that structural adjustments in the economic environment and improvements in energy efficiency will slow down future growth in electricity demand. IHS uses scenario analysis methodologies to predict the markets of China’s provinces and cities in three scenarios. Under the scenario of sustained economic growth, China’s average annual power demand growth rate from 2012 to 2035 will be 4.1%, which is only the average of the past 10 years. 1/3 of the growth rate. But looking at the world, this growth is still very strong, because the base of demand is constantly increasing. By 2026, China's electricity demand will double compared to 2012, and the total electricity load will exceed the sum of the United States and Europe by 2035.
IHS believes that this means that China must continue to invest in the construction of new power supply infrastructure, while developing diversified clean energy technologies, such as gas, wind and solar power generation. Although the cost of these new technologies is higher than that of coal-fired power plants, the ever-increasing awareness of environmental protection in the whole society will promote the rapid growth of these clean technologies, especially in coastal high-income provinces and cities. Take natural gas as an example. Due to the high cost of gas-fired power generation and the shortage of gas sources, it currently accounts for only 2% of China's power generation. However, the installed capacity of new gas-fired units will remain at a high speed. Currently, the number of gas-fired units under construction and planning in the country has exceeded 30 million kilowatts, which is equivalent to that of the United States. By 2035, the consumption of natural gas in power generation is expected to increase tenfold.
You can have both fish and bear paws
Many people are therefore worried that the increase in the proportion of these high-cost energy sources in the power system may lead to an increase in the cost of power generation, thus putting pressure on the price of electricity to rise sharply. However, IHS's "Unlocking Tangram" research shows that the continued penetration of these new energy and technologies will not raise China's average power generation cost. "Rising fuel costs, increasing dependence on energy imports, and people’s growing dissatisfaction with environmental quality are all issues that the government needs to address. But for investors, it’s more important to understand that China should not be regarded as a single Energy market.” said Zhou Xizhou, head and head of IHS China Energy Research.
Many provinces in China are equivalent to a single country in the European Union or a state in the United States in population, economic scale, and power system scale. For example, the installed power generation capacity of Guangxi Province is almost equal to the installed capacity of the Netherlands; the coal consumption of the coastal province of Jiangsu is almost equal to the coal demand of Canada. There are also huge gaps in fuel sources and prices between provinces. For example, the current retail price of natural gas in Ningxia, a northwestern province, is almost half that of Beijing.
Zhou Xizhou believes: "The energy market among Chinese provinces will be further differentiated, reflecting the differences in resource endowments, geographic locations, and economic development stages."
Zhou Xizhou said, “China is looking for an energy development path to reduce the power system’s dependence on coal and make more use of clean energy technologies, establish a huge natural gas market to ensure sufficient energy supply, and also hope to maintain energy prices. Not to rise sharply to promote sustained economic growth. “Our research shows that the continued development of cheap resources such as hydropower will offset the pressure of rising costs caused by high-cost power generation technologies such as natural gas and solar energy. Therefore, the pursuit of clean air will not lead to Electricity prices are rising. For China, fish and bear paws can also have both. "Zhou Xizhou said.