China's energy use to slow: report
Updated: 2014-01-31 11:32
(China Daily USA)
While China will be the key global energy consumer in the next 20 years, its continuing surge in energy demand will most likely start to ease off towards 2035, leading a global slow down of energy consumption growth, a new report finds.
"The growth of energy demand slows successfully by the decade as we go further out, and the biggest source of that slow down is China," said Mark Finley, general manager of global energy markets and US economics at BP Americas.
"We believe that China will reach a point where the economic development will begin to shift from high energy-intensive export-led growth to less energy-intensive domestic consumptions of goods and services," explained Finley, presenting the BP Energy Outlook 2035 report at Columbia University's Center on Global Energy Policy Wednesday night.
Energy intensity is the energy consumption per unit of gross domestic product (GDP), an index measuring energy efficiency. Lower energy intensity means it takes less energy to produce one unit of GDP, in other words, more energy efficiency in economy development.
The report, published in mid January, forecasts a 41 percent rise in global energy consumption from 2012 to 2035, with annual growth of 1.5 percent, with 95 percent of the growth expected to come from non-OECD economies, with China and India making up more than half of the increase.
The report points out that industry remains the dominant source of growth for global primary energy consumption by sector, which accounts for more than half the growth of energy consumption between 2012 and 2035. It reflects the unprecedented pace and scale of industrialization in Asia.
However, as China's rapid industrialization phases out, energy for global industry growth will slow to just 1 percent annually from 2025 to 2035, decreased from the 2.6 percent annualized growth from 2005 to 2015, the report forecasts.
The deceleration of coal consumption growth is another major driver for the decrease in total energy demand growth in China.
"Coal's contribution to (energy consumption) growth diminishes rapidly. It is currently the largest source of volume growth, but by the final decade coal adds less volume than oil and is only just ahead of hydro," the report says. "Again, this reflects the shift away from coal-intensive industrialization in China."
While China, which accounts for half of the world's coal consumption, is expected to remain the largest coal consumer in 2035, the demand is likely to see a decline starting in 2030.
"Between the slowdown of the demand and a more diverse slate of power generation coming in — more nuclear, more renewables, more natural gas — we find that coal consumption growth actually stops," Finley emphasized.
Compared with global coal consumption, which expectedly grows at 1.1 percent annually, oil consumption sees an even slower growing trend from now to 2035, with 0.8 percent annual growth.
However, China will be a major driver of the demand increase in the case of oil. It is projected to surpass the US as the world's largest importer in 2015 and largest oil consumer by 2029.
"China's import requirement is projected to more than double from today's levels to almost 14 Mb/d, or 75 percent of (global) demand, a level and share of demand higher than the US at its peak," the report says.
On the supply side, the report predicts China to be considered the most promising country for shale growth outside North America, accounting for 13 percent of world shale gas growth. By 2035, China and North America will make up 81 percent of world shale gas production.
"We have both shale gas and tight oil production in China making a material contribution to China's energy mix," said Finley. "It grows rapidly, but not to the game-changing degree that we've seen in the United States."
Given the uncertainty of shale gas production, such as policy, regulations, infrastructure and technology, Finley said that BP believes that the Chinese government is very enthusiastic about its development, but its assumption of the BP forecast is relatively moderate.
"Some people are more optimistic, some are more pessimistic. We will just have to let time go by to learn more about it," Finley said.
Zhang Yang contributed to this story and can be reached at email@example.com.