(Bloomberg) -- For those dismayed at the searing heat afflicting much of the planet, some sobering news from the world's biggest coal industry: the dirtiest fossil fuel will remain China's mainstay source of energy for a decade or more.
“Coal's dominant role is unlikely to change in the next 10 to 15 years,” Zhang Hong, deputy general secretary of the China National Coal Association, told a briefing on Wednesday.
China, which produces more than half the world's coal, has said consumption won't peak until 2025. By that time, annual demand will have risen 4% to 4.3 billion tons, according to Zhang. In 2030, the nation will still be burning some 4 billion tons of the fuel, scarcely less than is being used now. And as the government opens up even more mines, capacity is likely to be kept well above projected demand at 5 billion tons, he said.
For all of China's massive build-up of clean energy, climate action remains hostage to energy security, particularly after last year's crippling power shortages and the spike in prices caused by Russia's invasion of Ukraine.
At the same briefing, Wang Zhixuan, an official with the China Electricity Council, called the inherent intermittency of renewables a “gray rhino,” or an obvious but neglected risk, that could topple the grid if coal isn't there as a backstop. “Safely switching energy is the basis to phasing out coal,” he said, and the country's climate goals can't be achieved by “one-time fixes.”
In the meantime, the fuel's importance only grows. Capital spending on thermal power generation rose 72% in the first six months of the year, according to the CEC, dwarfing other energy sources. And more projects are on the way as the authorities speed up new approvals. The nation's biggest coal producer said last week that net income could increase by as much as 60% in the first half.
Events Today
(All times Beijing unless shown otherwise.)
- Bloomberg China economic survey for July, 10:00
- China Photovoltaic Industry Association hosts online briefings on supply chains and industry outlook, day 2
- Fourth Future Energy Convention in Beijing, day 2
- SMM's International Aluminum Summit, Suzhou, day 2
- USDA weekly crop export sales, 08:30 EST
Today's Chart
China's mortgage-payment crisis and Covid lockdowns will lead to cuts in steel output and a cut in emissions in the near term, according to Bloomberg Intelligence. But steelmakers' deteriorating profits also mean they'll have less capital to invest in low-carbon production. The steel sector is one of the biggest polluters and key for China to achieve its emissions targets.
On The Wire
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The Week Ahead
Friday, July 22
- China weekly iron ore port stockpiles
- Shanghai exchange weekly commodities inventory, ~15:30
Saturday, July 23
- Jinan Solar Expo 2022, day 1
Sunday, July 24
- Jinan Solar Expo 2022, day 2
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