Transformation of Coal Consumption
Year:2017 ISSUE:17
COLUMN:ENERGY
Click:358    DateTime:Nov.30,2017
Transformation of Coal Consumption

By Huang Gesheng, Shi Xiaoyu, Zheng Lijun, Wei Shouxiang,
CNPC Research Institute of Petroleum Exploration and Development

China’s underground coal resources amount to 5 900 billion tons, 94% of the country’s total primary energy resources. The proportion of crude oil and natural gas is however only 6%, and it is hard to increase their output. As a result, coal has always firmly held the position of China’s major energy source. Coal consumption in 2016 was 3.778 billion tons, 62% of the country’s primary energy consumption.

Consumption

In China coal is used mainly in generating electricity, smelting steel, and making construction materials and chemicals. Consumption has increased constantly in the last decade. The consumption was only 1.357 billion tons in 2000, but reached 4.244 billion tons in 2013 with an average annual growth of 9.5%. Consumption declined for three consecutive years during 2014-2016, dropping respectively to 4.116 billion tons, 3.965 billion tons and 3.778 billion tons. Due to slowing economic growth and better protection of the environment, the possibility of coal consumption increasing is rather small. Consumption is forecast to be 4.080 billion tons in 2020 and fall further to 3.600 billion tons in 2030.
The structural capacity surplus of traditional energy sources is quite prominent in China, especially coal. Controlling the total energy consumption is therefore an essential task during the Thirteenth Five-Year Plan period (2016-2020), and coal is a focus. Coal substitution will be implemented in Beijing/Tianjin/Hebei/Shandong, the Yangtze River Delta and the Pearl River Delta. At the same time, energy conservation, emission reduction and reduction of coal consumption will be promoted in high coal-consuming sectors such as iron/steel smelting, the manufacture of construction materials and chemical production. By 2020, coal’s proportion in primary energy consumption will go below 58%.

Opportunities to be put before coal consumption

1. Power demand will be brisk in China, and cleaner power generation from coal will remain a top priority

Clean power generation is the safest, most cost-effective and most environment-friendly mode of coal utilization. According to the “Thirteenth Five-Year Plan for Energy Development” of China, 49% of coal consumption in 2015 was for power generation, and that will reach 55% in 2020 with an average annual growth of 6%. The generation of electricity has been the most rapidly growing use of coal in China for nearly two decades. The average annual growth of electric power demand will be 4.9% during 2010-2020 and 2.3% during 2020-2030. Moreover, sustained technical innovation in recent years has almost achieved zero emission of pollutants from coal-fired power generation. By 2020, average coal consumption in coal-fired generators in China can be kept below 310g/kWh, and below 300g/kWh for new coal-fired generator sets. The emission concentration of SO2, NOx and smog will not be higher than 35, 50 and 10mg/m3.

2. Efforts will be made to increase the proportion of coal for concentrated combustion and reduce the emission of pollutants from coal combustion

In China, concentrated combustion accounts for only 48% of coal consumption. The number of scattered coal-fired facilities with no matched units for the control and treatment of pollutants is enormous. Experts estimate that by comprehensive substitution of electricity, emission of PM2.5 in eastern and central regions of China this year can be around 20% lower than in 2010, and by 2020 it can be 28% lower. Quite a few measures should be taken to greatly increase the use of concentrated combustion to reduce the emission of pollutants from coal combustion. Efforts should also be made to vigorously promote the replacement of coal for scattered combustion by clean energies such as natural gas, power, clean coal and renewable energies and execute industrial coal-fired boiler and kiln renovations to reduce coal consumption and enhance the efficiency of coal utilization.

3. The modern coal chemical industry will become a major breakthrough point

Compared with the traditional coal chemical industry, the modern chemical industry – with coal-to-liquids, coal-to-olefins/aromatics, coal-to-ethylene glycol and coal-to-natural gas as the lead – has seen extremely rapid development. The import dependence of crude oil in China is 65%. Coal-to-liquids is therefore an important supplement to oil products based on crude oil. The import dependence of ethylene and its major derivatives is around 45%, and the import dependence of propylene and its major derivatives is around 30%. So coal-to-olefins has great market potential. The import dependence of natural gas is around 35%. So moderate development of coal-to-natural gas is necessary in regions rich with coal resources but poor in transportation. The import dependence of ethylene glycol in China is around 70%, so development of coal-to-ethylene glycol is in line with market demand.
The consumption of coal resources in China has shifted from the traditional extensive and supply mode to the clean, low-emission and efficient mode and from the use primarily as fuel to equal emphasis on use as feedstock. With the ongoing transformation of China’s economy and energy structure, the proportion of coal in the primary energy consumption will decline, but its position as major energy will not change. The coal industry in China will strive to achieve technology breakthroughs in safe, efficient and smart mining, and clean, efficient and intensive utilization. Merging of coal intensive processing with oil refining, petrochemical and power sectors is a priority to extend the industrial chain of clean coal consumption.