Coal for power generation is still the main coal consumption force

As a big energy consuming country, coal will still be the main energy source in the future, but its proportion in energy will decrease slowly. Recently, the China Coal Industry Association issued a report pointing out that due to the increase of uncertainties in economic development at home and abroad, the progress of science and technology, the state's management of the atmospheric environment, energy conservation and emission reduction, and the increasing substitution of non-fossil energy for coal, the growth rate of coal consumption will decline this year.

Double replacement of energy structure accelerated

On February 28, the National Bureau of Statistics issued the Statistical Bulletin of National Economic and Social Development in 2018. According to preliminary calculation, the total energy consumption of the whole country in 2018 was 4.64 billion tons of standard coal, an increase of 3.3% over the previous year. Coal consumption accounted for 59.0% of the total energy consumption, down 1.4 percentage points from the previous year; clean energy consumption, such as natural gas, hydropower, nuclear power, wind power, accounted for 22.1% of the total energy consumption, up 1.3 percentage points.

According to the Revolutionary Strategy for Energy Production and Consumption (2016-2030), issued by the National Development and Reform Commission and the State Energy Administration, the utilization of renewable energy, natural gas and nuclear energy continued to increase from 2021 to 2030, while the utilization of high-carbon fossil energy decreased significantly. Total energy consumption should be controlled within 6 billion tons of standard coal, non-fossil energy accounts for about 20% of total energy consumption, natural gas accounts for about 15% of total energy consumption, and new energy needs mainly depend on clean energy; carbon dioxide emissions per unit GDP decreased by 60%-65% compared with 2005, and carbon dioxide emissions reached the world average level around 2030.

"In the next five years, China's demand for major energy-consuming products such as steel, non-ferrous metals and building materials is expected to reach a peak, and energy consumption will decline steadily." Zhang Feilong, director of the Institute of Coal Easy, said that under the combined effects of slowing economic growth and accelerating structural transformation and upgrading, the growth rate of energy consumption is expected to drop from an average of 9% per year since the 12th Five-Year Plan to about 2.5%. Zhang Feilong believes that the 13th Five-Year Plan period is the decisive period for China to achieve the target of 15% non-fossil energy consumption, and also the key period for the peak carbon emissions around 2030. The proportion of coal consumption will be further reduced, the proportion of non-fossil energy and natural gas consumption will be significantly increased, and the dual replacement process of oil and gas as the main energy substitute for coal and non-fossil energy as the substitute for fossil energy will be accelerated.

Coal consumption by electricity is still the main incremental force

China Coal Industry Association pointed out that the long-term development trend of China's economy has not changed this year, and the economic growth is changing to high-quality development, which will further stimulate energy demand. The proportion of electricity in the end energy consumption is increasing, and the demand for electricity and coal is expected to increase.

Last year, China's coal consumption increased slightly, with the national coal consumption increasing by 1% year on year. According to the estimates of China Coal Industry Association, in terms of major coal-consuming industries, the power industry consumes about 2.18 billion tons of coal a year, the iron and steel industry consumes 620 million tons of coal, the building materials industry consumes 500 million tons of coal, the chemical industry consumes 280 million tons of coal, and other industries consume about 60 million tons of coal.

"Capital underpinnings, supporting electricity growth to maintain stability." Zhang Feilong pointed out that last July, the meeting of the Political Bureau of the Central Committee had put forward the idea of "making up for shortcomings in infrastructure". It is expected that this year, the counter-cyclical regulatory role of infrastructure investment will be enhanced, and the growth rate will gradually pick up, which will provide support for the overall growth of electricity consumption. It is noteworthy that the growth of electricity demand remains resilient under the optimization of power consumption structure. In the Annual Report of 2018 on Power Coal, the Institute of Coal Industry of Yichang analyzed that during the 13th Five-Year Plan period, the industrial structure of our country changed more obviously than in the previous five years. The proportion of the secondary industry in the economic structure dropped from 47% to 40%, and that of the tertiary industry increased from 45% to 51%. There are two main points in the growth attributes of the electricity consumption of the third generation and urban and rural residents, which are different from those of the second generation. First, the rising trend is obvious. As long as the social and technological level is improving and the living standard of the residents is improving, the energy consumption of the third generation and urban and rural residents is in the rising trend. Second, the cyclical fluctuation is weak, and the energy consumption of the second generation is different from the economic cycle, investment cycle and production capacity. The influence of multiple factors in the cycle, the third-generation and urban and rural household electricity consumption are less affected by factors, and the cyclical fluctuation is weak. Therefore, the growth of electricity consumption for the three industries and urban and rural residents is resilient, which gradually strengthens the resilience of driving the growth of electricity consumption for the whole society. Overall, under the general trend of clean energy utilization, the growth rate of wind power, solar power and nuclear power will keep high growth on the basis of current energy pattern change, and the proportion of wind power, solar energy and nuclear power will continue to increase, but the overall increment is limited due to the low base. Therefore, even though the share of thermal power in the power generation structure has declined steadily, absolute power generation still maintains a steady growth trend. Zhang Feilong expects power generation to grow by 5% in 2019 and coal consumption in the power industry to increase by 66 million tons. The proportion of coal consumption in coal chemical industry increased steadily

China's fossil energy endowment is rich in coal, lack of oil and less gas, and the development of coal-to-oil and other coal chemical industries is an important part of China's coal resource utilization. Relevant data show that coal consumption in the coal chemical industry has maintained a positive growth trend, and the proportion of coal consumption in the country has gradually increased.

In 2017, the coal consumption of traditional coal chemical industry was about 130 million tons, and that of new coal chemical industry increased by 15 million tons to about 45 million tons, totaling 17.5 million tons, accounting for 5% of the total coal consumption, up by 1 percentage point compared with 2016.

At present, 208 modern coal chemical engineering projects are registered in China.