Chinas Power Shortages Will Worsen Pollution


Reliance on coal returns as booming economy boosts power demand

Worsening power shortages in China's major cities are prompting a return to the traditional reliance on coal-fired generators, a move that is likely to result in further environmental damage across the country, RFA reports.

Douglas Ogden, of the non-governmental China Sustainable Energy Program, told RFA's special correspondent Michael Lelyveld that coal was making a rapid comeback amid soaring demand for power. "It's trying to keep up with just this explosive growth in economic development," Ogden told RFA. "The senior leadership's very concerned."

He said coal production had begun to tail off dramatically in 1996. "But that has turned around and the rate of growth is faster than in any time that we've seen historically in China."

China has spent years trying to cut air pollution from coal in Shanghai and other cities. The government also wants to reduce the damage from acid rain to the nation's water and crops.

In October, a study by the Chinese Institute of Environmental Science and Qinghua University found that acid rain, caused by sulfur dioxide from coal, costs the country 110 billion yuan (U.S.$13 billion) annually. Air pollution costs China as much as two to three percent of gross domestic product per year, according to a report in the official People's Daily newspaper.

Power emergencies could make matters even worse, as generators seek more coal, drawing on China's most abundant fuel. While China's GDP is growing at a rate of 8.5 percent, power consumption rose by over 15.5 percent in the first nine months of 2003, according to the State Grid Corporation. The figure does not include the use of emergency generators, so the real increase is likely to be even higher.

Coal production has been rising even faster at over 21 percent in the first 11 months of 2003. Yet, power plants are demanding even more coal. Many refused to sign agreements for new supplies due to rising prices, leading to rolling blackouts.

In addition to reopening smaller coal mines, officials are tempted to restart many smaller power plants that were previously closed for reasons of inefficiency. Ogden said government had begun to close smaller generation facilities, under 25 megawatts, because they were less efficient, burned more coal per unit of energy, and caused acid rain problems which affected agricultural yields and food production.

"A number of those smaller plants have been reopening in order to take care of those shortages in very local areas... We're very concerned about that," Ogden said.

Experts say China will suffer the environmental consequences of turning back to coal as it tries to keep up with the demand for more power. Although coal output has already soared, many power plants have been running low of coal stocks amid rising prices, energy shortages and higher-than-expected economic growth.

Kang Wu, a China energy expert at the University of Hawaii, said the resurgence of coal would stymie the government's initial tentative steps towards environmental improvements, especially in air quality. "When every bit of coal resources are mobilized to meet the high demand, the situation is getting worse," Wu said. "They already have a low level of washing coal, and now they have less choice for meeting the high demand."

China had hoped that cleaner-burning natural gas would solve some of its pollution and power problems, but so far, gas has done little if anything to help. The government has built a large portion of a 4,000-kilometre West-East pipeline to Shanghai, but commercial sales of gas to power plants have been slow.

Investment in the line, which is due to begin commercial operation at the start of the year, may reach 200 billion yuan ($24.1 billion), including distribution networks. But PetroChina has secured just one of the dozens of take-or-pay contracts it needs to get gas sales off the ground.

Charles Lucas-Clements, gas market analyst at the IHS Energy Group in London, said the switch to gas-burning power stations could take decades, and was highly capital intensive. "I think there's going to be a lot of this type of slippage...they're going to have to resort to these things in between, because the one thing they don't want to do is to drop their growth rate," he told RFA.

"It's just a natural reaction to the inevitable pain period whereby they're growing and not able to fulfill that demand through any other alternative."

He said the Chinese authorities were well aware of the environmental consequences of using more coal to meet the power demand. "I think it's a question of practicality...Everyone's just saying, I can't do it now."


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