China electricity profile implications dramatic shift

Learn more @ www.zpryme.com | www.smartgridresearch.org
December 2011

Zpryme Smart Grid Insights Presents:

China: Electricity Profile
What implications will the dramatic shift in China‟s electricity
cocktail have for the United States and rest of the world?
Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.

China Electricity Profile: What implications will the dramatic shift in China‟s electricity cocktail have for the United
States and rest of the world?

“Coal price growth
has outpaced state
[China] set electricity
tariffs… Electricity
output is falling back
on coal generation's
slow down.”
1 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011

Quote: Ric Deverell, Credit Suisse
Source: Bloomberg, Dinakar Sethuraman, Coal Demand Hurt in China by Low Power Rates, November 18, 2011


China’s Electricity Profile at a Glance

According to the International Energy
Agency‟s World Energy Outlook 2011 by
2015 China will overtake the U.S., and
become the leader in total electricity
generation capacity. What‟s more, by
2035 China will consume nearly 70%
more energy than the United States...
From phasing out incandescent light bulbs within five years
to optimizing the country's clean energy mix, what‟s
extraordinary about China‟s electricity infrastructure is the
speed and scale of its expansion. The solar, wind, coal,
hydro, and related renewable technology and generation
is galloping at a champions pace, surpassing the U.S. and
rest of the world. For example, China has now become the
new world leader in wind power, having overtaken the
U.S., with 40.2 GW (just three years earlier China‟s 2020
wind deployment goal was set at 30GW, currently it‟s a
mighty 200GW) while attracting the highest new financial
investments for two years in a row with $49 billion USD in
renewables, i.e. about a third of total global investments
(since August 2010 China continues to be the most
attractive country for renewable investment, followed by
U.S., Germany, India and Italy).

To meet this electricity cocktail, the Chinese government
has outlined major plans and dedicated billions to
research, design and build a nationwide Smart Grid.
Zpryme projects the total value of China‟s Smart Grid



market to rise from $22.3 billion USD in 2011 to $61.4 billion muffled next year as domestic electricity producers may
USD in 2015, an annual growth rate of 29.1 percent over pay higher rates to import the fuel to develop power and
five years (see figure 1).1 net generous year over year returns. Not helping the
economic energy situation, power providers in China are
Projected China Smart Grid Equipment & Technology Market struggling to recoup their costs as governments restrict
2010 - 2015 | in U.S. billions | CAGR = 29.1% prices to curb inflation, reducing the incentive to boost
Figure 1, Source: Zpryme
$70
$61.4 electricity generation from thermal coal. China may have
$60 to slow imports of the fuel next year after increasing
$49.6 shipments by about 10 percent this year, according to the
$50
$39.2 China Coal Transport and Distribution Association.3 To
$40
$30.1 combat this, China is working diligently to build more, but
$30
$22.3 cleaner, coal-fired power plants to meet the demand. The
$20 $17.1 U.S. is also expected to demand more energy, but is
starting with a smaller base of coal-fired generation
$10
(dissimilar to China, many of the older U.S. coal-fired units
$0 are expected to be driven out of the energy pool in the
2010 2011 2012 2013 2014 2015
two decades).4

Driving the Chinese Smart Grid initiative are technologies What’s Next for China?
in spaces such as solar. Since the Chinese government
announced the “Golden Sun” initiative in 2009 it‟s led in
On January 18, 2011, the U.S. DOE (Department of Energy)
solar investment. Still, the Asian nation is starting to feel the
released a report detailing the substantial progress made
dampness of the solar bubble; more recently, losses for
to date on a number of clean energy initiatives between
China‟s largest solar manufacturers, including Suntech
China and the U.S. Since then, China has been wedged
Power Holdings Co. and JA Solar Holdings Co. may
by negative global economic trends; however the China
continue through next year.2
Electricity Council still projects an increase in electricity
consumption of 8.5% per year.5 The Smart Grid coupled
On the other side of the energy coin, it‟s no surprise that
with next-gen technologies in spaces such as wind will
the world‟s leading emitter of greenhouse gases still relies
overwhelmingly on coal (consuming 3.5 times as much 3 Jakarta Globe (originator: Bloomberg), Coal Prices Not Likely to Recover in 2012 As
coal as the U.S.). Demand for coal in China could be China, India May Limit Purchases, November 27, 2011.
4 E&E Publishing, Joel Kirkland, U.S. and China strive for fruitful but competitive

developments in clean technology, November 29, 2011.
1 Zpryme Smart Grid Insights, China: Rise of the Smart Grid, January 2011. 5 The China Electricity Council said in late October 2011 that China‟s electricity
2 BusinessWeek, Christopher Martin and Zachary Tracer, China Solar Makers Face consumption growth would continue to slow during the rest of this year as the
„Suicidal‟ Prices on Excess Output, November 25, 2011. government is making efforts to save energy and cut emission.



offer a unique paradox for a nation that has not even
skimmed the surface of both emitting greenhouse gasses
and clean-tech preeminence. With Chinese government
cooperation, foreign companies that are quick to
penetrate this market will find that 2012 is the year their
brand become synonymous with the Smart Grid.

Key China Electricity Profile Findings

 From 2010 to 2015, world total electricity generation
capacity is projected to increase by 284 GW, from
4,623 GW to 4,907 GW, respectively. During this time
period, China will account for 63% (179 GW) of the
world‟s increase in generation capacity. From 2010
to 2035, China is projected to account for 39% of the
world‟s increase in generation capacity.
 By 2015, China will overtake the U.S., and become
the leader in total electricity generation capacity.
 By 2035, China will account for a quarter of the
world‟s electricity generation capacity.
 By 2035, China will account for nearly half (49%) of
the world‟s coal fired generation capacity at 1,043
GW.
 By 2015, China will lead the world in the hydro and
other renewable electricity generation, accounting
for 21% (248 GW) of world capacity. This figure is
projected to reach 24% (581 GW) by 2035.
 China‟s wind generation capacity will grow by
1200% from 2010 to 2035, reaching 533 GW by 2035.
LEARN MORE: please see the next several pages for
China projection totals on: electric generating
capacity, coal, renewable, hydro, wind, and solar.



China Electricity
Projections for
Total:
electric generating
capacity, coal, renewables,
hydro, wind, and solar.



Total Electric Generating Capacity Coal Fired Generating Capacity

Projected Total Generating Capacity (GW) Projected Coal Fired Generating Capacity (GW)
2010 - 2035 2010 - 2035
Figure 2, Source: EIA International Outlook, 2011 Figure 4, Source: EIA International Outlook, 2011
8,000 7,272 2,500
6,769 2,129
7,000 6,269 1,968
5,796 2,000 1,810
6,000 5,312 1,627 1,646 1,677
4,907
5,000 1,500
4,000 1,043
962
3,000 1,000 848
670 695 733
1,666 1,817
2,000 1,313 1,492
976 1,118 500
1,000
1,049 1,075 1,085 1,119 1,170 1,221 322 322 323 326 329 334
0 0
2010 2015 2020 2025 2030 2035 2010 2015 2020 2025 2030 2035
United States China World United States China World

Percent of World Generating Capacity Percent of World Coal Generating Capacity
2010 - 2035 2010 - 2035
100% 100%
90% 90%
80% 80% 39% 38% 37% 35% 34% 35%
ROW ROW
70% 59% 59% 59% 58% 58% 58% 70%
60% China 60% China
50% 50%
United 44% 47% 49%
United
40% 40% 41% 42% 49%
States States
30% 20% 21% 23% 24% 25% 25% 30%
20% 20%
10% 21% 20% 19% 18% 17% 17% 10% 20% 20% 19% 18% 17% 16%
0% 0%
2010 2015 2020 2025 2030 2035 2010 2015 2020 2025 2030 2035




Hydro and Other Renewable Generating Capacity Wind Generating Capacity

Projected Renewable Generating Capacity (GW) Projected Wind Generating Capacity (GW)
2010 - 2035 2010 - 2035
2,500 2,372 600
2,209 533
2,054 496
2,000 1,890 500 456
398
1,578
400
1,500 1,300
293
300
1,000 180
581
200 139
156
494 532 119
456 99
500 330
100
157
248
179 184 194 201 205 38 31 51 62 51 54 55 57

0 0
2010 2015 2020 2025 2030 2035 2010 2015 2020 2025 2030 2035
United States China World United States China World

Percent of Renewable Generating Capacity Percent of Wind Generating Capacity
2010 - 2035 2010 - 2035
100% 100%
90% 90%
80% 80%
ROW ROW
70% 70% 62% 61% 62% 62% 61% 60%
69% 68% 66% 67% 67% 67%
60% China 60% China
50% 50%
United United
40% 40%
States States
30% 30% 17% 21% 25% 26% 28% 29%
20% 19% 21% 24% 24% 24% 24% 20%
10% 10% 21% 17%
12% 11% 10% 9% 9% 9% 13% 12% 11% 11%
0% 0%
2010 2015 2020 2025 2030 2035 2010 2015 2020 2025 2030 2035




Solar Generating Capacity

Projected Solar Generating Capacity (GW)
2010 - 2035
Figure 10, Source: EIA International Outlook, 2011 119
120
106
97
100
86

80
62
60

40
25
18 19 20 21
20 9 7 11 11 12 13
3 1
0
2010 2015 2020 2025 2030 2035
United States China World

Percent of Solar Generating Capacity
2010 - 2035
Figure 11, Source: EIA International Outlook, 2011
100%
90%
80%
ROW
70%
66% 69% 70% 71%
60% 74% China
85%
50%
United
40%
States
30%
21% 20%
20% 11% 19% 18%
3%
10% 15%
12% 13% 11% 11% 11%
0%
2010 2015 2020 2025 2030 2035




Zpryme Credits
Editor Managing Editor Research Lead
Robert Langston Sean Sayers Stefan Trifonov

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China electricity profile implications dramatic shift

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