The power sector in China is expected to go through significant changes through to 2030 and will add 88GW of new power plants annually until 2030, according to a new report.
Released by Bloomberg New Energy Finance, the report revealed that over the next two decades China, which is already the world’s largest power generator, is expected to add more than 1,500GW of new generating capacity.
The country will also invest more than $3.9 trillion in power sector assets and its total power sector emissions may start declining as early as 2027, as a result of shifts in generation mix.
Bloomberg New Energy Finance assessed China’s power sector based on four scenarios.
The country’s total power generation capacity in the central scenario, which is dubbed ‘New Normal’, will more than double by 2030, with large hydro renewables contributing more than half of all new capacity additions.
Along with an increase in gas-based generation, this is expected to drive the share of coal-fired power generation capacity down to 44% in 2030 from 67% in 2012.
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By GlobalDataHowever, even in this scenario, coal is set to continue to grow rapidly until 2022, adding on average 38GW annually.
This is said to increase at a much lower rate, installing on average only 10GW annually until 2030.
Bloomberg New Energy Finance country manager and head of research for China Jun Ying said coal looks set to remain dominant to 2030 despite significant progress in renewable energy deployment.
"More support for renewable energy, natural gas and energy efficiency will be needed if China wants to reduce its reliance on coal more quickly," Ying added.
The other three scenarios examined include ‘Traditional Territory’, ‘Barrier Busting’ and ‘Barrier Busting with Carbon Price’.
The forecast of a Chinese carbon price has been produced by Bloomberg New Energy Finance team based on stated national goals for emission abatement to complete the scenario, combining the Barrier Busting scenario with an emissions trading scheme beginning in 2017.
An average carbon price of CNY 99/tCO2e ($16/tCO2e) will result in 23% fewer new coal plants being built compared to the New Normal scenario.
