In a warning for Australian coal producers, new data out of China’s National Bureau of Statistics shows that electricity consumption in China was up just 0.3 per cent year on year for the January-February period but coal imports fell 10.2 per cent and coal production declined 6.4 per cent.
Instead, hydro electricity production was up 22.6 per cent, a new record high. On the other hand, thermal power generation through coal and gas was down 4.3 per cent.
Tim Buckley, IEEFA’s Director of Energy Finance Studies, said it was all part of China’s economic transformation.
“Slowing economic growth, reduced energy intensity of economic activity and a rapid diversification in electricity towards renewables, nuclear and hydro electricity generation are combining to rapidly unwind China’s historic dependence on coal,” Mr. Buckley said.
He said China’s efforts to diversify its electricity grid had resulted in a record 32 gigawatts (GW) of wind installations and 18GW of solar installations in 2015.
This new data leaves China on track for coal fired power generation to lose another 2 per cent share in 2016 and to exit this decade with a share below 60 per cent, in line with the Chinese government’s target of just a 50-55 per cent share for coal fired power generation by 2030.
Australia has been China’s largest external source of thermal coal supply.
According to Austrade, coal was the second most important Australian export to China in 2013-14. Coal is worth some A$9.3 billion or about nine per cent of total merchandise exports to China, and more than 23 per cent of all Australian coal exports.