China’s energy consumption grew at 1.5 percent in 2015, the lowest growth rate since 1998, according to the BP Statistical Review of World Energy.
In 1998, China had an economy that was ten times smaller,Shanghai’s Pudong business district was a ghost town, Hong Kong had just been handed over by Britain, there were no high-speed trains, a million rural villages had yet to be demolished, hundreds of cities and districts didn’t exist yet, Alibaba was one year away from being founded, Starbucks had zero stores, and nearly 350 million peasants had yet to urbanize. At that time, China was just beginning its historic era of rapid economic growth; now, the country is showing signs of leveling off and maturing.
Throughout China’s economic boom period, energy use and corresponding energy capacity skyrocketed. In 1999, China’s total energy consumption was 934.7 million tones oil equivalent (Mtoe). By 2014, this increased to 2,852.4 Mtoe. While total installed energy capacity grew from just 66 GW in 1980 to around 1,800 GW today.
This was a pattern of growth that the country seemingly expected to continue, with predictions being cast just a couple of years ago positing that energy capacity would double by 2030 to meet ever-increasing demand. The wind, solar, hydro, and coal industries banked on China’s continuously growing thirst for more and more energy, and all rushed to pump out as much capacity as possible.
In 2012, coal-fired energy capacity was slated to be increased by 75 percent, tacking on another 557 GW from 363 new power plants, as the country’s coal consumption was expected to keep growing.
This didn’t happen. China’s coal usage now appears to have peaked in 2011 — a decade earlier than expected — and since 2013 has been in decline. In 2015, coal consumption dropped 2 percent, year on year, according to the BP report.
Of all of China’s energy sectors, it is coal that is being hit the hardest, with rapidly proliferating renewables cutting away at its market share, central government policy aiming to lower consumption, and demand for additional energy beginning to stall. Current estimates claim that China now has a massive energy oversupply glut, with upwards of 200 GW of this coming from redundant coal-fired energy capacity — which, for scale, is one-sixth the total energy capacity of the USA.
As China’s annual GDP growth rate continues its descent, power-hungry industrial operations keep closing down or moving offshore en masse, and the economic transition to a service and information based economy rolls on, the growing need for additional electricity has started to taper off. However, we should keep in mind that China’s central government is intentionally trying to lower energy use and the country’s energy consumption growth rate last year still amounted to more than any other country in the world.