Natural gas demand in China will peak in 2040 at just under 606 billion cubic metres (bcm), according to CNPC’s think tank, the Economic & Technology Research Institute (ETRI). Projections were slashed from earlier highs at 650 bcm but ETRI still views gas as vital for China’s green transformation with 70 percent of gas demand growth set to come from the power sector.
Advantages of gas-fired power plants are their capability to respond rapidly to load fluctuations to manage intermittency. According to ERTI data, it takes just 9 to 10 minutes for Chinese gas peaking plants to start up and reach full load – which combined with short construction periods and less land and water requirements makes them more attractive than other fossil-fuelled power stations.
But the cost of gas as a fuel sources is comparatively high, and the core technology of China-made gas turbines still lags behind international levels, ETRI concedes, suggesting this has hampered the switch to gas-fuelled power generation to some extent in China. In the medium- to long-term, gas is projected to account for up to 12 percent of the country’s primary energy mix – substantially less than the current 27 percent – as the rapid build-out of wind and solar power sources can also be backed up by coal-fired peaking plants.
Non-fossil energy consumption is set to expand at a much higher rate than fossil energy, with the growing contribution of renewables allowing China to become increasingly self-sufficient. Come 2040, non-fossil energy is expected to make up more than have of China’s energy mix and much of that renewable energy will be used to make green hydrogen. Already in 2023, China consumed over 36 million tons of hydrogen and demand could reach between 70 million and 120 million tons by 2060, with up to 85 percent of that volumes produced via electrolysis from wind and solar power.
The remaining backbone of fossil power station will likely be retrofitted with carbon capture, utilisation and storage (CCUS) technology to achieve the government’s carbon neutrality target. ERTI analysts reckon China’s use of CCUS technology could capture between 1.4 million tons and 2.1 million tons of carbon dioxide by 2060, potentially used for enhanced oil recovery or as a feedstock for the chemical industry.
Looking ahead, analysts at CNPC’s think thank are convinced that only an integrated development of fossil and green energy sources can build a new and stable energy system for the Peoples’ Republic.
