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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?
Learn more @ www.zpryme.com | www.smartgridresearch.org
December 2011
Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
1 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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.”
Quote: Ric Deverell, Credit Suisse
Source: Bloomberg, Dinakar Sethuraman, Coal Demand Hurt in China by Low Power Rates, November 18, 2011
2 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
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
3 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
market to rise from $22.3 billion USD in 2011 to $61.4 billion
USD in 2015, an annual growth rate of 29.1 percent over
five years (see figure 1).1
Driving the Chinese Smart Grid initiative are technologies
in spaces such as solar. Since the Chinese government
announced the “Golden Sun” initiative in 2009 it‟s led in
solar investment. Still, the Asian nation is starting to feel the
dampness of the solar bubble; more recently, losses for
China‟s largest solar manufacturers, including Suntech
Power Holdings Co. and JA Solar Holdings Co. may
continue through next year.2
On the other side of the energy coin, it‟s no surprise that
the world‟s leading emitter of greenhouse gases still relies
overwhelmingly on coal (consuming 3.5 times as much
coal as the U.S.). Demand for coal in China could be
1 Zpryme Smart Grid Insights, China: Rise of the Smart Grid, January 2011. 2 BusinessWeek, Christopher Martin and Zachary Tracer, China Solar Makers Face
„Suicidal‟ Prices on Excess Output, November 25, 2011.
muffled next year as domestic electricity producers may
pay higher rates to import the fuel to develop power and
net generous year over year returns. Not helping the
economic energy situation, power providers in China are
struggling to recoup their costs as governments restrict
prices to curb inflation, reducing the incentive to boost
electricity generation from thermal coal. China may have
to slow imports of the fuel next year after increasing
shipments by about 10 percent this year, according to the
China Coal Transport and Distribution Association.3 To
combat this, China is working diligently to build more, but
cleaner, coal-fired power plants to meet the demand. The
U.S. is also expected to demand more energy, but is
starting with a smaller base of coal-fired generation
(dissimilar to China, many of the older U.S. coal-fired units
are expected to be driven out of the energy pool in the
two decades).4
What’s Next for China?
On January 18, 2011, the U.S. DOE (Department of Energy)
released a report detailing the substantial progress made
to date on a number of clean energy initiatives between
China and the U.S. Since then, China has been wedged
by negative global economic trends; however the China
Electricity Council still projects an increase in electricity
consumption of 8.5% per year.5 The Smart Grid coupled
with next-gen technologies in spaces such as wind will
3 Jakarta Globe (originator: Bloomberg), Coal Prices Not Likely to Recover in 2012 As
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. 5 The China Electricity Council said in late October 2011 that China‟s electricity
consumption growth would continue to slow during the rest of this year as the
government is making efforts to save energy and cut emission.
$17.1 $22.3
$30.1
$39.2
$49.6
$61.4
$0
$10
$20
$30
$40
$50
$60
$70
2010 2011 2012 2013 2014 2015
Projected China Smart Grid Equipment & Technology Market
2010 - 2015 | in U.S. billions | CAGR = 29.1% Figure 1, Source: Zpryme
4 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
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.
5 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
China Electricity
Projections for
Total: electric generating
capacity, coal, renewables,
hydro, wind, and solar.
6 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
Total Electric Generating Capacity
Coal Fired Generating Capacity
1,049 1,075 1,085 1,119 1,170 1,221
976 1,118 1,313 1,492 1,666 1,817
4,907 5,312
5,796 6,269
6,769 7,272
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2010 2015 2020 2025 2030 2035
Projected Total Generating Capacity (GW)
2010 - 2035 Figure 2, Source: EIA International Outlook, 2011
United States China World
21% 20% 19% 18% 17% 17%
20% 21% 23% 24% 25% 25%
59% 59% 59% 58% 58% 58%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020 2025 2030 2035
Percent of World Generating Capacity
2010 - 2035 Figure 3, Source: EIA International Outlook, 2011
ROW
China
United
States
322 322 323 326 329 334
670 695 733 848
962 1,043
1,627 1,646 1,677 1,810
1,968
2,129
0
500
1,000
1,500
2,000
2,500
2010 2015 2020 2025 2030 2035
Projected Coal Fired Generating Capacity (GW)
2010 - 2035 Figure 4, Source: EIA International Outlook, 2011
United States China World
20% 20% 19% 18% 17% 16%
41% 42% 44% 47% 49% 49%
39% 38% 37% 35% 34% 35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020 2025 2030 2035
Percent of World Coal Generating Capacity
2010 - 2035 Figure 5, Source: EIA International Outlook, 2011
ROW
China
United
States
7 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
Hydro and Other Renewable Generating Capacity
Wind Generating Capacity
157 179 184 194 201 205 248 330
456 494 532 581
1,300
1,578
1,890
2,054 2,209
2,372
0
500
1,000
1,500
2,000
2,500
2010 2015 2020 2025 2030 2035
Projected Renewable Generating Capacity (GW)
2010 - 2035 Figure 6, Source: EIA International Outlook, 2011
United States China World
12% 11% 10% 9% 9% 9%
19% 21% 24% 24% 24% 24%
69% 68% 66% 67% 67% 67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020 2025 2030 2035
Percent of Renewable Generating Capacity
2010 - 2035 Figure 7, Source: EIA International Outlook, 2011
ROW
China
United
States
38 51 51 54 55 57 31
62 99
119 139
156 180
293
398
456
496 533
0
100
200
300
400
500
600
2010 2015 2020 2025 2030 2035
Projected Wind Generating Capacity (GW)
2010 - 2035 Figure 8, Source: EIA International Outlook, 2011
United States China World
21% 17% 13% 12% 11% 11%
17% 21% 25% 26% 28% 29%
62% 61% 62% 62% 61% 60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020 2025 2030 2035
Percent of Wind Generating Capacity
2010 - 2035 Figure 9, Source: EIA International Outlook, 2011
ROW
China
United
States
8 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
Solar Generating Capacity
3 9 11 11 12 13
1 7
18 19 20 21 25
62
86
97
106
119
0
20
40
60
80
100
120
2010 2015 2020 2025 2030 2035
Projected Solar Generating Capacity (GW)
2010 - 2035 Figure 10, Source: EIA International Outlook, 2011
United States China World
12% 15% 13% 11% 11% 11%
3% 11%
21% 20% 19% 18%
85% 74%
66% 69% 70% 71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020 2025 2030 2035
Percent of Solar Generating Capacity
2010 - 2035 Figure 11, Source: EIA International Outlook, 2011
ROW
China
United
States
9 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | December 2011
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?
Zpryme Credits Editor
Robert Langston
Managing Editor
Sean Sayers
Research Lead
Stefan Trifonov
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