Page 17 - AsianOil Annual Review 2021

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growth, a sentiment echoed by the observers. economy planner, announced on June 11
State-run Sinopec has forecast that gas con- that solar and wind power would enjoy
sumption will rise by 9-12% this year to 350- price parity with coal-based grid supplies.
360 bcm, with gas-fired power and industrial The commission pointed to industrial
demand expected to drive that growth. breakthroughs and plummeting develop-
The vice-president of state-run PetroChina’s ment costs as having allowed solar and wind
gas sales unit, Hou Chuangye, predicted in April power installations to achieve fundamental
that gas demand would grow by 9-10% this year conditions of grid price parity.
to around 350-356 bcm. The National Energy Administration (NEA)
Hou said demand from gas-fired power has set a target for solar and wind power output
generators was anticipated to grow in the to account for 11% of total power consumption
future as they served as back-up to growing this year, up from 9.5% in 2020.
base-load renewables capacity. The exec-
utive added that his company would work What next
more closely with the country’s state-owned The central government has pushed coal-to-gas
power majors to boost gas-fired power conversion for years, first by striving to improve
production. urban air quality and then as part of Beijing’s
China Electricity Council (CEC) has esti- wider carbon emission goals.
mated that installed gas-fired power capacity will That push has seen the conversion millions
reach 150 GW by 2025, from 105.8 GW in May. of coal boilers often outpace the development
of the country’s gas storage and transportation
Green ambitions capacity. This has led to shortfalls in supply, with
China has had to rethink its demand forecasts in industrial consumption sacrificed in colder
the wake of Chinese President Xi Jinping’s pledge weather to ensure homes do not freeze.
in September 2020 that the country aimed to hit While gas demand is expected to continue
peak emissions in 2030 before achieving carbon growing until 2035, the country’s longer-term
neutrality by 2060. energy outlook will more heavily depend on
The country’s energy planners had widely renewable energy solutions. Moreover, it is pos-
expected gas demand to climb to 700 bcm by sible that as this transition gains steam – and
2050, Hou said in April, noting that Xi’s pledge the energy security advantages of greater green
had prompted this figure to be revised down to energy consumption become readily apparent
around 535-605 bcm by 2030. to both government and industry – that Beijing
Renewable energy supplies are expected to may set even more ambitions targets in its quest
fill the gap going forward, with the government to reduce its fossil fuel consumption.
having unveiled plans last month that pave the The risk of such a political shift will likely
way for solar and wind power to compete against come to weigh on investment decisions in
coal without government subsidies. new regional LNG capacity, given expansion
The National Development Reform plans in the Middle East, North America and
Commission (NDRC), the country’s top Africa.™

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