China Faces Coal Supply Shortage

July 25, 2005 Updated: August 25, 2015

China Energy Network (China5E.com) recently published a report which quoted experts’ forecast that the current 2 billion tons of annual coal production is a maximum for China. The report also states that China will face a great shortage of coal supply by the year 2020, and that China must seek alternative energy resources immediately.

The report quoted Mr. Sha Yiqiang, an engineer from the China Electricity Council, that the most recent statistic shows that China’s total coal reserves are at about 190 billion tons. At the rate of 5 billion tons of coal consumption every year, China’s coal reserve could last less than 40 years.

Mr. Mao Yajie, deputy secretary of China Society for Hydropower Engineering, commented that more than 70 percent of China’s total electricity supply is generated by thermal power. The accelerating economic development has brought on a strong demand for electricity, which has in turn put pressure on coal and electricity supplies.

The report indicated that even if China’s coal supply was the highest in the world, it would not be enough to meet the demand. For example, as of April of 2004, coal stock was at about 98 million tons, which is the lowest reserve in the past 20 years. By May of 2004, the coal inventory in many electricity producers’ warehouses would only supply the electricity plant for eight days. As a result, many electricity producers were forced to search for coal supplies on the market.

The report stated that the pressure of high demand forced the electricity and coal production to run beyond capacity, and caused many mine accidents in recent years.

In order to resolve the issue, Mao said hydropower should become the main source for China’s electricity supply. In addition, nuclear energy and wind power could also be important alternative energy resources.

However, experts are not optimistic about the development of these alternative energy resources. Mao said the initial investment requirement for nuclear energy and wind power is quite high, and the development of these alternative energy resources rely heavily upon government support. However, the official Chinese economic plan does not provide enough such support.

By the year of 2020, the government planned production will be hydropower production of 100 million kilowatts, wind power at 20 million kilowatts, and solar energy at 1 million kilowatts, which will not meet the projected demand.