Photo by: Duane Daws
PERTH (miningweekly.com) – China’s demand for coal was expected to continue, advisory firm Wood Mackenzie (Woodmac) said on Monday, as the country was unlikely to meet its environmentally-driven, government target of 200 GW nuclear power capacity by 2030.
A recent report by Woodmac concluded that, while China would make significant progress in its nuclear endeavours, with capacity increasing from 14.6 GW in 2013 to 175 GW by 2030, the inability to meet its targets would translate into opportunities for coal producers to capture additional demand growth.
Woodmac’s head of Asia Pacific gas and power research, Gavin Thompson, said that China's environmental measures would drive notable nuclear capacity growth, while uranium supply would remain available for China.
“However, remaining challenges will result in nuclear falling short of government targets. The government targets 200 GW of nuclear capacity, which would make up 11% of the power generation mix by 2030. In reality, we forecast nuclear capacity to reach 175 GW by then, making up just 10% of the power generation mix: equivalent to a 2.3% annual growth, from 14.6 GW of nuclear capacity in 2013.”
Woodmac forecast that by 2030, China‘s nuclear capacity would account for 30% of the world's total nuclear fleet.
“What is noteworthy about our forecast is that despite environmental measures pushing for a reduction in coal-fired power generation in China, a shortfall in nuclear capacity will create additional opportunities for coal suppliers, on top of coal remaining the dominant source of baseload electricity,” Thompson said.
Woodmac's nuclear generation forecast revealed a 200 TWh gap in baseload electricity supply. The advisory firm stated that coal would meet 125 TWh of the gap while natural gas and renewable energy would account for the remainder.
Though natural gas production and imports would significantly increase, it would be insufficient to prevent coal from accounting for 64% of the power generation mix by 2030.
The report highlighted that although coal’s share would decline from 75% in 2013, owing to the rapid growth in natural gas and renewables capacity, coal would still see net volume growth.
Further, the 1% upside for coal from nuclear not meeting targets would translate to an additional coal demand of 63-million tonnes a year by 2025 and 55-million tonnes a year by 2030.
“Our expectations for a lower level of installed nuclear capacity compared to the government's target are based on a number of factors: operational and siting challenges, constraints on the pace of local nuclear technology development, lack of skilled and trained personnel, lack of supporting infrastructure for uranium fuel fabrication and disposal and a lack of full support by the public in building inland plants. As such, it’s likely that some of the planned and proposed capacity build will be delayed or cancelled,” Thompson added.
“Our nuclear outlook for China reinforces Wood Mackenzie’s view that coal will continue to play a dominant role in power generation in the foreseeable future, even with the successful implementation of new environmental measures. While nuclear will moderate the growth in coal-fired generation, China's coal story is far from over.”