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For an economy that is growing as fast as China, the need fro energy is always paramount. China’s fast-paced economic growth has rendered the nation tot be highly in need of reliable energy sources. Currently, coal-produced energy is the main source for Chain, making up to 70% of the country’s energy need. This is convenient for China because it is the world’s highest producer of cola. However, give the fact that coal is not a renewable source of energy, there is a need to make sure the country has secured its energy for future purposes. At the same time, coal is not environmentally sustainable as it leads to massive damage to the environment. China also has high levels of oil reserves that it has not exploited use, in the hope to use this as a sour of energy in case of an energy crisis. It imports its oil from different countries around the world. The recent addition of hydroelectric power to the power grid has helped in making sure that the countries energy future si secured, both in terms of energy availability and also its sustainability. China should explore this more and add more dams such as the three gorges dam as well as expand its solar and wind energy. This will not only increase its energy sources, but will also increase the environmental sustainability of its energy.
China is not only the worlds largest country by population, it is also the worlds fastest growing economy. Despite the fact that the per capita consumption of energy is much lower than in developed countries such as United States of America, France, United Kingdom, Germany and Canada, the national power consumption in China is much higher than for any of these countries. For instance, despite the fact that the per capita energy consumption in China is 1806.8 kilograms of oil equivalent (kgoe) compared to that is Canada which is a whopping 7379.6 kgoe, the national consumption of energy for China is still uses more than that of Canada. This is because China has a population that is more than ten times that of Canada, or any other developed nation. China’s energy sector is not the most efficient, however. For example, it still depends on coal-fired electricity production (World China Para 2). Despite China having many oil and gas reserves, it has not been able to explore this. China is the largest world consumer of coal-powered electricity and the words second largest exporter of coal. Its energy is over 70 percent dependent on coal. However, in the recent years, the country has tried t diversify its energy production to renewable sources, and this has been possible through investing in large hydroelectric power stations, such as the seven gorges dam. Regardless of this, the major source of energy in China, both for domestic and industrial uses still comes from coal. China is both an exporter and importer of energy. Its main energy exports are from cola and its main imports is oil and gas.
China’s Total Current Energy Needs
China is one of the highest producers of electricity in the world. It produces 5,583 Mtoe (Million Tonnes of Oil Equivalent) of electricity per year, by 2015. The United States of America which produces 4,330 Mtoe is the second largest producer and consumer (Year Book Para 2). However, china’s energy consumption is lower than this and therefore has a surplus of energy than tit exports to other countries. For instance, while its power production of over 5,000 Mtoe, its consumption is only 3,034.
China’s Energy Mix
The energy mix in china continues changing due to several factors such as government policy and the fact that the country is among from traditional non-renewable spruces to the modern renewable sources such as hydroelectric. The three gorges dam as a great improvement in reshaping the power grid for china. However, the country’s energy mix remains the same as it has in the last over fifty years.
Coal – 66%
Hydrochloric power -08%
Nuclear energy -1 %
Other renewable -1%
Oil -20 %
The above figures are for 2014. Of course, there has been a few changed as the county’s energy mix continues to change over time. It is good to note that china imports most of its oil for energy production. This means that the 20% making up its total energy mix is dependent on imports (Lam Para 7). With regard to china’s energy exports, it is also good to note that it mostly exports raw energy and not ready to use energy. Fro instance, with regard to exporting, china exports raw cola as opposed to electricity produced using coal.
Where China’s Energy Is Obtained
As indicated, the main source of energy for china is coal-generated electricity. This serves both the industrial needs as well as the domestic needs, especially in cities. Most people who live in rural areas in chain do not use electricity because they are not connected to the power grid. While the largest source of energy in china is coal-generated electricity, the country also uses a significant amount of energy from the oil and gas. It only produces 4% of the total oil and gas that it consumes. China consumers a whole 8% of the total oil produced in the world and imports it from over ten countries. Its main oil imports come from Angola, but also imports from countries as far as Brazil and Venezuela.
Energy imports versus exports
China spends 833.3bn Yuan ($128 billion in US dollars) for import of energy and earns (Statista Line 8 Table 1). While the main energy import from china is coals, this is not sustainable because of a number of issues. First, it is necessary to note that china and the rest of the world is moving from coal as a source of energy due to its massive negative impact on the environment. As a result, while china is the largest exporter of coal, these imports will continue to decline over the next few decades. In fact, the decline can already be felt in china today. The value in the Chinese currency had also affected the coal imports and exports between China and the rest of the world. For instance, the devaluing the Yuan can meant that china was better off importing coal than when exporting it (McFarlane Para 5). China has an opportunity to export oil, but due to China’s strategic petroleum reserve policy, it has not exploited its oil reserves which are in billions of barrels. The country continues to stand with this measure for its one energy security in the future.
Projections/ China’s Energy production and consumption future
As already identified, china’s main source of energy in the current time is electricity produced from burning of coal. In 2014, it accounted for over 65% of china’s energy. It is estimated that in 2016, the total contribution of coal to Chinese energy production stands at over 70%. Oil is the second highest source of energy for china. It is good to note that even oil, just like coal, it not only non-renewable, it is also environmentally unsustainable. As a result, it is necessary to assume that in the future, coal will not be the main source of energy for china. Neither will gas and oil.
One of the major pointers that indicate that the current energy mix in china will have to change is the massive investment in hydroelectricity power plants as well as the solar and wind energy. Currently, despite the fact that china depends mostly on coal as a source of energy, China is the global leader for wind energy and solar power installations. As this trend continues, china will continue reshaping its energy mix to align itself with the current environmental needs for sustainable and renewable energy. Currently, china has the highest per capita carbon and greenhouse gas emission, despite the fact that it has the some of the lowest per capita energy consumption. The main reason for this discrepancy is the fact that most of China’s energy is used in the industrial sector and not in the domestic sector. This means that the energy consumption in China cover not only the over 1.2 billion people who live in China, but also billions of other people who live outside china but use products manufactured in china. To turn this high levels of carbon and greenhouse gas emissions, china will have to reshape its energy. In the future, the main energy source for china will be hydroelectric energy.
China had a very crucial opportunity to clean up its energy as it has massive natural resources such as rivers that can be used for hydroelectricity production. Currently, even in the consideration of the three gorges dam hydroelectric power plant, China only uses a fraction of its total capacity for hydroelectricity production. The three gorges dam can be seen as the pioneer project that has shown the potential for China to utilize the available natural resources to create new energy for its domestic as well as industrial use. In the next twenty years, projects such as the seven gorges dam will transform the energy mix in china.
Solar and wind energy will also enter the grid and become significant contributors to the national power and energy grid in china. While the solar energy in China is not a big promise due to the fact that China does not have a lot of natural resources to support solar energy production, the wind energy resources in chain are abundant enough. It is however necessary to note that china has been reserving its oil resources and this will mean that when it chooses to use these oil reserves, the contribution of oil and natural gas to the Chinese energy mix will go up. As of now, oil and natural gas only contributes about 20% of the Chinese energy needs.
China imports most of this oil and natural gas from other counties and only produces a very small percentage at home. The idea is to make sure that in the future, if their is energy crisis, the nation will have the capacity to provide its big industrial sector with energy to continue running the economy. China also has a high capacity for geothermal power production that has not yet been property exploited. Although the geothermal capacity is not high enough to because the major source of energy in china, it is big enough to provide an alternative for other non-renewable and environment unfriendly energy sources such as oil and gas. The Yangbajain Geothermal Field is a good example and provides a good opportunity
Recommendations regarding future energy security
China has one way to go in order to achieve a proper energy security in the future. First, it needs to be able to utilise the natural resource such as dams, wind and solar. Although the nations has been doing this for some times now, it needs to do more, especially with regard to its hydrometric power. For instance, china’s installed hydropower capacity is 280 GW while its hydropower generation is 1,064.34 TWh. In this regard, the best energy mix for china in the future to make sure that the county has energy security for its future will be as follows;
Hydroelectricity will be of big advantage for china’s energy source for three major reasons. First, as the hydroelectricity power grid increases, the overall cost of electricity production will increase and this will save the country a lot in fiscal terms. Secondly, as the world moves towards clean and sustainable energy, the cost of producing unclean and unsustainable energy will go far. Getting away from coal as the major source of energy will therefore be a big many saver for china. At the same time, there is the issue of job creation. Developing hydroelectricity will help the country to produce productive job opportunities for many Chinese who are jobless. This will have reverberating positive impacts to the economy.
The second source of energy fro china in the future should be geothermal energy. Like hydroelectricity, it is renewable and has very little environmental impact compared to other sources such as coal and oil. Given the fact that china had many opportunities for the growth of the power, it will be necessary to make sure that these resources are well utilized to make sure that the country can move away from its current energy mix which is mainly dominate by non renewable and environmentally unsustainable sources. Other renewable sources of energy should form a composite contribution to china’s energy mix.
It is also necessary to note that coal is not likely to disappear very fast and will continue to be a major part of he energy mix in china. However, this does not mean that it has to remain the major contributor of energy in the country. China should look to reduce its contribution as much as possible and replace this gap with renewable sources such as hydroelectricity as well as geothermal and wind. In the next 20 to 50 years, china’s energy mix should be as follows;
Coal – 20%
Hydroelectric power -50%
Other renewable sources (wind, biomass, and solar) -15%
Oil -5 %
The above energy mix will have not only economic advantages for china, but also no economic benefits such as improved national heath due to less pollution. It will also give the nations an added advantage in that it will have most of its energy sources being renewable, meaning that it will not have to worry about running out of energy. For instance, even though climate changes can shift the capacity of most of its hydroelectric power plants, this will not be as serious as having its coal reserves being depleted and therefore leading to an energy crisis. Laghoth china has lots of oil and natural gas reserves, they are also easy to deplete and cannot promise a good future with regard to energy security, not to emotion that they are also harmful to the environment. The need to phase of nuclear energy is also high and china should replace it with the other non-risk energy sources such as wind and hydro power.
Break down estimate to realize the recommendations
To be able to realise the above recommendations, china will need massive investments in trsm of dollars. It is necessary to note that these investments cannot be done in one or two years but eed to be implemented over a period of several decades. China has been investing heavily in energy security, but it needs to invest even more.
To increase its hydroelectric power production to the point of making it to be the nation’s lardiest source of energy, china will have to invest massively in fiscal terms. It needs to invest in over 20 more large-scale hydropower projects in the next 20 to 50 years. Construction of large-scale hydropower can also for over ten years, and this means that it will need to carry out most of these projects concurrently. For example, the construction of he seven gorges dam took 18 years and cost US$27.6 billion. China will need to construct over 20 dams of these nature size and production capacity in order for the country to be assured to energy security the future. In this regard, the total cost for hydropower will be around US$552 billion in the next 30 to 50 years.
China will need to be able to implement more geothermal power plants, not only as a way of security its energy, but also as a way to clean its energy. As a result, it will need to be able to invest a lot in the geothermal sector. It will need a minimum of 30 more geothermal power plants in the next 20 to 50 years.
Estimated cost for geothermal development can be based on the Yangbajain Geothermal Power Station in Tibet which cost 1.9 million U.S. dollars and has a capacity of 25,181 kW. To build another 20 of this, it will cost 38 million US dollars in the next 30- 50 years.
Other renewable sources (wind, biomass, and solar)
China will also need to invest a lot of money in other renewable sources of energy sot ht it can exploit them and have a way to make sure that it not only has energy security but also that it has energy cleanliness. These other sources of clean energy such as wind, solar and biomass do not necessarily provide a way to become the main sources of energy, but when exploited affectively, they can provide a composite source of energy that will make a bog part of china’s energy mix. In this regard, china needs to gear up its investments in this are in order to make sure that there is a way to achieve positive outcomes with its energy. To maximally exploit these small but important sources of energy, the country will need to invest at least 50 million of American dollars.
It is good not note that these figures are not adjusted for implementation and changes in currency over the next fifty years when the project will have to be carried out. However, they give and estimate that is worthy of consideration for china as it seeks to not only clean up its energy mix, but to also achieve energy security in the future and this avoid an energy crisis for its fast growing industry. It is also necessary to note that apart from the government, the private sector is also involved in the development of power. As a result, the burden does not rest entirely on the government as a source of capital to make these recommendation be achieved.
What the government need to do is to ensure that it has put in place the right incentives that will encourage private developers to be involved in the development of new and sustainable energy power plants. However, the government would be careful to note that energy security is not just about the availability of the energy, but also the cost. For example, even when there is enough energy but the cost is too high, this will still lead to energy insecurity and crisis. This is why the Chinese government should be careful in involving the private sector in the development of energy resources because these private firms are profit inspired which means that they can hike the prices of energy with every opportunity they get to maximize their profits.
Breakeven point from these investments
As identified, these investments will not be carried out in one batch but will be implemented one by one. In this case, determining the break-even point for all these projects would not be feasible. However, it is feasible to argue that most of them will break even within ten years after the completion of the project.
China’s economy is growing at a very high rate, which means that the need for energy is also growing at an alarming rate. Two main concerns about china’s energy is the fact that over 70%, which is not good given the fact that this is a non-renewable, source of energy as well as harmful to the environment. China however has massive opportunities in that it has many large rivers which can be used for generating hydroelectric power. However, developing hydroelectric power plants is an expensive endeavour that costs a lot of money ad takes up to decades before any power come from them. China should have a fifty-year plan on increasing its hydroelectric power production. It should also consider exploring other clean and renewable energy sources such as biomass, solar and wind energy.
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