China to cap energy use marginally above current levels

China's State Council has decided to cap 2015 energy use at levels only marginally above current consumption. This would mean energy demand that had been increasing at 6.6 per cent per annum over 2005 to 2010 would need to decline to 3.5 per cent.

According to a report in the Business Spectator, factoring the expected growth in power from wind, solar, hydro and nuclear would mean an abrupt halt in the growth of coal consumption, which would top out at 4.2 billion tonnes in 2015 (as against 3.9 billion in 2012).

Implementation of such a target, would have far reaching implications for global carbon emissions as also for oil, coal and gas producers.

Interstingly, the growth  of coal consumption in China from 2010 to 2020 has been projected by the international Energy Association to be greater than that of the rest of the world combined. The State Council target would involve stabilisation of China's coal consumption five years ahead of the forecast date and a dramatic decline over past growth.

However, the report says there are plenty of reasons to be highly sceptical of such Chinese government targets because every few months, the Chinese central government comes out with edicts to curb the growth of energy intensive industries. However, industries like cement, aluminium and iron and steel only add extra capacity as provincial governments seem to brazenly flout such directions by the central government.