Energy Use in China: Sectoral Trends and Future Outlook

This report provides a detailed, bottom-up analysis of energy consumption in China. It recalibrates official Chinese government statistics by reallocating primary energy into categories more commonly used in international comparisons. It also provides an analysis of trends in sectoral energy consumption over the past decades. Finally, it assesses the future outlook for the critical period extending t2020, based on assumptions of likely patterns of economic activity, availability of energy services, and energy intensities. The following are some highlights of the study's findings:

• A reallocation of sector energy consumption from the 2000 official Chinese government statistics finds that:
  • Buildings account for 25% of primary energy, instead of 19%
  • Industry accounts for 61% of energy instead of 69%
• Industrial energy made a large and unexpected leap between 2000-2005, growing by an astonishing 50% in the 3 years between 2002 and 2005.
  • Energy consumption in the iron and steel industry was 40% higher than predicted
  • Energy consumption in the cement industry was 54% higher than predicted
• Overall energy intensity in the industrial sector grew between 2000 and 2003. This is largely due to internal shifts towards the most energy-intensive sub-sectors, an effect which more than counterbalances the impact of efficiency increases.
• Industry accounted for 63% of total primary energy consumption in 2005 — it is expected to continue to dominate energy consumption through 2020, dropping only to 60% by that year.
• Even assuming that growth rates in 2005-2020 will return to the levels of 2000-2003, industrial energy will grow from 42 EJ in 2005 to 72 EJ in 2020.
• The percentage of transport energy used to carry passengers (instead of freight) will double from 37% to 52% between 2000 to 2020. Much of this increase is due to private car ownership, which will increase by a factor of 15 from 5.1 million in 2000 to 77 million in 2020.
• Residential appliance ownership will show signs of saturation in urban households. The increase in residential energy consumption will be largely driven by urbanization, since rural homes will continue to have low consumption levels. In urban households, the size of appliances will increase, but its effect will be moderated by efficiency improvements, partially driven by government standards.
• Commercial energy increases will be driven both by increases in floor space and by increases in penetration of major end uses such as heating and cooling. These increases will be moderated somewhat, however, by technology changes, such as increased use of heat pumps.
• China's Medium- and Long-Term Development plan drafted by the central government and published in 2004 calls for a quadrupling of GDP in the period from 2000-2020 with only a doubling in energy consumption during the same period. A bottom-up analysis with likely efficiency improvements finds that energy consumption will likely exceed the goal by 26.12 EJ, or 28%. Achievements of these goals will therefore require a more aggressive policy of encouraging energy efficiency.