Energy demand set to decline as economic growth slows

More efficient use of fuel will also be a driver behind decrease, says economist

BEIJING - China's growth in energy demand is expected to drop to 1.9 percent a year between 2021 and 2030 from the average annual increase of 9 percent in the decade ended 2010, according to Christof Ruehl, group chief economist at BP PLC.

The decline will be driven mainly by China's slowing economic growth and improved energy efficiency, Ruehl said at a news briefing on Tuesday.

There's a wide consensus among observers that China's GDP growth will drop below 9 percent in 2012. That's because the ongoing European debt crisis and weak economic recovery in the US will drag on the country's exports. The Chinese economy grew by 9.2 percent in 2011.

Ruehl said that China has reached its peak period for rapid growth in the heavy industry sector, and the share of industry in GDP will decline and gradually be replaced by the service sector as the economy matures amid structural economic transformation.

That will result in accelerating energy intensity and a constrained increase in domestic energy demand, he said.

BP's revised Energy Outlook 2030 predicts that non-fossil fuels - including renewables, hydroelectric and nuclear power - will account for a growing proportion of China's energy growth. It will rise to 44 percent during the period 2020 to 2030 because of the country's rising reliance on fossil-fuel imports and environmental challenges.

According to BP's estimates, China's oil-import dependency will grow rapidly to 80 percent by 2030, from more than 50 percent at present, while its reliance on gas imports will reach 42 percent.

China may also turn from being a coal exporter to an importer by 2030, even though the country will see a notable slowdown in the demand for coal.

The fuel's contribution to primary energy growth will fall to 13 percent in the period between 2020 and 2030, from 48 percent between 2010 and 2020 as its use in power generation declines.

China Daily

(China Daily 02/15/2012 page15)