New trends in China energy

consumption

Coal consumption: Outlook changed completely in

a few short years

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2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Mto

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China coal use vs. IEA forecast (Dec 2014)

Data IEA forecast NEA forecast (Apr 2016)

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China coal imports vs. Peabody projection (2012)

Data Peabody: low Peabody: high

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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China's implied coal consumption vs. IEA 450ppm scenario

(12-month sum)

Net Imports Production

Stock changes Consumption (Implied)

Consumption, IEA 450ppm scenario

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13 4 1927

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Thermal power Hydropower Wind Solar Nuclear Demand

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Growth in electricity generation by source

2015

2016H1

What does consumption-driven growth mean for energy use?

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Light industry Chemicals Cement&Glass Iron&Steel Non-ferrous metals Other heavyindustry

Services ResidentialConsumption

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ded

Direct energy use intensity by sector

Coal and coke Petroleum Electricity Other energy

Calculated from China Energy Statistical Yearbook 2015

Heavy industry sectors will have to adjust to lower levels of investment in real estate, industrial capacity and infrastructure, and to saturated export markets industrial coal consumption will continue to fall

Lots of room to strengthen targets

Implications for air pollution:Industrial clusters still dominate emissions (SO2,

2014-2015 average)

DU

>50% of oil consumption tied

to heavy industry,

<20% to passenger transport

Legend

Linked to overcapacity sectors

Linked to consumer demand

Oil use declines with energy system modernization

Others

Oil refining11%

Chemicals12%

Construction materials

4%

Other industry11%

Construction7%Agriculture

4%

Transport: Gasoline10%

Transport: Diesel23%

Transport: Kerosene5%

Buildings3%

Others10%

Breakdown of China's oil consumption by sector (2014)

Outlook for oil

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2008 2009 2010 2011 2012 2013 2014 2015

煤电投资泡沫

发电总量，亿千瓦时

火电发电量，亿千瓦时

火电容量, 万千瓦

利用小时(右纵轴)

合理的容量水平*

*基于5000小时利用率

Key messages

• Coal is in structural decline

• Era of fast CO2 growth is over; timing of CO2 peak depends

on success in clean energy growth and transitioning to

economic “new normal”

• Economic restructuring is an enormous opportunity for

climate, environment and improving living standards

• But: overcapacity and downscaling of the heavy industry

complex present enormous institutional challenges

• Incredibly and unexpectedly fast progress in reducing

emissions gives China a once-in-a-lifetime opportunity to

play a key positive role in international climate policy

Thank you!