January 28, 2011 / 5:03 AM / 7 years ago

UPDATE 2-China to import more fuels despite clean energy drive

* Net coal imports to continue growing after record purchases

* Power use to grow at a slower pace of 9 pct this yr

* Starts building 20 GW hydropower this yr, 10 pct of total

* Adding one-third of wind power capacity in 2011 (Write through, add comments on coal, solar)

BEIJING, Jan 28 (Reuters) - China will ramp up conventional fuel imports and production to power its economy in 2011 despite accelerating efforts to develop clean, renewable and alternative energy.

The National Energy Administration (NEA) estimated on Friday that energy demand in the world’s second largest economy will increase steadily but the growth could moderate from last year.

It did not provide an estimate of overall energy demand this year or energy used last year.

“China’s net coal imports hit 146 million tonnes in 2010. It could keep increasing in 2011,” Wang Siqiang, deputy head of general affairs department under the NEA, said in a quarterly press conference.

“Australia, Indonesia, South Africa, Columbia and Russia will continue increasing their percentages of exports to China along with their rising coal output in 2011.”

China will speed up construction of 14 domestic coal producing bases this year, new coal production capacity will come into use in major producing provinces including Shanxi and Inner Mongolia, and some railways will be upgraded and put into operation, Wang said.

China is the world’s largest coal producer and consumer of coal. Coal makes up about 70 percent of China’s primary energy consumption and around 80 percent of its electricity output is generated by burning the carbon-intensive fuel.

Power consumption growth will rise at a slower pace of about 9 percent this year, easing off a 14.6 percent expansion last year, according to the administration.

Electricity consumption is expected to reach 4.5 trillion kilowatt hours (kwh) in 2011, versus 4.19 trillion kwh last year.

The NEA said apparent oil demand increased 12.3 percent from a year earlier to 449 million tonnes in 2010, or 8.98 million barrels per day. It did not provide a forecast for 2011.

China’s crude oil imports surged 17.5 percent from a year earlier to a record 239.3 million tonnes or 4.79 million bpd in 2010 while domestic crude production also gained an unusually fast pace of 6.9 percent to a record high of 203 million tonnes, official data has showed.

The agency forecast rapid growth in aviation fuels as China continues to build and expand airports, while demand for gasoline may be curbed due to traffic control and fuel-efficiency measures.

Diesel consumption will grow steadily on the back of demand from agriculture, industry, infrastructure, logistics and transportation, it said.

CLEANER FUEL PUSH

The NEA said natural gas consumption would rise about 20 percent to 130 billion cubic metres (bcm) in 2011, while natural gas output would increase 16 percent to nearly 110 bcm, suggesting the country would have to import some 20 bcm of natural gas during the year.

But the estimate could be an underestimate as China is aggressively promoting the lower-carbon fuel with a goal to triple its consumption in the next decade.

China shipped in 4.4 bcm of pipelined gas from Central Asia in 2010 and nearly 13 bcm of the fuel in the form of liquefied natural gas (LNG) from other countries.

China National Petroleum Corp (CNPC) said it would receive 17 bcm of gas from central Asia this year.

Two LNG terminals built by a subsidiary of the top Chinese oil and gas firm were expected to be operational before the summer, which would boost China’s capacity to receive the super-chilled gas by nearly 10 bcm per year.

Under an intensified drive to boost non-fossil fuel use in total energy use, China is accelerating building hydropower projects with a plan to start constructing 20 gigawatts of capacity this year, or one tenth of its total installed hydropower capacity of about 210 GW.

China, which already boasted the world’s largest wind power capacity of 41.8 GW by end of last year, plans to add another third, or 14 GW of new capacity, this year, NEA said.

But wind power capacity with grid access totaled only 31.07 GW at the end of 2010 after connecting 13.99 GW of wind farms to grid networks last year, according to NEA.

The country will also start operating a new reactor in the Ling‘ao nuclear power plant in southern Guangdong this year, raising nuclear capacity to 11.74 GW by year end.

China is the world’s largest nuclear building site, with 28 reactors totaling 30.97 GW under construction at the end of last year.

The NEA said 500 megawatts (MW) of solar power capacity will be added this year, after China installed 400 MW of new capacity in 2010 and raised total capacity to 700 MW at the end of last year. (Reporting by Jim Bai, Judy Hua and Chen Aizhu; Editing by Michael Urquhart)

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