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China’s 2014 energy targets

Oilfield Technology,

The Chinese NEA’s 2014 energy targets and policies do not contain any significant deviations from past policy announcements. However, in some cases they reflect an intensification of previously announced targets. The targets for the natural gas, coal and renewables industries indicate that the government are pursuing its overriding policy priorities relatively aggressively, and in some cases meeting its original targets early.


Coal demand in China is expected to remain high, but demand growth prospects in the industry remain poor. China’s depressed consumption is primarily a result of government policy drivers, such as moderating economic growth rates and reducing energy consumption growth by increasing energy efficiency and addressing environmental pollution.


The Chinese government is continuing its drive to reduce the share of coal in the overall energy mix. The target to reduce the share of coal to 65% this year represents an acceleration in previous plans, which envisioned coal coming down to 65% of total energy consumption by 2015. In the wake of record breaking air pollution levels in major coastal cities such as Beijing and Shanghai in 2012/23, the government has stepped up its programme of switching coal fired capacity to natural gas, with priority sectors including residential heating, industrial boilers and power generation.

China has also enacted some of the world’s strictest NOx, SO2 and particulate emissions limitations for industry. These policies are aimed at controlling environmental pollution and have accelerated both the growth of natural gas consumption and the need to ramp up domestic supply, pipeline and LNG imports and gas transmission infrastructure, as natural shortage have recently forced the government to temporarily scale back some of its coal to gas switching ambitions.

China’s upstream sector is seeking to increase natural gas production by 13% from 2013 levels because of government targets. The government’s current shale target of 6.5 billion m3 production by 2015 is however unlikely.

The future

In 2014, wind and PV solar are expected to benefit from strong government targets but the issue of grid connection bottlenecks will remain a risk. A gas shortage over the winter of 2013 – 14 is also a possibility due to the natural gas consumption target of 14.5% in 2013. The long term gas policy will continue to be an important driver for upstream gas developments and the construction of new LNG export facilities, a well as pipelines from Central Asia. Chinese demand will also push the price of Asian LNG up for short term contracts and spot cargoes over the year.

Adapted from a press release by Claira Lloyd.

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