Chart of the Day: China’s Demand for Energy Undimmed by Economic Slowdown

Despite concerns about an economic slowdown, China’s demand for energy continued to see strong growth last year, with both gas and renewables seeing double-digit growth in consumption.

China surpassed Japan to become the world’s biggest gas importer last year, largely thanks to the government’s drive to shift the burden of heating homes away from highly polluting coal power plants and onto gas plants. China’s gas consumption rose 17.7% to 279 billion cubic meters (bcm), according to the U.S. International Energy Administration. That is still around a third of U.S. gas consumption, which rose 10.5% to 854 bcm, however.

On the oil front, China’s 2018 oil demand rose by 3.5% to 13,000 barrels of oil per day. While U.S. demand grew at a slower 2.7%, it remains greater at 20,000 barrels a day. In terms of China’s overall oil imports, it is expected that the country’s burgeoning petrochemical refining industry will continue to be a major driver of imports in 2019.

In 2018, China continued to bolster its already sizeable lead in renewables generation, ratcheting 1,854 terawatt-hours primarily from its solar, wind and hydropower capacity, an increase of 10.9%. The country added 43 gigawatts of new solar capacity in 2018, even after the government announced it would phase out its generous subsidy program.

Despite another strong year for renewables, China’s coal demand rose by 1% to 2.77 billion tons. This means that the country still accounts for roughly half of global coal demand, at 5.49 billion tons. In contrast, demand decreased by 4.5% in the U.S. and 2.6% in Europe. Yet even while China’s coal demand rose, its share of the overall energy mix fell 1 percentage point to 59%, with the country targeting a drop of another point by 2020.

Contact reporter David Kirton (davidkirton@caixin.com)