China: New life for coal in quake’s aftermath

Two months after the May 12, 8.0-magnitude earthquake that struck southwest China, with its epicenter at Wenchuan county in Sichuan province, the attention of Beijing’s leaders has shifted from the direct damages caused by the disaster to its potential corollary impacts on China’s growth and to maintaining President Hu Jintao’s “scientific outlook on development” and other key strategic issues.

While China is the world’s second-largest energy producing and consuming country, and recently overtook Japan to become the second-largest importer of crude oil, the energy implications of the recent earthquake, including its impacts on the global oil market, have become a topic of interest under the international spotlight.
The earthquake’s effects on China’s long-term national energy development are expected to be much more profound. First, the Sichuan earthquake has triggered a rethinking of the country’s nuclear development ambitions.

The Sichuan earthquake also cast doubt on China’s ambitious hydro-development plan. With an economic exploitable capacity of 401.8GW, China ranks top in the world in terms of hydro development potential. In 2004, Beijing set an ambitious target of expanding installed hydro capacity to 125GW in 2010 and 150GW in 2015. By the end of 2007, national hydro capacity had already reached 145.26GW [2]. With its hydro electricity output representing 18% of the national total in 2006, Sichuan is one of China’s key hydro development regions.

During the project appraisal process of the TGD project, environmental and ecological risks of large hydro dams were deliberately ignored due to political manipulation. Since then, environmental impact assessment has gradually been integrated into the project appraisal of large hydro projects, which is evident in Premier Wen Jiabao’s decision to halt construction of 13 dams on the Nujiang River in 2004.

Compared with a business-as-usual scenario for the rest of the economy – as if there were no Sichuan earthquake – China’s nuclear and hydro development trajectories are expected to be hindered, and the implications for China’s coal industry are quite profound.

Asia Times