China: Power Generation

Overview

In 2007, the installed capacity in China reached 622 million kw, and the amount of power generated was 2,870 billion kwh, making China’s the world’s second-largest power generator and the fastest-growing power generation market. According to the International Energy Agency, China will invest a total of nearly USD 2 trillion in electricity generation, transmission, and distribution over the next 30 years to meet rapidly growing electricity demand. Half of that investment will be in power generation, while the other half will go to transmission and distribution.

Thermal energy accounts for 77.82% of China’s capacity, while hydropower provides 20.67% and nuclear power less than 1.6% of total capacity. With the limited supply of fossil fuels available for power generation, the Chinese government is encouraging alternative forms of power supply, such as hydropower, wind power, solar power, etc. China has unveiled an energy plan as part of its 11th five-year plan. Under the plan, China aims to increase the country’s renewable energy supply to 15% of the country's energy needs by 2020.

Natural gas is the fastest growing fuel in China's energy mix. Natural gas consumption in China is expected to rise to over 10% by 2020 in light of increasing LNG imports as well as domestic discoveries. From 2006 to 2020, China's natural gas infrastructure construction will involve a CNY 220 billion investment.

Opportunities

By 2020, China plans to build 30 nuclear generators of one million kW and above, bringing the country’s total nuclear capacity to 40 GW. In December 2006, U.S. technology was selected for 4 new reactors planned to be built in Zhejiang and Shandong provinces in 2007 and 2008.

The most competitive products and services for U.S. companies will be in advanced thermal power generation (including large-capacity gas turbines, super critical and ultra super critical large capacity coal-fired power generation equipment, clean coal technology, and combine cycle technology), alternative power supplies (including wind, solar, and nuclear), power dispatching systems, telecommunications equipment for the power industry, management software, and ultra high voltage transmission equipment and management systems. Safety equipment also has strong market potential for U.S. companies.

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