Robust Growth and Extreme Weather Halt China's Coal Demand Slide

(Bloomberg) -- China’s coal demand in 2017 halted three years of declines amid accelerating economic growth and extreme weather.

Use of the fuel by the world’s largest energy consumer rose 0.4 percent last year, the first increase since 2013, the National Bureau of Statistics said Wednesday on its website. Because total energy demand rose at a faster pace, the fuel’s share in the nation’s energy mix dropped 1.6 percentage points to 60.4 percent, it said.

President Xi Jinping’s government has been pushing to cut use of the polluting fuel in favor of natural gas and renewables in order to curb smog. Still, last year’s extreme hot weather and robust economic expansion boosted coal consumption, according to Shanxi-based industry researcher Fenwei Energy. The nation’s gross domestic product expanded 6.9 percent last year, the first full-year of acceleration since 2010.

In addition, China’s northern provinces, which are replacing millions of households with gas boilers, were asked to revert to burning coal after shortages of natural gas left people without heating amid freezing winter temperatures.

“Coal use is unlikely to retain positive growth this year as the nation’s coal-to-gas switch program will be more mature and have a bigger impact on coal than last year,” Zeng Hao, an analyst with Fenwei Energy, said by phone. “Also, we’re not expecting another year with extreme weather and better-than-expected economic growth.”

China’s total energy use rose 2.9 percent to 4.49 billion tons of standard coal in 2017, the fastest pace since 2013, Wednesday’s data showed. Clean energy, including natural gas, hydropower, nuclear and wind power, accounted for 20.8 percent of the country’s energy mix, 1.3 percentage points higher than 2016.

To contact Bloomberg News staff for this story: Jing Yang in Shanghai at jyang251@bloomberg.net.

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Abhay Singh, Ben Sharples

©2018 Bloomberg L.P.

With assistance from Jing Yang