LNG). In 2000, there were only around 6,000
gas-fuelled vehicles registered in China. In 2010,
there were 1.11 million units (1.10 million fuelled by CNG and 10,000 by LNG). By 2014, the
figures had escalated to 4.595 million units
(4.411 million fuelled by CNG and 184,000 by
LNG), making China the leader in gas-fuelled
vehicles with 20% of the world total. From the
second half of 2014, the market turned due to
China’s slowing economic growth, weak demand
in transport, sharp decline in international oil
prices and high natural gas prices. As China
increases its efforts to prevent and control air
pollution, development of gas-fuelled vehicles,
especially freight vehicles and urban buses, will
be fast-tracked. China’s gas demand in transport
is expected to rise to 37 billion cubic metres in
2020 and 52.3 billion cubic metres in 2030.
(2) Rising gas demand in power generation
Compared to coal, gas-fired power generation
delivers many benefits, including high energy
conversion efficiency, strong peak shaving
capacity, small gas turbine footprint, fast start
and stop, large single unit capacity, safe and
stable operation, and low emissions of pollutants
and CO 2 . By the end of 2015, China’s installed
capacity of gas-fired power generation was 66.37
gigawatts, accounting for only 4.4% of China’s
total installed power generating capacity and
20% of the world average.
Affected by such factors as low levels of
indigenously manufactured equipment, high
procurement and maintenance costs, slow progress in power market reform and high gas prices, China’s gas-fired power generation is less
cost-effective than coal, hydropower and nuclear
power. Gas-fired power generation projects in
China make only small profits at best. Others are
loss-making, so the industry takes a wait-and-see
attitude to assess those projects under construction or planned. In 2014, power generation
accounted for 14.1% of China’s total gas
demand, far below that of the USA (30.4%), the
UK (38%), Germany (36%) and South Korea
(44%). Given the environmental benefits of
gas-fired power generation, the segment holds
strong growth potential.
(3) Steady growth in household gas demand
In 2000–14, China’s gas pipeline capacity
increased from 33,700 to 434,600 km, an average annual growth rate of 18%. As China’s
long-distance gas transmission and urban gas
distribution pipeline networks grew, gas demand
by households rose just as rapidly. In 2000–14,
household gas demand increased from 3.23 billion cubic metres to 34.26 billion cubic metres,
averaging 18.4% annually, according to the
National Bureau of Statistics of China. Gas
demand per capita increased from 2.6 to 25 m
3 /
person, with urban gas demand per capita rising
from 7.0 to 45.7 m
3 /person. At the end of 2015,
the total population of mainland China was 1.374
billion, of which 771 million were urban residents, 56% of the total. As more people move
into cities, China’s urbanisation rate will reach
60% in 2020 and 70% in 2030, and the number
of residents using gas will also grow. Household
gas demand in China is forecast to rise to 48
billion cubic metres in 2020 and 62 billion cubic
metres in 2030, about 13% of total gas demand in
2030.
5.3.3 Optimal Paths for Natural Gas
Demand
(1) Optimal paths for gas-fuelled vehicles
By 2020, the number of gas-fuelled vehicles in
China is expected to reach 10.5–11 million units,
including 400,000–500,000 vehicles fuelled by
LNG. Together, they will account for more than
5% of China’s total vehicle stock. The number of
LNG service stations will amount to 4,500–
5,000.
Gas-fuelled vehicles have significant environmental and cost advantages over petrol and
diesel. The operating cost of natural gas transport
fuel is lower than that of petrol and diesel.
Compared with electric and other new energy
vehicles, gas is a more mature technology.
Gas-fuelled vehicles perform better, have a
longer driving range and are safer.
Small gas-fuelled passenger vehicles like
urban taxis and family saloons have lower
operating costs, according to the China Automotive Technology and Research Center. The
fuel cost of a CNG-fuelled taxi driving 350 km a
Special Report 2: Research on China’s Energy Demand Revolution
275
gas-fuelled vehicles registered in China. In 2010,
there were 1.11 million units (1.10 million fuelled by CNG and 10,000 by LNG). By 2014, the
figures had escalated to 4.595 million units
(4.411 million fuelled by CNG and 184,000 by
LNG), making China the leader in gas-fuelled
vehicles with 20% of the world total. From the
second half of 2014, the market turned due to
China’s slowing economic growth, weak demand
in transport, sharp decline in international oil
prices and high natural gas prices. As China
increases its efforts to prevent and control air
pollution, development of gas-fuelled vehicles,
especially freight vehicles and urban buses, will
be fast-tracked. China’s gas demand in transport
is expected to rise to 37 billion cubic metres in
2020 and 52.3 billion cubic metres in 2030.
(2) Rising gas demand in power generation
Compared to coal, gas-fired power generation
delivers many benefits, including high energy
conversion efficiency, strong peak shaving
capacity, small gas turbine footprint, fast start
and stop, large single unit capacity, safe and
stable operation, and low emissions of pollutants
and CO 2 . By the end of 2015, China’s installed
capacity of gas-fired power generation was 66.37
gigawatts, accounting for only 4.4% of China’s
total installed power generating capacity and
20% of the world average.
Affected by such factors as low levels of
indigenously manufactured equipment, high
procurement and maintenance costs, slow progress in power market reform and high gas prices, China’s gas-fired power generation is less
cost-effective than coal, hydropower and nuclear
power. Gas-fired power generation projects in
China make only small profits at best. Others are
loss-making, so the industry takes a wait-and-see
attitude to assess those projects under construction or planned. In 2014, power generation
accounted for 14.1% of China’s total gas
demand, far below that of the USA (30.4%), the
UK (38%), Germany (36%) and South Korea
(44%). Given the environmental benefits of
gas-fired power generation, the segment holds
strong growth potential.
(3) Steady growth in household gas demand
In 2000–14, China’s gas pipeline capacity
increased from 33,700 to 434,600 km, an average annual growth rate of 18%. As China’s
long-distance gas transmission and urban gas
distribution pipeline networks grew, gas demand
by households rose just as rapidly. In 2000–14,
household gas demand increased from 3.23 billion cubic metres to 34.26 billion cubic metres,
averaging 18.4% annually, according to the
National Bureau of Statistics of China. Gas
demand per capita increased from 2.6 to 25 m
3 /
person, with urban gas demand per capita rising
from 7.0 to 45.7 m
3 /person. At the end of 2015,
the total population of mainland China was 1.374
billion, of which 771 million were urban residents, 56% of the total. As more people move
into cities, China’s urbanisation rate will reach
60% in 2020 and 70% in 2030, and the number
of residents using gas will also grow. Household
gas demand in China is forecast to rise to 48
billion cubic metres in 2020 and 62 billion cubic
metres in 2030, about 13% of total gas demand in
2030.
5.3.3 Optimal Paths for Natural Gas
Demand
(1) Optimal paths for gas-fuelled vehicles
By 2020, the number of gas-fuelled vehicles in
China is expected to reach 10.5–11 million units,
including 400,000–500,000 vehicles fuelled by
LNG. Together, they will account for more than
5% of China’s total vehicle stock. The number of
LNG service stations will amount to 4,500–
5,000.
Gas-fuelled vehicles have significant environmental and cost advantages over petrol and
diesel. The operating cost of natural gas transport
fuel is lower than that of petrol and diesel.
Compared with electric and other new energy
vehicles, gas is a more mature technology.
Gas-fuelled vehicles perform better, have a
longer driving range and are safer.
Small gas-fuelled passenger vehicles like
urban taxis and family saloons have lower
operating costs, according to the China Automotive Technology and Research Center. The
fuel cost of a CNG-fuelled taxi driving 350 km a
Special Report 2: Research on China’s Energy Demand Revolution
275