The Challenge

China’s energy demand is rapidly growing as its economy continues to expand. In fact, China is the world’s fastest growing consumer of power; in 2004 alone it added enough power plants to equal all of California’s power generation. Periodic power shortages put pressure on officials to make additional supplies of energy available to consumers. Unless action is taken to decrease the growing demand, China will need to add generation capacity equal to 22 Three Gorges Dams, including 150 gigawatts in new coal-fired capacity in the next five years. China produced over 2 billion tons of coal in 2005, nearly 45% of the world’s total, and more than the US, Russia, and India combined. Over half of this coal is used to produce electricity and China is now building the equivalent of one large coal-fired power plant a week.

This staggering rate of growth will have substantial impacts on the environment not only in China but also in the US and around the world. In addition to emitting global warming gasses, pollution generated by its power plants cross the Pacific, resulting in mercury contamination of US fish and soils. Furthermore, according the NY Times, it can be expected that eventually up to one-third of the air pollution in California will originate in Asia.

In addition to the environmental impacts, China’s growth is also causing tremendous pressure on world markets of oil and natural gas, raising energy prices and increasing global tensions.

China recognizes that it cannot continue to increase its energy usage at the same rate as its economic growth. Chinese leaders are publicly stating that the country needs to make fundamental changes to deal with the skyrocketing energy consumption. In fact, China has a declared goal of quadrupling its economy between 2002 and 2020, while only doubling its energy consumption. This government policy provides a rare opportunity to provide powerful environmental improvements while developing a solution to an economic problem.

China has invited the Alliance to provide technical support and guidance to help them achieve their energy efficiency goals.