Alternative Energy Developments in China

In compiling the reports it was determined that coal’s current position of dominance is likely to be challenged by rapidly advancing renewable energy technology and resulting cost reductions, as well as by government regulations to control environmental pollution which has reached an all-time high in some cities, along with the prospect of possible carbon emission penalties.

Another factor which may, or may not, challenge coal as a source of energy (depending on which experts may be correct) is the production of shale gas. In the first half of this year, up to 56 shale gas wells were being explored in different regions of China, with only 24 producing gas, of which only six were producing a daily output of 10,000 cubic meters or more. In 2011 the shale gas industry set a goal of producing 6.5 billion cubic meters of shale gas by 2015, but this goal has been dismissed by a number of (unnamed) industry insiders as unattainable. At a symposium in June the director of the Mineral Resources and Reserves Evaluation Center Zhang Dawei noted that the industry is facing “enormous cost pressures and other problems”. He also acknowledged that the speed of exploration has been slower than originally anticipated. Lead researcher at China National Offshore Oil Corporation’s Energy Economics Institute Chen Weidong revealed that it costs between 80 and 100 million yuan to develop a single well, and that China would need up to 1,300 wells to reach the set goal. As yet there is no sign of these wells being built, making the possibility of reaching the 2015 goal very unlikely. In the meanwhile, solar and wind power are gaining ground both in China and around the world.