China’s Cheap Coal Slows Switch To Natural Gas

Fracking has really dropped the price of natural gas in the USA leading to major switch from coal to natural gas in power plants.

But China is resisting this change because of costs.

China’s effort to promote natural gas over coal to cut pollution is facing resistance from buyers who prefer cheaper to cleaner. The world’s largest energy consumer seeks to raise the share of less-polluting natural gas to 10 percent of its energy mix by 2020 from 6 percent last year. Yet even with the government cutting the cost of gas, it remains almost three times more expensive than coal when used to generate electricity. That’s putting a damper on the switch from a fuel that now accounts for more than 60 percent of demand.

Electricity generated from gas costs almost three times that from coal — about 0.6 yuan a kilowatt-hour in eastern China, while coal-fired output costs 0.22 yuan.

The Shanghai city-gate price — a wholesale cost of gas delivered to distributors — was cut in November to 2.18 yuan a cubic meter. That’s about $9 per million British thermal units, compared with $2.039 for U.S. benchmark prices and $4.24 in the U.K. as of Thursday. 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s