China Coal-to-Gas Switch Reaccelerates in 2020
China halted the nationwide coal-to-gas switch (CTG) promotion in late 2017 due to the winter supply failure, but as the supply sufficiency has leveled up year by year, the central government rakes up the 2+39 CTG progress in North China after the control of the pandemic, while many developed provinces participate voluntarily such as Guangdong, Zhejiang, etc. Thus, 2020 is a restart year of the great CTG reform to fulfill the route map of natural gas promotion in the 13th Five-Year Plan and the Blue Sky Campaign and to salute President Xi’s carbon-neutral ambition and the upcoming 14th Five-Year Plan. SCI expects the CTG will contribute around 5 bcm of consumption in 2020’s natural gas growth, helping China to accomplish a 6% annual growth in 2020 against the pandemic and global recession.
The key propelling drive of CTG in 2020 is the provincial promotion, represented by Guangdong Province. Guangdong, as one of the most developed areas in China, announced to fight the air pollution from 2014, and combined the CTG policies into the fight from May 2018 (Work Plan for Guangdong Blue Sky Campaign 2018). In December 2018, Guangdong announced to eliminate coal burning in industrial users by 2020 (Implementation Plan for Guangdong Blue Sky Campaign 2018-2020). In the end year of the plans, Guangdong implemented strict supervision in 2020, focusing on the power plants, ceramic kilns and industrial boilers, and the provincial government aimed to upgrade over 2,000 MW coal-burning power generators for self-use in the paper and textile industries, and 2,500 MW coal-burning power plants, while to replace all coal-burning kilns in over 998 ceramic production lines and over 550 coal-burning industrial boilers. According to SCI’s survey, it is estimated that Guangdong will add around 6-7 bcm natural gas consumption potential by CTG by the end of 2020, and CTG progress in Guangdong will contribute around 3 bcm of policy-driven natural gas consumption in 2020.
Chinese central government also put 2+39 region winter pollution treatment back online on September 25, 2020. On the one hand, the implementation is requested to be reasonable based on local environment, but on the other hand, the involved industrial and residential CTG coverage is expanded enormously: The industrial coverage is expanded from the previous 15 industries to 39 industries, and the 2020 residential CTG target is set to 7 million households. According to SCI’s survey, it is estimated that 2+39 region will contribute around 1.5 bcm of policy-driven natural gas consumption in 2020.
