Here is a simple rule for the development of a country’s energy system, a rule that seems to be followed almost everywhere:
Coal is eventually used more or less exclusively for two things: making electricity and making steel.
In the early 20th century, almost all of Britain’s energy came from coal. If you travelled, you did so on a steam train. If you heated your home, it was by burning coal. If gas was used to light the streets of London, it was gas derived from coal. The factories of the workshop of the world were driven by the steam engine.
Today things are different. You can only travel by steam train on a handful of heritage lines; more or less no one heats their homes with coal; and the use of “town gas” – as it was called – ended decades ago. Coal is basically used to make electricity and steel.
And the same story can be told for America.
But, it cannot be told yet for China. Only half of the coal consumed in China is used to generate electricity, compared with over 80% in Britain and America. In fact, China is approximately half a century behind Britain and America.
Here is a figure I’ve created using historical statistics for Britain, America and China:
A couple of things stand out. First, electricity made up the majority of coal consumption for the first time in 1970 and 1963 in Britain and America respectively. Second, the rate of increase is much slower in China today than it was in Britain and America half a century ago. In 1990, China used 25% of its coal for electricity production. Two decades later it was 50%. In contrast, in 1960 Britain used 25% of its coal to produce electricity; but this had increased to 75% two decades later.
The rate at which China is modernising its coal economy therefore appears to be slower than it was in America or Britain. This is likely a result of the lack of readily available natural gas, which played a key role in the reduction of coal use in Britain and American industry. China remains highly dependent on the direct use of coal in industry.
However, in some respects China has fully modernised its coal economy. For example, it no longer has steam trains. Surprisingly, there were more steam trains than diesels in China until 1990:
This, of course, is a return to coal. The prime mover of China’s railways was the steam engine; then it was the diesel engine; and now increasingly it is effectively the steam turbines of China’s coal power plants.
Note on data