The development of the gas industry in Jiangsu province has taken the lead in the country.
Jiangsu's installed gas power capacity was 13.48 million kilowatts in 2017, ranking first in the country. The proportion of the gas power units in the total power-generating units reached 11.8 percent, much higher than the national average of 4.3 percent.
The amount of gas consumption in Jiangsu province was 21.7 billion cubic meters, the highest in China. The amount of gas used for generating electricity was 8.2 billion cubic meters, accounting for 37.6 percent of total gas consumption, which is 17.7 percent higher than the national average.
Jiangsu plans to increase its installed gas power capacity to 20 million kW by 2020, making up some 15 percent of the total installed capacity. At that point total gas consumption will reach 35 billion cu m, accounting for 12.6 percent of energy consumption, and the amount of gas used for power generation will be 17 billion cu m.
There are several reasons why gas power is so popular in Jiangsu province.
First, with two documents issued in 2016 and 2017, the Jiangsu government pushed forward the application of combined heat and power units and cutting the use of coal to generate electricity. Many coal-to-gas and cogeneration projects are providing development opportunities for gas power.
Second, Jiangsu has adequate gas sources with its location in the penultimate station of the first pipeline of the West-to-East gas transmission project. There are also several large liquefied natural gas stations, including the Rudong Station invested in by China National Petroleum Corporation with quantities received reaching 10 million tons a year.
Third, Jiangsu is one of the few provinces in China with a specific grid purchase price for gas power that is 0.563 yuan per kilowatt-hour, higher than that for coal power (0.39 yuan). Shanghai and provinces like Zhejiang have their grid purchase price for gas power decided by the market.
Fourth, the cost of gas power is twice or three times that of coal power. The maintenance and repair of gas power generation assemblies are also expensive. To offset that cost, the Jiangsu government gives large financial subsidies every year.
Fifth, the development of Jiangsu's economy is equal to that of a moderate developed nation. Therefore, residents and merchants in Jiangsu enoy relatively high affordability of gas power.