An existential threat to OPEC is going to come soon from China - currently the world’s largest importer of oil.
The East Asian superpower is now making a massive push into the use of renewables - and crude imports will be the eventual loser.
Sales of petrol and diesel cars in China fell 20% in absolute volume terms in February from a year earlier.
Meanwhile, sales of plug-in electric vehicles kept rising explosively and reached a record 32% of the market for standard passenger cars.
The Telegraph says that, at the current pace, EV sales in China will hit eight million this year.
Sales have surged despite the elimination of subsidies at the end of last year. China’s best-selling EV is the BYD Song Plus, which retails for about £22,000. Number two is the smaller Wuling Mini. It starts at around £4,000.
“They are producing cheap EVs for the mass market, which is still completely lacking in the West. It is absolutely taking off,” said Lord Adair Turner, chairman of the global Energy Transitions Commission.
Threshold crossed
The consensus forecast until recently was that EV penetration would reach 40% of Chinese sales by 2030. That threshold could be crossed as soon as this year if manufacturers can produce fast enough to meet the demand.
“We think EVs will reach 80% of sales in China by 2030,” said Kingsmill Bond from energy strategist RMI.
Electrification is also spreading to light commercial vehicles, up 85% year-on-year.
Over 60% of buses in service in Chinese cities are already low-carbon. All municipal buses on the eastern seaboard will be electrified by 2025. Long-haul trucks are next in line.
It has been estimated that EVs worldwide have already displaced 1.5million barrels per day (bpd) of oil use, or 1.5% of global demand. This is about to accelerate exponentially.
“China’s demand for oil is suddenly going to start falling. Half of China's total car fleet could be electric by 2030. If you add up the numbers, that could subtract several million barrels of oil a day,” said Lord Turner.
Rail use
“China’s high-speed rail network means that there won’t be so much internal aviation either. Oil use per capita is never going to be anything close to American levels.”
China is currently the world’s largest importer of oil by far at 10.8million bpd.
But a massive expansion of renewable power is currently underway. Great tracts of desert in Inner Mongolia, Gansu, and Xinjiang are being covered with solar panels and onshore turbines, bundled with extra coal capacity as a back-up to avoid winter blackouts.
The original plan was to reach 1,200 gigawatts (GW) of wind and solar by 2030. China’s Research Academy of Environmental Sciences says this target will be achieved five years early, given that the rollout is running at 180 GW a year.
This compares to total installed capacity of 33 GW in France, 42 GW in the UK, and 240 GW in the US since the start of the green era.
Experts think China could smash the target three times over, reaching a staggering 3,300 GW by the end of this decade, all backed by a vast expansion of energy storage. They estimate that the county could halve its total energy imports by the early 2040s.