china’s white paper on energy condition and policies

7/28/2019 Chinas white paper on Energy condition and policies

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18 July 2013 Observer Research Foundation 1

Chinas first ever white paper onChinas Energy Conditions

and PoliciesIssued By:Chinas InformationOffice of the State Council

Issued Date:December 26, 2007,Wednesday


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218 July 2013 Observer Research Foundation

CHINAS ENERGY CONDITIONS AND POLICIES

Contents:I. Current Situation of Energy Development

II. Strategy and Goals of Energy Development

III. All round Promotion of Energy Conservation

IV. Improving the Energy Supply Capacity

V. Accelerating the Progress of Energy Technologies

VI. Coordinating Energy and Environment Development

VII. Deepening Energy System Reform

VIII. Strengthening International Cooperation in the Field ofEnergy

IX. Conclusions


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I. Current Situation of Energy DevelopmentFEATURES OF CHINAS ENERGY RESOURCESi. Chinas primary energy is dominated by coal: Reserves of coal by 2006 stood at 1,034.5 billion tons. Remaining verified exploitable reserves accounted for 13% of the

total world.

Verified reserves of oil and gas is very small. Oil shale, coal-bed gas and other unconventional fossil energy

reserves have huge potential.Consequences: More dependency on fossil fuels polluting environment.ii. Chinas per-capita average of both coal and hydropower

resources

is very low: Per capita average of both coal and hydropower resources is 50% of

worlds average. Per capita average of oil and natural gas is 1/5th of worlds average. Arable land is less than 30% of worlds average hindering

development of biomass energy.Consequences: Chinas population resulting in low per-capita average of

energy resources in the world.


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I. Current Situation of Energy Development.FEATURES OF CHINAS ENERGY RESOURCESiii. Chinas imbalance distribution of energy resources. Coal is found mainly in the north and the northwest; Hydropower in the southwest; Oil and Natural Gas in the eastern, central and western regions and along the

coast; Consumers of energy resources are mainly in the southeast coastal areas,

where economy is most developed;Consequences: This difference between producers and consumers leads to logistic

p

roblems including the increased cost.iv. China faces difficulty developing energy resources. Geological difficulties in tapping coal resources, mostly of which is done by

underground mining, rather mining through opencast methods. Oil and Gas resources been located in complex geological conditions and at

great depth, requiring advanced and expensive prospecting and tappingtechniques required. Untapped hydropower resources been located in the high mountains and deep

valleys of the southwest, far away from consumption centre.Consequences: This resulting in technical difficulties, uneconomical and uncompetitive.


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I. Current Situation of Energy Development.CHINAS ENHANCED ENERGY GROWTH LEADING TO GROWTH IN ITSNATIONAL ECONOMY.i. Enhancement in Chinas Energy Supply Capabilities

Energy supply framework with coal as the main energy resources, the outputof primary energy equaled 2.21 billion tons of standard coal, ranking 2nd in theworld.

Daqing, Shengli, Liaohe, Tarim and other large oilfields as oil production bases,ranking China the worlds 5th largest oil producer in 2006, with 185 million tonsin that year.

Natural gas output ballooned from 14.3 billion cubic meters (bcm) in 1980 to58.6 bcm in 2006.

The proportion of commercial renewable energy in primary energy structure isrising.

The installed capacity in power sector reached 622 million kW and the powergenerated was 2,870 billion kWh in 2006, both ranking 2nd in the world.


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I. Current Situation of Energy Development.CHINAS ENHANCED ENERGY GROWTH LEADING TO GROWTH IN ITSNATIONAL ECONOMY.ii. Great emphasis on energy saving

The energy consumption for every 10,000 yuan of GDP dropped from 3.39 tonsof standard coal in 1980 to 1.21 tons in 2006, making annual energy-saving rate3.9%, putting an end to the rising trends of per-unit GDP energy consumption.

Comprehensive utilization efficiency in the processing, conversion, storage andend-use of energy was 33% in 2006, up by 8% over 1980.

Per-unit product energy consumption has dropped.

iii. Consumption structure been optimized

The proportion of coal in primary energy consumption decreased from 72.2%

in 1980 to 69.4% in 2006. Other forms of energy rose from 27.8% to 30.6%.

Renewable energy and nuclear power rising from 4% to 7.2%.

The share of oil and gas has also increased.


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I. Current Situation of Energy Development.CHINAS ENHANCED ENERGY GROWTH LEADING TO GROWTH OF ITSNATIONAL ECONOMY.iv. Enhancement of the scientific and technological level China is capable to indigenously design and build million-kW pressurized water

reactors.

Has developed high-temperature gas-cooled reactors and fast-neutron-breeder reactors. There has been quick improvement in technologies to deal with pollution such

as flue gas desulphurization (FGD) and renewable energy development. Models of 500 kv DC and 750 kv AC electricity transmission projects have

been completed and put into operation. Pilot 800 kv DC and 1,000 kv AC extra-high-voltage electricity transmission

projects are under way.

v. Progress has been made in environmental protection. Strengthening of environmental protection been fundamental state policy of

China, has been reinforced the same through legislative and economic means. Chinas energy policies gives priority to reduction and rehabilitation of

environmental damage and pollution resulting from energy development.


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I. Current Situation of Energy Development.CHALLENGES IN CHINAS ENERGY SUPPLY SYSTEMi. Resources restraint and low energy efficiency

Chinas relative scarcity of high-quality energy resources hinders its supplycapability.

Imbalanced distribution also makes it difficult to secure a continued andsteady supply

The extensive pattern of economic growth, irrational energy structure,unsatisfying energy technology and relatively poor management resulted inhigher energy consumption per-unit GDP.

Consequences: An increase solely in supply is hard to meet the rising demand forenergy.

ii. Increased environmental pressure caused by energy consumption

Increasing environmental pressure caused by the consumption of energy,mostly from coal.

Air pollution is on rise due to increase in motor vehicles.

Consequences: Ecological environment is bound to face even more pressure if thissituation continues.


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I. Current Situation of Energy Development.CHALLENGES IN CHINAS ENERGY SUPPLY SYSTEMiii. Incomplete market system and improper energy pricing

Chinas energy market is yet to be completed, as the energy pricing mechanismfails to fully reflect the scarcity of resources, its supply and demand and theenvironmental cost.

Coal production safety is lot to be desired.

There is irrational structure of power grids.

Oil reserves are not sufficient.

An effective pre-warning system is yet to be improved and consolidated todeal with energy supply breakdowns.

Consequences: Can adversely impact the energy growth of China.


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II. Strategy and Goals of Energy DevelopmentBASIC THEMES OF CHINAS ENERGY STRATEGYi. Thrift been the top priority China stress both on developing energy and saving, giving priority to the later. For this it is changing the pattern of economic growth, adjusting the

industrial structure, encouraging research and development of energy-saving

technologies, popularizing energy-saving products, improving energymanagement expertise, improving energy-saving legislation and standards andenhancing energy efficiency.

ii. Relying on domestic resources China put more emphasis and reliance on its domestic energy resources so as

to increase the supply of energy. It tries to satisfy the rising market demand by way of expanding the

domestic supply of reliable energy resources.

iii. Encouraging diverse patterns of development China will continue to develop its coal resources in an orderly way. Scientifically spur the power industry, speed up oil and natural gas

exploration, encourage coal bed gas tapping, boost hydroelectric power &renewable energy and actively promote nuclear power development.

Optimize energy structure and guarantee a steady supply of energy.


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II. Strategy and Goals of Energy DevelopmentBASIC THEMES OF CHINAS ENERGY STRATEGYiv. Relying on science and technology

China fully relies on science and technology to enhance its ability forindependent innovation and its ability to digest and improve importedtechnologies and tackle technological bottlenecks in energy development.

China also focuses on improving key technologies and the manufacturing levelof key equipment, seek new ways for energy development and utilization.

v. Protecting the environment

China has set the goal of building resource-conserving, environment-friendlysociety.

It is endeavoring to coordinate with environmental protection.

vi. Cooperation for mutual benefit China works with international energy organizations and other countries on the

principle of equality, mutual benefit and win-win to improve the mechanism,expand the fields of cooperation and safeguard international energy securityand stability.


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III. All-round Promotion of Energy ConservationMEASURES TO PROMOTE ALL-ROUND ENERGY CONSERVATIONiii. Launching energy-saving projects

China is carrying out ten key energy-saving projects, including petroleumsubstitution, simultaneous generation of heat and power, surplus heatutilization and the construction of energy-saving buildings.

It will speed up the elimination of old automobiles and ships, actively developpublic transport, set limits on high oil-consuming automobiles and developenergy-saving and environment-friendly automobiles.

It will also carry out the Green Lighting Project and spread more rapidly high-performance electrical appliances.

Apart it will also spread technologies for firewood and coal stoves and energysaving houses in rural areas and eliminate old, high energy-consuming farmmachinery and fishing boats.

iv. Strengthening the administration of energy conservation

Chinese government has established a system of compulsory government

procurement of energy-saving products. It will study and formulate fiscal and taxation policies to encourage energyconservation and implement preferential taxation policies

It will deepen the reform of energy prices to introduce a pricing mechanismfavorable for energy conservation.

It will improve legal framework regarding energy conservation and strengthenenergy conservation management by law.


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III. All-round Promotion of Energy ConservationMEASURES TO PROMOTE ALL-ROUND ENERGY CONSERVATIONv. Advocating energy conservation in society Chinese government will promote the culture of energy conservation and work

had to bring into being a healthy, civilized and economical mode ofconsumption.

It will promote energy conservation into the system of elementary education,

vocational education, higher education and technical training and publicize andpopularize relevant knowledge by means of mass media.IV. Improving Energy Supply System

MEASURES TO INCREASE ENERGY SUPPLY CAPACITYi. Orderly development of coal industry It is Chinas urgent need to increase the supply capacity, optimize the energy

mix, ensure coal mining safety, reduce environmental pollution, increaseresource utilization efficiency and build a new coal industry system, so as toguarantee the development of national economy.

It will promote the coordinated development of related industries andencourage coal electricity joint operations or coal electricity transportintegrated management to extend the coal industry chain.

It will develop a circular economy, steps up efforts in environmentalprotection, promote the comprehensive utilization of resources and acceleratethe industrialized development of coal-bed gas.


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IV. Improving Energy Supply SystemMEASURES TO INCREASE ENERGY SUPPLY CAPACITYii. Actively developing electric power

Chinese government will develop clean coal-fired electric power by setting uplarge coal-fired power bases and encouraging the building of power plants atpitheads, with emphasis on large, highly efficient, environment-friendly powergenerating sets.

It will also develop hydropower, nuclear power and natural gas powergeneration in an appropriate manner.

It will encourage power generation with renewable and new energy resources. It will continue to strengthen power demand-side management (DSM), exert

control over power use for the purpose of conserving energy and work hard toincrease energy utilization efficiency.

iii. Expediting development of oil and gas

China will step up its efforts in prospecting for and exploiting oil and naturalgas, with the focus on major oil and gas basins.

It will expedite the construction of oil and gas pipeline networks andsupporting facilities and gradually improve the national network of oil and gaspipelines.


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IV. Improving Energy Supply SystemMEASURES TO INCREASE ENERGY SUPPLY CAPACITYiv. Vigorously developing renewable energy

China has promulgated the Renewable Energy Law.

It has earmarked special funds for renewable energy development to supportresource survey, R&D of relevant technologies, building of pilot demonstrationprojects, as well as exploration and utilization of renewable energy in ruralChina.

v. Improving energy development in the rural areas

China having a rural population of 750 million, still use traditional biomassenergy due to economic and technical limitations. It will further develop ruralhousehold methane and make better use of biomass and solar energy.

It will continue popularizing firewood and energy saving stoves and smallenergy facilities like small wind power and hydropower stations in rural area.

Increasing the supply of high-quality fossil energy and increase the proportionof commercial energy consumption in rural areas is also in the list.


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V. Accelerating the Progress of Energy TechnologiesSTEPS IN ACCELERATING PROGRESS IN ENERGY TECHNOLOGIESi. Popularizing energy-saving technologies Giving priority to the development of energy-saving technologies, it focus on

key technologies in the high energy-consumption sectors, to enhance theutilization efficiency of primary and end-use energy resources.

Implementing the policy outline on energy-saving technologies and guidessocial investment into the application of energy-saving technologies.

Placing emphasis on R&D of energy-saving technologies and equipment forindustry, transportation and construction and the application of technologiesconnected with integrated renewable energy systems.

ii. Spurring innovation in key technologies China encourages the development of clean coal technology, popularizes

advanced power generation technologies, including gasification combined cycle

(IGCC), supercritical and ultra-supercritical power generation and large-scalecirculating fluidized bed (CFB) and develops coal gasification-based poly-generation technology.

It develops technologies with prospecting for and exploitation of petroleumand gas resources under complicated geographical condition and highlyefficient exploitation of low-grade petroleum and gas resources undercomplicated geographical conditions.


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V. Accelerating the Progress of Energy TechnologiesSTEPS IN ACCELERATING PROGRESS IN ENERGY TECHNOLOGIES

iii. Enhancing equipment manufacturing level

China gives impetus to the technological progress of the equipmentmanufacturing industry through key state projects.

It encourages the development of comprehensive excavation machinery in coal

mining and heavy duty open pit mining machinery. It also encourages the development of oil and natural gas prospecting and

drilling equipment.

iv. Strengthening frontier technology research

China focuses on research into conversion from fossil, biomass and renewableenergy resources to hydrogen and high-efficiency hydrogen storage,transmission and distribution technology.

China is speeding p research into the engineering and core technology of gas-cooled faster reactors (GFR) and technology for developing magneticconfinement fusion (MCF) and natural gas hydrate technology.

v. Developing basic scientific research

China concentrates on research into the basic theories of the high-efficiencyand low-pollution and conversion of fossil energy, energy saving and storage.


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VI. Coordinating Energy and Environment DevelopmentSTEPS IN COORDINATING ENERGY AND ENVIRONMENT DEVELOPMENTi. Comprehensive control of greenhouse emissions China is vigorously developing a circular economy, fostering the comprehensive

utilization of resources, enhancing the utilization efficiency of energy,reducing greenhouse gas emissions.

ii. Energetically fighting ecological destruction and environmental pollution

China promotes orderly exploitation of coal resources, restricts theexploitation of high-sulfur and high-ash coal, forbids mining coal with toxicand harmful substances such as arsenic and radio toxins, exceedingpermissible limit.

iii. Proactive prevention of motor vehicle emission pollution Preventing motor vehicle emission pollution has been put to high on the

environmental protection agenda of China. It is strictly enforcing vehicle emission standards, intensifying inspection for

the environment-friendly production of vehicles and so on.

iv. Exercising strict environment management of energy projects China strictly enforces the environmental impact assessment system,

restrains extensive mode of economic growth by exercising a strictenvironmental access system.

It ensures simultaneous design, construction and launching of environmentprotection facilities at new, expansion and rebuilding projects, intensify safemanagement of nuclear power projects and practices meticulous safetyexamination and supervision of nuclear power facilities under construction.


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VII. Deepening Energy System ReformMEASURE TAKEN BY CHINA FOR DEEPENING ITS ENERGY SYSTEM REFORMi. Strengthening energy legislation China has enacted and put in force the Clean Production Promotion Law and Renewable

Energy Law. The amended Energy Conservation Law ahs been promulgated. The Energy Law, Circular Economy Law, Law on the Protection of Oil and Natural Gas

Pipelines and Regulations on Energy Conservation of Buildings are being formulated.

The Mineral Resources Law, Coal Industry Law and Electric Power Law are being revised.ii. Reinforcing production safety. China pays high attention to safeguarding the lives and health of the people and takes

effective measures to halt the trend of frequent occurrences of serious accidents. It has enforced safety supervision of coalmines and guided local governments and

enterprises to intensify efforts in technological upgrading for coalmines and guided localgovernments and enterprises to intensify efforts in technological upgrading for coalmine safety andconstruction of safety facility.

iii. Improving the emergency response system. China practices unified power dispatch, hierarchical power management and operation of

power grids by regions. It has built national oil reserve bases and expanded its oil reserve capacity. It has

established a guarantee system for oil and natural gas supply emergencies to ensure securesupplies of energy.

iv. Accelerating market system construction. China encourages the entrance of entities of various ownerships into the energy field and actively facilitates

market-oriented reform related to energy. It has improved the coal market system in all-round manner and paced up reform of the oil and natural gas

circulation system.


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VII. Deepening Energy System ReformMEASURE TAKEN BY CHINA FOR DEEPENING ITS ENERGY SYSTEM REFORMv. Deepening reform of management system China has improved the national energy management system and decision-

making mechanism, strengthened unified planning and coordination amongstate departments and local governments.

Consolidated the states overall planning and macro-control in the field ofenergy development with the focus on changing functions, straightening outrelations, optimizing the setup and raising efficiency so as to form amanagement system that centralizes control to an appropriate degree, divideswork in a rational way, fosters scientific decision-making and ensures smoothenforcement and effective oversight.

vi. Advancing price mechanism reform Chinese government has established a pricing mechanism that is able to

reflect resource scarcities, changes in market supply and demand andenvironmental cost.

It has deepened coal price reform to realize all-round marketization. It has propelled electricity tariff reform to ensure that electricitygeneration and selling price are eventually formed by market competition.

It has also improved oil and natural gas pricing mechanism to timely reflectinternational market prices and domestic market supply and demand.


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VIII. Strengthening International Cooperation in the Field of EnergyMEASURE TAKEN BY CHINA TO IMPROVE INTERNATIONAL COOPERATION IN ENERGY FIELD.i. Improving external cooperation in the exploitation and development of oil and gas

resources. China has implemented a cooperative mode on product-sharing contracts with other

countries in the field of oil and gas resources. China promulgated the revised Rules on External Cooperation for Ocean Oil Exploitation

and Rules on External Cooperation for Onshore Oil Exploitation. It encourages foreign business people to participate in cooperation in oil and exploration

and development and gas pipelines as well.ii. Encouraging foreign investment in exploration and development of unconventional energy

resources. China allows foreign investors, either by themselves or in collaboration with Chinese

counterparts, to conduct risk exploration on its territory. Efforts are being made to improve management of and services to foreign investment in

the exploitation and exploitation of non-oil-and-gas mineral resources.iii. Encouraging foreign investors to invest in and operate energy facilities such as power

plants China encourages foreign investment in the production and supply of electric power and gas

as well as in the construction and operation of thermal power plants with a single-generatorcapacity of 600,000-kW and above, power stations burning clean coal, power stationsfeaturing heat and power cogeneration, hydropower stations mainly for electricityproduction, nuclear power stations.

iv. Improving the environment for foreign investment Chinese government has sorted out and rectified administrative regulations and

departmental rules concerning energy management that are inconsistent with the WTOrules.


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VIII. Strengthening International Cooperation in the Field of Energy

MEASURE TAKEN BY CHINA TO IMPROVE INTERNATIONAL COOPERATION INENERGY FIELD.v. Further expanding the scope of foreign investment

China pays primary attention to introducing foreign advanced technology, managementexperience and people of high caliber to further shifting the focus from investing in fossil

energy resources to renewable resources from emphasizing exploration and development tothe development of service trade.

CHINA HOLDS THAT INTERNATIONAL COMMUNITY SHOULD MAKE EFFORTSMAINLY IN FOLLOWING ASPECTS TO SAFEGUARDING WORLD ENERGYSECURITY.i. Intensifying mutually beneficial cooperation in energy exploration and utilization

The international community should strengthen consultation and coordination as regardsenergy policies, improve the international energy market monitoring and emergency

response mechanisms, promote oil and natural gas development to increase energy supply,realize globalization and diversification of energy supply, ensure stable and sustainableenergy supply internationally, maintain reasonable energy prices on the international marketand ensure that each countrys energy demands are well met.

ii. Setting up a system to develop and popularize advanced technology

The international community should strive to develop and popularize energy conservationtechnology, promote the comprehensive utilization of energy and encourage each country toimprove energy efficiency.


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VIII. Strengthening International Cooperation in the Field of Energy

CHINA HOLDS THAT INTERNATIONAL COMMUNITY SHOULD MAKE EFFORTSMAINLY IN FOLLOWING ASPECTS TO SAFEGUARDING WORLD ENERGYSECURITY.iii. Maintaining a safe, stable and wholesome political environment

International community should work collaboratively to maintain stability in oil producing

and exporting countries, especially those in the Middle East to ensure the security ofinternational energy transport routes and avoid geopolitical conflicts that affect theworlds energy supply.

CONCLUSION

china’s white paper on energy condition and policies

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