China searches for energy security

October 5th, 2008 - 12:26 pm ICT by IANS  

Beijing, Oct 5 (Xinhua) It was a mid-May night, and trucks queued up at a gas station by the East 5th Ring Road of Beijing. The line was long, blocking a lane of the main road.At the station, the oil pipe nozzles were dry - the stock of diesel had run out and the fresh supplies would not come until after midnight. But when new consignment came, it was far less than adequate. Most vehicles would be partly filled and some would wait in vain.

The situation had a direct link with soaring oil prices on the international market. To the country’s decision makers, it was a harsh reminder of a vital issue - energy security.

Though the aggregate figure looks quite impressive, China is poor in energy resource reserves on per capita calculation. Proven reserves of fossil fuels have increased in recent years, but this cannot change the overall picture.

Production of energy fell behind growing demand due to a rapid development of the economy, the quickening pace of urbanization and the rising living standard.

The country’s coal reserves ranked third globally. Production accounted for about 40 percent of world output in 2007. Given the current rate of exploitation, the reserves would be exhausted in a little over 80 years. The comparatively small reserves of oil and gas would dwindle even faster, in 15 years and 30 years respectively.

The government announced an energy strategy that lay emphasis on conservation to optimize consumption. It relies on domestic production and seeks diversified sources to secure supply and to develop new and renewable energies as alternatives for the future.

“We will strive to establish a steady, economic and clean energy supply system,” Zhang Guobao, minister in charge of the energy sector of the National Development and Reform Commission (NDRC), said at an international conference in January.

It might be necessary for China to maintain fast economic growth, but energy consumption may grow at a slower pace if a good job is done in conservation. The country’s unit gross domestic product (GDP) energy consumption was three to eight times as much as those in the United States and Japan.

Adjusting the demand of industries is one way to reduce energy consumption intensity. A government announcement made Oct 11, 2007 terminated preferential power rates for high energy consuming industries such as electrolytic aluminium, alloy and chloro-alkaline enterprises.

Tightening management and upgrading technology also help reduce the energy consumption of suppliers as well as consumers. For example, thermal plants were required to adopt highly efficient new technologies for coal burning power generation.

By the end of 2010 China has set a target of cutting down energy consumption per 10,000 yuan ($1,460) of GDP by 20 percent, from 1.22 tons of coal equivalent (TCE) in 2005 to 0.98 TCE. That means an annual average of 4 percent.

Last year, while the overall reduction rate of 3.66 percent still fell short of expectations, more than two-thirds of the provinces met the annual goal. This was in sharp contrast to the first year when only Beijing managed to do so.

NDRC Energy Institute director Zhou Dadi said, efforts by some provincial governments and companies were inadequate.

The government has acknowledged the importance of clean and renewable energy. China has abundant resources in hydropower and wind, solar, biofuel, geothermal and tidal energy. Renewable energy and nuclear power accounted for 7.5 percent of total energy consumption last year. The State Renewable Energy Medium- and Long-term Planning (SREMLP) aimed at raising the renewable share to 10 percent in 2010 and 15 percent in 2020.

The latest statistics available show the country’s nuclear power capacity totalled 9,100 mw, with 11 reactors in operation. By 2020, the State Nuclear Power Development Plan aims at a total installation of 40,000 mw, which would account for 4 percent of the nation’s total power capacity. Compared with the world average of 14.8 percent and close to 80 percent in some leading countries, there was much room for China’s nuclear power development.

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