1 The basic situation of China's energy
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Energy strategy of China 1 CONTENT 1 The basic situation of China’s energy ..................................................1 (1) The state of energy production and consumption ...........................1 (2) The characteristics of energy production and consumption ...........5 (3) The geographical distribution of China’s energy ..........................10 2 The Main Problems of China’s Energy .............................................13 (1) The structural contradiction of energy is sharp .............................13 (2) China is relatively short of energy resources, and lack of enough guarantee .............................................................................................14 (3) China relies on oil import, and the energy security situation is serious .................................................................................................15 (4) Violent contradiction of energy development and environment protection ............................................................................................15 (5) Energy conservation is a really hard task......................................17 3 The Strategic Choice of China’s Energy ............................................18 (1) The management system of China’s energy .................................18 (2) National mid-and-long term program of science and technology 18 (3) The renewable energy development for mid-term and long- term .............................................................................................................19 (4) The Eleventh Five-years Plan of energy .......................................21 (5) The energy status and policy in China ..........................................24 I (6) The Framework of the energy Development ................................26 4 The New Trend of China’s Energy .....................................................28 (1) Further improving the adjustment of the energy structure ...........28 (2) Further improving Energy saving and Emission reduction ..........32 (3) Further improving the development of new and renewable energy .............................................................................................................34 II 1 The basic situation of China’s energy (1) The state of energy production and consumption In 2005, China became the second largest country of energy production and consumption in the world. 1) The total energy production and its structure Since the implementation of reform and opening up, China’s energy industry has achieved great success. The total energy production is among the world top, and the structure keeps optimizing. China’s total energy production between 1978-2000 10000 tce 140000 20000 0 128978 1995 2000 103922 120000 100000 80000 60000 40000 129034 85546 62770 1978 63735 1980 1985 1990 Data sources：National Bureau of Statistics of China 1 year The structure of China’s energy production between 1978-2000 raw coal crude oil natural gas hydropower, nuclear power, wind power, etc. 100% 3.09% 3.77% 4.30% 7.20% 2.91% 2.01% 4.80% 2.98% 1.96%6.20% 2.80% 1.90% 90% 19.01% 16.60% 20.86% 23.70% 23.75% 18.10% 80% 70% 60% 50% 40% 75.30% 74.23% 72.83% 72.00% 70.30% 69.50% 30% 20% 10% 0% 1978 1980 1985 1990 1995 2000 year Data sources：National Bureau of Statistics of China China’s total energy production between 2001-2005 10000 tce 250000 200000 137445 163842 143810 187341 206068 150000 100000 50000 0 2001 2002 2003 2004 2005 year The structure of China’s energy production between 2001-2005 raw coal 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 8.20% 2.90% crude oil natural gas hydropower, nuclear power, wind power, etc. 7.30% 8.10% 2.80% 3.00% 7.70% 2.90% 7.70% 3.30% 17.00% 16.60% 14.80% 71.80% 72.30% 75.10% 76.00% 76.40% 2001 2002 2003 2004 2005 2 13.40% 12.60% year The situation of China's energy production in 2006 Primary Energy production 2.21 billion tce, ranks the second place in the world Raw coal production 2.37 billion tons, ranks NO.1 in the world Crude oil production 185 million tons, ranks the 5th place in the world Natural gas production 58.6 billion cubic meters Commercialized renewable The ratio in primary energy structure increasing gradually energy Electricity power The installed capacity and Power Generation has reached 622 million kilowatts and 2.87 trillion kwh, both of them rank the second place in the world Transportation system of Railway line and port wharf for coal transportation from energy west to east has been built, and the pipeline nets for oil transport from north to south has been formed, what’s more, the main pipeline for gas transportation from west to east has been completed, power transporting from west to east and the regional power grid interconnection has been implemented. 2) The total energy consumption and its structure China’s total energy consumption between 1978-2000 10000 tce 131176 140000 120000 100000 80000 60000 138553 98703 76682 57144 60275 40000 20000 0 1978 1980 1985 1990 3 1995 2000 year The structure of China’s energy consumption between 1978-2000 raw coal 100% 3.40% natural gas hydropower, nuclear power, wind power, etc. 4.90% 3.10% 4.00% 3.20% 90% 80% crude oil 5.10% 2.20% 6.10% 2.10% 6.70% 1.80% 22.70% 20.80% 17.10% 16.60% 17.50% 70.70% 72.20% 75.80% 76.20% 74.60% 1978 1980 1985 1990 1995 2.40% 23.20% 70% 60% 50% 40% 30% 67.80% 20% 10% 0% 2000 year China’s total energy consumption between 2001-2005 10000 tce 250000 203227 223319 2004 2005 174990 200000 151797 143199 150000 100000 50000 0 2001 2002 2003 year The structure of China’s energy consumption between 2001-2005 raw coal 100% 7.90% 2.60% 90% 80% crude oil natural gas 7.70% 2.60% hydropower, nuclear power, wind power, etc. 6.80% 2.60% 7.10% 2.60% 7.20% 2.90% 22.90% 23.40% 22.20% 22.30% 21.00% 66.70% 66.30% 68.40% 68.00% 68.90% 2001 2002 2003 2004 2005 70% 60% 50% 40% 30% 20% 10% 0% 4 year The situation of China’s energy consumption in 2006 Primary Energy Consumption 2.46 billion tons of standard coal The proportion of coal and charcoal declined from 72.2% in 1980 to 69.4% in 2006 in primary energy consumption The proportion of other energies increased from 27.8% in 1980 to 30.6% in 2006 The proportion of renewable energy grew from 4.0% in 1980 to 7.2% in 2006 and nuclear power The proportion of coal and charcoal soared from 20.7% in 1980 to 49.6% in 2006 energy transformed into electricity power (2) The characteristics of energy production and consumption 1) The energy consumption is more than energy production Comparison of total production and total consumption of China’s energy between 1992-2005 total production of China's energy 10000 tce 250000 total consumption of China's energy 200000 150000 100000 50000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 5 year Variation trend of the balance between consumption and production of China’s energy 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 10000 tce 15886 17251 11148 9575 7964 4934 6332 7987 5754 5388 4008 2142 1914 1992 7896 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 year Comparison of the average annual growth rate of China’s energy consumption and production average annual growth rate of average annual growth rate of energy production energy consumption (%) (%) period 1979-2005(27 years) 2001-2005(a half decade) 4.50 9.82 5.18 10.02 2) The energy structure is coal-based Production structure of China’s energy in 2005 raw coal crude oil natural gas hydropower, nuclear power, wind power, etc. 3.30% 7.70% 12.60% 76.40% 6 balance (%) -0.68 -0.20 Consumption structure of China’s energy in 2005 raw coal crude oil natural gas hydropower, nuclear power, wind power, etc. 2.90% 7.20% 21.00% 68.90% 3) Power plays an important role in energy structure In 2005, the total installed capacity of power generation reached 508 MW, and the generated energy was 2500.3 billion KWh. Both of them ranked the second place in the world. The energy consumption in power generation and its proportion in the total energy consumption between 1995-2005 the energy consumption in power generation 100000 10000 tce 45% 90000 34.17% 80000 70000 the proportion of it in the total energy consuption 30.90% 28.35% 29.34% 35.52% 38.76% 37.84% 38.40% 76896 32.90% 67825 50000 37185 40765 42583 43499 45730 49208 85759 40% 35% 30% 58882 60000 40000 37.02% 38.79% 53013 25% 20% 15% 30000 20000 10% 10000 5% 0 1995 1996 1997 1998 1999 7 2000 2001 2002 2003 2004 0% 2005 year China’s power consumption and its proportion in the total energy consumption between 1995-2005 China's power consumption its proportion in the total energy consumption 0.1 billion KWh 30000 13.25% 13.99% 13.91% 13.93% 24940 12.47% 25000 11.27% 11.73% 20000 9.77% 9.92% 14.38% 21971 10.42% 15000 10023 11284 14% 12% 19032 10% 16465 10764 16% 11598 13471 12305 14723 8% 6% 10000 4% 5000 2% 0 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 year 4) Oil is in great demand, and its net import volume increases Comparison of China’s oil production and consumption between 1993-2005 10000 tons oil production oil consumption 35000 30000 25000 20000 15000 10000 5000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 year oil production 14524 14608 15005 15733 16074 16100 16000 16300 16396 16700 16960 17587 18135 oil consumption 14721 14956 16065 17436 19692 19818 21073 22439 22838 24787 27126 31700 32535 8 The gap between oil consumption and production and the import volume of China net oil importation 16000 the balance between oil consumption and production 10000 tons 15051 14113 14000 12000 7576 6000 5073 3618 4000 1703 1219 988 1395 348 197 290 1060 1993 1994 1995 1996 3384 1997 3718 6139 7072 10000 8130 8087 8000 6442 6000 4000 4381 2913 2000 1998 1999 2000 2001 2002 2003 2004 0 2005 year 5) Industry sector is the main energy consuming group The composition of China’s energy consumption in 2004 other types of tertiary-industry, 3.9% whole sale, retail, catering industry, 2.3% 14000 12000 10166 8000 0 14275 10649 10000 2000 16000 14400 consumption for life, 10.5% agriculture, forest industry, animal husbandry, subsidiary business, fishing industry, water conservancy, 3.9% traffic, transport, storage, post and telecommunications, 7.3% building industry, 1.6% industry, 70.5% 6) Energy consumption in resident life increases 9 The growth rate of per capita residential electricity consumption and per capita residential energy consumption between 1981-2005 16% 14% 12% 10% 8% 6% power consumption for life, 14.08% power consumption, energy 8.83% consumption per power capita, 4.19% consumption per energy for capita, 7.60% resident life, energy 3.06% consumption, energy for 5.38% resident life per capita, 2.46% 4% 2% 0% (3) The geographical distribution of China’s energy 1) Coal Source: China's General Administration of Coal Geology 10 power consumption for resident life per capita, 12.79% 2) Oil and gas Distribution of oil and gas field in China Source: JINGZHUN oil forum 3) Hydropower Source: CWSnet http://www.cws.net.cn/ 11 4) Wind power Source：XinhuaNet 5) Solar power Source：China Meteorological Administration 12 6) Nuclear power Haiyang Tianwan Tongshan Qinshan Sanmen Huian nuclear power plant existed nuclear power plant under construction nuclear power plant to be built Dayawan Yangjiang 2 The Main Problems of China’s Energy (1) The structural contradiction of energy is sharp 1) Oil supply cannot meet its demand 2) Natural gas and hydropower possess a low proportion 13 The proportion of natural gas and hydropower in 2005 7.7% 7.2% 8.0% 6.0% 3.3% 4.0% 2.9% 2.0% hydropower 0.0% natural gas production consumption (2) China is relatively short of energy resources, and lack of enough guarantee 1) The per capita energy resource possession is relatively low The proportion of China’s per capita energy resource possession of the world’s average level coal 50% hydropower 50% oil about 15% natural gas about15% arable land ＜30% 2)The energy resources are difficult to develop, and its regional distribution is uneven Much of the resource is distributed in north but less in south, and rich in west but poor in east. We may describe the regional distribution feature of energy variety as north coal, south water, and west oil and gas, while 14 Chinese developed region locates in eastern area and southeastern area, and what’s more, energy is in great demand there. It’s difficult to develop energy resource such as coal, oil and hydropower, etc. (3) China relies on oil import, and the energy security situation is serious The situation of China's dependence on foreign oil between 1993-2005 47.5% 43.9% 39.3% 33.8% 31.0% 32.8% 20.8% 17.2% 14.7% 7.6% 8.0% 6.7% 1.9% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 (4) Violent contradiction of energy development and environment protection Environment protection of China’s energy has made certain progress to some extent. In 2006, both the installation rate of dust facilities for coal-fired units and the qualified rate of wastewater discharge have reached nearly 100%.The dust emissions have reduced by 90%. The violent contradiction between China’s energy development and environment protection still exists; acid rain area has already covered 1/3 15 of our territorial because of Sulphur dioxide gas discharging. In recent years, Carbon Dioxide emission (measured in C) is 9 billion tons, which is about 13% of the whole global emissions. SO2 emission in China between 2001-2005 10000 tons 3000 2549 2500 2158.7 1947.8 2000 1926.6 381.2 366.9 2254.9 381 363.5 364.6 life industry 1500 1000 1566.5 1562 2001 2002 1791.4 1891.4 2003 2004 2168 500 0 2005 year Dust emission in China between 2001-2005 10000 tons 1400 1200 1069.8 1000 217.9 1182 1012.7 1048.5 202.5 208.5 1095 208.5 233 800 life industry 600 400 851.9 804.2 846.1 886.5 949 2001 2002 2003 2004 2005 200 0 16 year (5) Energy conservation is a really hard task Between 1980-2006, national economy increases by an average annual growth rate of 9.8%, which is supported by China’s energy consumption with an average annual growth rate of 5.6%. According to a fixed price in 2005, energy consumption per 10 thousand RMB GDP decreases from 3.39 tce in 1980 to 1.21 tce coal in 2006, average annual conservation rate is 3.9%, which has prevented the increasing trend of energy consumption per unit GDP. The comprehensive efficiency rate of energy processing, transmitting, stocking and delivery and usage is 33%, which rose 8 percentage points than that in 1980. However, there’s still a gap between China and the world advanced level on utilization efficiency and economic benefit of energy. The unit consumption of high energy-consuming production is about 40% higher than the average level in developed country. Energy consumption per unit output value is as much as 2.3 times of world average level, utilization efficiency rate is more than 10 percentage points lower compared with world average level. 17 3 The Strategic Choice of China’s Energy (1) The management system of China’s energy the national energy leading group NDRC MLR SASAC MOC MOF MOST Bureau of energy SEPA SAWS SACMC (2) National mid-and-long term program of science and technology 1) Outline of energy development Energy conservation comes first so as to reduce energy consumption To promote the diversification of energy structure and its supply To promote clean and high-efficiency utilization and reduce the environment pollution To enhance the digestion, absorption and secondary innovation of technology introduction for the energy facilities To promote technology capability of optimizing energy regions 2) The Prior subjects of energy development Industry energy conservation The clean, high-efficiency utilization and development, liquefaction, 18 SERC and poly-generation The exploration and utilization of complex geographical oil and gas resources The development and utilization of low-cost and large-scale renewable energy Power transmission and distribution in ultra-large scale and the security guarantee of power network (3) The renewable energy development for mid-term and longterm 1) Overall goal In the following 15 years, enlarge the proportion of the renewable energy in the whole energy consumption. Solve the problem of the non-electricity in the remote area and the lack of the living fuel in the rural area. Promote the combination of the organic offal and the energy; promote the industrialized development of the renewable energy technology 2) Specific goals Make full use of the water and electricity, marsh gas, solar power and terrestrial heat which is well developing in the technology and economic renewable energy. Accelerate the industrialized development of the wind-driven electric power, Biomass electric power, and solar electric 19 power. Enlarge the proportion of the high quality and clean renewable energy in the whole energy consumption. Work hard for the 10% proportion of the renewable energy in the whole energy consumption in 2010 and make it 15% in 2020. Using the renewable energy to solve the problem of the non-electricity in the remote area and the lack of the living fuel in the rural area with specific measures to local conditions, and at the same time protect the environment. With the circular economy mode, promote the transferring of the organic offal to the energy, and eliminate the environmental pollution causing by the organic offal basically Promote the industrialized development of the newly-renewable energy technology, set up the system of the renewable energy innovation and form a sound industrial system of the renewable energy. Realize the capacity of mainly using the domestic equipment in 2010. Realize the capacity of mainly using the domestic intellectual property rights on renewable energy equipments. 3) Important domains in the development Hydropower Biomass energy Wind Power Solar energy ① Solar power generation 20 ② Solar thermal utilization Other renewable energy Utilization of renewable energy in countryside (4) The Eleventh Five-years Plan of energy 1) The overall arrangements Develop the coal in the right order; accelerate the development of the petrol and the natural gas; under the precondition of protecting the environment and making a good job on the migrants, develop the thermal power plant and nuclear-electricity. Accelerate the exploitation on the coals of Shanxi, Guangxi and Jiangxi Provinces, oil gas of the mid and west area, water electricity at Southwest and improve the capacity of the energy transmitting. Optimizing the exploitation of the coals at the east area and the oil gas on the ground, Stabilize the production capability and relieve the pressure of the energy transmitting .Significantly develop five energy projects. 2) Development targets Total Consumption and the structure In 2010, the aim of energy Consumption at one time is around 2.7billion tons of the coal, increasing by 4% per year. 21 2010 2005 80% 70% 66.1% 69.1% 60% 50% 40% 30% 20.5% 21.0% 20% 6.8% 10% 5.3% 2.8% 6.2% 0.9% 0.8% 0% coal oil natural gas nuclear power hydropower 0.4% 0.1% other renewable energy Total Production and the structure In 2010, the aim of primary energy production is around 2.446 billion tons of the coal, increasing by 3.5% per year. 2010 90% 80% 2005 74.7% 76.5% 70% 60% 50% 40% 30% 20% 11.3% 12.6% 10% 5.0% 7.5% 6.7% 3.2% 1.0% 0.9% 0.5% 0.1% 0% coal oil natural gas nuclear power 3) The main constructing projects Energy Base Construction Project Exploit the coal bases orderly Accelerate the development of the oil gas base 22 hydropower other renewable energy Exploit the water electricity base actively Optimizing the construction of the coal-electricity base Accelerate the development of the nuclear-electricity base Energy reserving and transmitting project Channels and harbors for coal transmitting The net of the pipes for transmitting the oil gas The establishment of the electric net Petroleum substituted project Renewable energy industrialized project The energy project of the new socialist countryside 4) The Advancement of the Technology Develop advanced applied technologies first Primary coverage Resources exploration and High efficiently mining of coal, exploring and developing oil and gas development resources under the complex geological conditions, developing technology of oil and gas resources and coal bed gas under the ocean Cleaning utilization coal Nuclear power station of Coal washing and selecting, clean and efficient power generation, coal-based liquid fuel and chemical engineering, etc. Million-kw scale advanced pressurized water reactor nuclear power technology Super-scale distribution Flexible power transmission, higher grade voltage transportation, system and network intermittent power grid-connected , power quality monitoring and secondary system control, Security assurance and automation technology for power grid dispatching of large-scale interconnected power grids Developing and utilizing Large scale wind turbines, biomass electricity generation of renewable energy sources agriculture and forestry, methane power generation, fuel ethanol, in the way of low-cost and solid-shaping fuel of biodiesel and biomass, key technology of solar extending-scale energy development and utilization 23 Strengthen researches on frontier technologies of energy Primary coverage Hydrogen energy Producing hydrogen with fossil energy and renewable energy in the and fuel cell way of high-efficiency and low-cost, economical and efficient hydrogen storage, transportation and distribution, key technology of fuel cell, etc. Distributed energy Micro gas turbine, terminal energy conversation as new type supply system thermodynamic cycle, energy storage, heating-power-cooling overall technology, etc. Nuclear power of high temperature gas-cooled reactor, fast breeder reactor, and nuclear future fusion reactor technology, etc. Natural gas hydrate Geological theory about natural gas hydrate, resources exploring and assessing, well drilling and safety mining technology, etc. (5) The energy status and policy in China In December 2007, State Council Information Office issued “The energy status and policy of China”. It was the first time for Chinese government to issue the white book in recent ten years .This white book summarizes the energy status in China, introduces the accomplishment, clarifies the policies of the development concerning the energy in China. It is the guarantee of the implement of “Energy Development Layout in ‘the Eleventh Five-year Plan’”, “the Renewable Energy Development Layout in Mid and Long Term”and some other energy programs. 1) Measures of comprehensively implementing the actions of energy saving Promote the adjustment of the structure Implement the energy saving project Advocate energy saving in society 24 Improve energy saving in industry Improve energy saving in management 2) Measures of improving the capacity of energy provision Develop coals orderly Accelerate the development of oil and gas Reinforce the construction of the rural energy Actively develop the electricity Develop the renewable energy with strong force 3) Measures to accelerate the development of the energy technology Popularize the energy-saving technology with strong force Improve the ability of equipment producing Open up basic technology research Improve the innovation of the key technology Reinforce the research on the frontier technology 4) Measures of promoting the harmonious development between the energy and the environment Entirely control the ejection of the greenhouse gas Prevent and cure the zoological destroy and environmental pollution with great force Prevent and cure the pollution of the offal from the motor vehicle Be strict to the environmental management of energy projects 5) Measures of deepening reform of the energy system 25 Perfect the legislation on energy Improve the emergency-dealing system Deepen reform of the energy system Strengthen the safety production Accelerate the development of the market system Improve the reform of the price system 6) Measures of improving the international cooperation Perfect the exploration and the exploitation of the oil gas with the international cooperation Encourage the foreign merchants to invest in exploration and the exploitation of the unconventional energy Encourage the foreign merchants to invest in and manage the establishments like the electrical station. Improve the environment of the investment fort the foreign merchants Expand the domain of the foreign investment (6) The Framework of the energy Development 1) The Overall strategy of the energy development Stick to the thoughts of saving the energy, domestic developing, varied development, environmental protection, strengthening the international cooperation which brings the mutual benefit, building a stabilized, economic and clean energy provision system. Let the sustainable 26 development of energy support the sustainable development of the economy and society. 2) The strategy of energy exploitation Adjusting and optimizing the structure of energy, with the core of integration of the coal electricity, promote balanced development of coal, electricity, oil gas and new energy, accelerate the development of the west area to guarantee the safety of the economy and energy. 3) The Strategy of the energy trading Guided by the market, centered by the economic benefit, make full use of the domestic and foreign market, two resources, and varies ways of imports and exports to meet the need of the energy development. 4) The Strategy of the energy saving With the generalized energy saving as the basic, industrial saving, petrol saving and electricity saving as the core, depend on the improvement of the technology, boost the economic efficiency of the energy. 5) The Strategy of the energy environmental protection With the combination of the generalized energy saving and generalized environmental protection, highly attach importance to and realize the exploration and the exploitation of the coal energy with high quality, advance the harmonious development of the energy, economy and development. 6) The Strategy of the energy technology 27 With the main body of the enterprises, guided by the market, build and perfect the technology innovation system combined with “enterprises, university and research institutions”, improve the ability of the independent innovation; enlarge the population full of innovative spirit. Trying hard from all aspects and make significant breakthroughs to promote the sustainable development of economy and society. 4 The New Trend of China’s Energy (1) Further improving the adjustment of the energy structure 1) Coal is the basis of the energy in China Adjust the structure and overall arrangement, exploit the clean and high quality coal, advance the efficiency of the energy using, develop circular economy, and improve the environment. Adjust the structure of the industry Adjust the distribution of the coal construction Advance the efficiency of the energy using, develop circular economy Increase the finance devotion, treat comprehensively, and improve the environment around the diggings On 29 November 2007, “Coal and Charcoal Industry Policy in China” was issued formally. It was based on some practices of the coal developing and some related documents of law and documents like “the 28 Act of the Coal”, “Mineral resources Act, the “Coal and Charcoal Industry Policy in China”. It makes rules at the aspects as the distribution, organization, trading and transporting, energy saving and the environment protection, labor protection of the industry. 2) Oil and gas is the valuable and high quality energy Make full use of the domestic and foreign resources and the both market , reinforce the exploitation of the resources and implement the “ Go out “ policy, set up the petrol production base abroad, realize varied way of supplying the petrol. Enhance the exploitation of the energy, increase the petrol industry reserve Increase the policy support; create the good conditions for the foreign petroleum exploitation Set up the system of the strategic petroleum reserve; ensure the safety of the nation’s petrol. Strictly enforce the saving, increase the utilization ratio of the petrol “The Natural Gas Policy” has been issued on 30th August; 2007.Of all the natural use in the land of China should abide by the policy. The policy mainly includes 6 parts. The Necessity to establish the regulation The range of the apply and the main part of the management Directing thought and the basic principles 29 The domain of the natural gas using and the it’s order Improve the saving of the natural gas The guarantee measures 3) Electric power is a clean and important secondary energy source Carry on increasing the proportion of the electric power use in the whole energy use, adjust the electric power structure and improve the energy efficiency Improve the construction and the development of the electrical grid Improve the structure of the electricity power Adjust the structure of the electricity power composition Optimizing the structure of the sets 4) Renewable energy is non-polluted and everlasting resources Grasp the opportunity of the implement of the “Renewable Energy Law of the PRC”, increase the exploitation and the use of the renewable energy, depend on the advanced foreign technology, and realize the combination of the industrial development and the economic benefit. The law was issued at the Tenth National Congress of the Communist Party of China at 28 February 2005. The core part of the law is as followings: The nation should set up a clear goal for the renewable energy development and realize the goal in every city and province, and make related policy to make it come true. 30 The nation should encourage the use of the renewable energy, encourage the project of the in grid electricity, encourage the use of the clean and high efficiency biomass fuel, encourage developing the crops of the energy resources, encourage the units and people using the solar systems like solar hot-water system, heat and refrigeration provision and photovoltaic power system. Encourage and support the renewable energy development in the rural area. The nation should regulate the electricity price of which the electricity from the renewable energy. The nation should set up the specific fund and implement the incentive policies. Six coordinated policies of the law: Establish the mid and long term programming of development for the renewable energy, make clear of the goal of the renewable energy development Organizing the investigation and exploitation evaluation system of the renewable energy. Establish the energy foundation of the expansion of the use and exploitation of the renewable energy. Set up the directory of the renewable energy industry, set up the admission into the market and the management measures of the administration permission Set up the price system of the renewable energy, set up the system of 31 the cost division of the renewable energy. Set up the project of the technology industrial development of renewable energy and the related policy and supporting measures. Set up the quota management system for the goal of renewable energy development. (2) Further improving Energy saving and Emission reduction 1) The main goal of the Energy saving and Emission reduction To 2010, the energy cost for making 10, 000 RMB of GDP will decrease from 2005’s 1.22 ton coal to below 1 ton, decreasing by 20 percent; the water use for industry will decrease by 30%. During the period of the “Eleventh five-years plan“, the total emission of the main pollutants will decrease by 10% and until 2010, the emission amount of the SO2 will decrease from 2005’s 249 tons to at least 2295 tons, the amount of COD will decrease from 14, 140, 000tons to 12, 730, 000 tons, the sewage disposal proportion in the cities of China will above 70% and the industrial solid emission will have been used again at the ratio of above 60%. 2) The key points and the measures of Energy saving and Emission reduction Efficiently control the fast speed of the high polluted and high energy consuming enterprises. 32 Accelerate eliminating the backward throughput through the competition Comprehensively implement the key projects of Energy saving and emission reduction. Do well on the Energy saving and emission reduction of the key enterprises Improve the technology of the Energy saving and emission reduction Improve the circular economy with great force. Perfect the system and policy Enlarge the investment of the Energy saving and emission reduction. Reinforce the law of the Energy saving and emission reduction Enhance the supervision and management of the Energy saving and emission reduction. 3) Bring the Energy saving and emission reduction into the check and evaluation of the national enterprises In 2007--2009, the goal of Energy saving and emission reduction for the national enterprises is: Petroleum industry’s consumption on the main products should the meet or above the global level, the energy cost for making 10, 000RMB of GDP should be decreased by 16% compared with that in the year of 2005 . The emission amount of the SO2 should decrease 9.3% and the oxygen demand for the chemistry decrease about 8.4%. 33 The Steel industry’s index on the Energy saving and emission reduction should meet the advanced global standard, key enterprises’ singe consumption should meet the global level. The energy cost for making 10000RMB of GDP should be decreased by 16% compared with that in the year of 2005. The emission amount of the SO2 should decrease 16% and the oxygen demand for the chemistry decrease about 23%. Firepower electricity generation enterprise’s annual coal consumption should meet the global average level, the consumption should be decreased by 5.1%, and the consumption of SO2 should be decreased by 27.8%. The single consumption of the main products in the chemical industry should meet the global level and the energy cost for making 10000RMB of GDP should be decreased by 16% compared with that in the year of 2005. The emission amount of the SO2 and the oxygen demand for the chemistry should be decreased by 8%. (3) Further improving the development of new and renewable energy 1) one year after “Renewable Energy Law of the PRC” issued China is abundant in renewable energy, available consumption of water energy is up to 400 MKW, available biomass energy consumption is 1 billion tce, and available energy of the wind power got from the ground is 34 300MKW. Wind power from the sea has more potential. 2 out of 3 of the inner land had the nice condition to use the solar energy. In 2006, the consumption of renewable energy in the whole year was up to about 0.18 billion tce, took up of the single energy consumption of 7.5%, the consumption of SO2 decreased by 3million tons which saved 1billiom stere of the annual water consumption .This has made a huge contribution to the energy provision, environment protection and the development of the society and economy. At present, of big state-owned enterprises like National Grid, 5 electricity generation companies, 3 petrol corporations, Shenhua Group, Changjiang Electricity Power, Guanghe Group and some local energy investment companies have entered the domain of the renewable energy. In addition, renewable energy has attracted the interests from a lot of private enterprises. Many private enterprises have been into the domain of the renewable energy and they add new idea, capital and technology into this industry. At the end of 2006, there will be about 100 companies which produce wind power and related components. 30 of them are ready to join the big wind power manufacturing .The proportion of the domestic wind power electricity sets has been increased dramatically. The ratio of newly added sets has been above 40%. There have been 2 enterprises of photovoltaic power battery whose production ability has been above 100 mega-watts, 35 2 of which has been at the forward level of the world. The number of enterprises which made solar water-heaters has been over 3000. The income of 10 among these enterprises has exceeded 100million RMB. In 2006, the capacity of the newly-added sets of the hydropower electricity has been above 10 MKW, adding up to 0.12 billion kilowatts; the capacity of the newly-added sets of the wind power electricity has been above 1. 33 MKW, adding up to 2.6 MKW, which equals to 20 years’ summation. The capacity of the solar water-heater production has been above 20 million square meters, adding up to 95 million square meters. The biomass energy use has showed a varied-developing situation, there were 22.6 million households using the marsh gas in the country side, there were 2000 big and mid marsh gas projects, the whole year’s using amount of marsh gas is about 10 billions stere, the electricity generation projects of the rural stalk and straw for demonstration has been put into use and the zoological liquid fuel has been advanced comprehensively, the biomass fuel experimental units have made the first development. 2) “International Science and Technology Cooperation Program on New and Renewable Energy” On 12 December 2007, the Ministry of Science and Technology and the National Development and Reform Commission held the press together and formally issued and started the “International Science and 36 Technology Cooperation Program on New and Renewable Energy”. This is another policy issued by Chinese government to promote the Science and Technology Cooperation internationally and accelerate the development of new and renewable energy. Principles of the program Mutually Beneficial and Win-Win Cooperation; Intellectual Property Protection; Sharing of Advanced Technology; Integration of Strengths; Innovation in Technology Priority fields of the program Solar Power Generation and Building-integrated Solar Energy; Biomass Fuels and Biomass Power Generation; Wind Power Generation; Hydrogen Energy and Fuel Cells; Development of Gas Hydrates Major tasks of the program Carry out Basic Research; Develop Commercialization Demonstrations ; Orient towards Scale Application; Pursue the “Go-out” Strategy; Promote International Exchanges and Dialogues; Nurture High-caliber Professionals Organization and Management Setting up an Organizing Agency The implementation of the Program will be jointly organized by the Ministry of Science and Technology (MOST) and the National Development and Reform Commission (NDRC) of China, and carried out 37 by government agencies, international organizations and major research institutes. A Steering Committee on International S&T Cooperation will be established for the Program to initiate mechanisms for international joint endeavors. MOST and NDRC will extend worldwide invitations to high-level experts on new and renewable energy in a bid to establish an Expert Consultation Committee on International S&T Cooperation to provide the Steering Committee with suggestions on priority fields, major tasks, and cooperation patterns of the Program. Allocating Special Funds Special funds will be arranged for the launch of the Program with a view to attracting financial input from foreign governments and international organizations to get the Program implemented. Equal attention will be given to soliciting private capital and investment from the business sector, especially the international energy giants, with an aim to stimulate international S&T cooperation on new and renewable energy. 38
