Asian Energy Security Workshop
Energy Updates of
2003~2004 in China
Aling ZHANG, Yanjia WANG, Alun GU
Tsinghua University
5.12-5.14, Beijing
1
Review energy changes in China
Energy shortages of coal, oil and
electricity in China
Coal production: 1.667 billion tons
electricity: 1901 Twh
oil consumption: 266 million tons
Energy consumption increases
rapidly
2
Energy consumption in China
Million tce
2000
1500
1000
1678
500
536.34
535.99
583.52
698.46
1999
2000
2001
2002
0
2003
Year
Source: BP energy review 2003
3
Energy consumption per capita
Source: BP energy review 2003
4
Recent energy data in China
Consumption
Growth rate compared with 2002
Steel
0.27 billion tons
28.6%
cement
0.836 billion tons
15.3%
Electrolytic aluminium
11.68 million tons
15.7%
Investment in three industries steel,
cement and electrolytic aluminum increased
rapidly this first quarter despite repeated
warning from the national government
5
Overheated investment
the production capacity of steel
industry will reach 0.33 billion tons in
2005 , but the demand is expected to
0.33 billion tons in 2010
In the electrolytic aluminum industry,
the production capacity will outreach
one time than the market expect in 2005
In the cement industry, the total
investment has grew up 133% in the
same period
6
The price increment in raw material
The booming investment has led to a
price increase in raw material for three
industries
Compared with the same period, the
growth rate of some raw material:
Raw material
Growth rate
Crude oil
steel
Iron stone
20%
15%
3 times than the same period
7
Reasons
The demand for steel, electrolytic
aluminum and cement is one reason
for the fast investment
The other reason is that local
governments focus too much on the
economic growth and believe in
investment growth as a method to
push the local economy
8
The national relevant policy and plan
Driven by the high profits, overheat
investment will not slow down without
central government intervention
The central government has sent 10
inspection teams to 20 provinces,
autonomous regions and municipalities
to seek solutions for the investment
growth
9
Electricity Shortage in China
China will still face the shortage in
electricity supply in 2004, just similar in
2003
Provinces 30
25
20
15
10
5
22
24
2003
2004 first quarter
12
0
2002
Electricity blackouts in China comparison
10
Electricity shortage in China
11
Electricity Price in rural areas
From April in 2004, the rural electricity
price (not including Tibet) in China will be
the same with urban price
The power price difference between rural
and urban was 0.5 yuan RMB before
The National Development Reform
Commission adjusts the electricity price,
0.02-0.03/kwh yuan RMB in western
regions, 0.005-0.02/kwh yuan RMB in
central and eastern regions. (9th May)
12
The national relevant policy and plan
in 2004 adjustment and control over
such high-power-consuming industries
regulate and clean up the favorable
price for electricity
Nonetheless, some factories will be
forced to suspend their production
13
The national relevant policy and plan
Many provinces will suffer
electricity blackouts this summer
for the power plants under
construction will run in 2006.
Speed up the national-wide
interconnection of power networks
Increase the power supply and
expand power saving measures
14
Oil price follows global oil
market
The National Development Reform
Commission raised benchmark gasoline
rates by 300 yuan (US$36.5) per ton, or 8
percent, but kept prices of diesel
unchanged on March 31, 2004.
That reflects the price hike on the
international oil market and the price
adjustment is to catch up with the
international crude oil price hike.
15
World Oil Price : 1970-2003 (From EIA)
16
Oil consumption
In 2003, the import dependency of
oil in China is about 36.5%
China imported about 91.12 million
tons of crude oil in 2003, year-onyear rise of 31.29%
In the first quarter, the import oil
volume reached 30 million tons
17
Oil consumption per capita
Source: BP energy review 2003
18
Private-owned vehicles per 100 comparison
1.8
China
0.27
Chongqing
2.31
Tianjin
0.53
Sichuan
1.36
Guangdong
0.54
Shanghai
4.51
Beijing
0.00
1.00
2.00
3.00
4.00
5.00
Private-owned vehicles per 100
Source: China Statistical Yearbook 2002
19
The national relevant policy and plan
How to solve the effect of international
oil price fluctuation on our economy.
In the last years, our focus lies on how
to find the oil and produce oil.
In the futures, China should learn how
to buy the oil in the lower price.
China should take part in the
international oil market.
20
The national relevant policy and plan
Last year China had begun to build
up the oil strategy reserve system.
But this system should be speeded
up under the oil price fluctuation.
Some researches had supposed that
China could build a system of 20 or
30 days, then increase 90 days later.
(from IEA)
21
Expanding Natural gas USE in China
For the reasons of environment,
natural gas use in China had rapidly
increased recent years.
Government hope that gas will
account for at least 10 percent of
energy demand by 2020, up from the
current 3 percent.
22
Map of China’s Primary Natural Gas and
Coal bed Methane Reserves
Source: expanding natural gas use in china 2002
23
Output and growth of natural gas in China
Source: China Statistic Yearbook 2000
24
Natural Gas Usage in China
In the Chinese market, natural gas
usage will be focused in power
generation, followed by the chemical
industry as feedstock, the industrial
sector as fuel, and residential sector as
a cooking and heating source
The end usage is to be located in
northeast China, near the Bohai Sea
and along the southeast coastal
provinces.
25
The national relevant policy and plan
Guangdong Province will import LNG
from Australia in 2005
Fujian Province will import from
Indonesia in 2006
For geographical reason, importing
LNG will have cost advantage in
southern province in China
26
The national relevant policy and plan
China has a priority policy on the
domestic development for the
political reasons
China has set up the Renewable
Energy Promotion Law
China has set up the national midlong technology planning
27
The Regional Alternative path of LEAP
model in China
The base year: 2000.
Data source: from yearbook or the
public report.
There is no change in the structure
of the model.
We modify the data in the LEAP
model.
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Next steps
Adjust some data in our LEAP model
How to realize the energy efficiency
in the LEAP model
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Thank you for your attention
gal@mail.tsinghua.edu.cn
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