The energy crunch in China

China's Coming Energy Crisis

Oil Price,,

8 November, 2012

China is now the world’s largest energy producer, generating 90 percent of energy it consumes. But a white paper released by China’s State Council, which outlines the country’s energy development plans, acknowledges key issues that need to be resolved.

Last year, China’s primary energy production reached 3.18 billion tons of coal, ranking first worldwide. Raw coal reached 3.52 billion tons, crude oil, 200 million tons; and refined oil products, 270 million tons.

The installed electricity generating capacity achieved 1.06 billion kilowatts, while the annual output of electricity was 4.7 trillion kilowatt-hours.

The gap between the overall energy consumption of China's high energy-consuming products and that of advanced international regions is said to be narrowing.

From 1981 to 2011, the country’s energy consumption surged by 5.82 percent every year, representing the 10 percent annual growth of the national economy. Meanwhile, from 2006 to 2011, energy consumption for every 10,000 yuan ($1,585) of gross domestic product declined by 20.7 percent, which saved an energy equivalent to 710 million tons of standard coal.

In China’s view, these make significant contributions to the long-term, steady and rapid growth of the national economy and the improvement of living standards.

But while China has been working to be a self-sufficient nation capable of meeting its own energy demands, development has to overcome many challenges.

First, its per capita average of energy resources is low compared with global standards despite rapid growth seen over the past few years. The same goes with its per capita shares of coal, petroleum and natural gas, which account for 67 percent, 5.4 percent and 7.5 percent of the world’s averages, respectively.

China is also low in terms of energy efficiency. Energy consumption per unit of G.D.P. is notably higher than those of developed countries and some newly industrialized countries. The fraction of energy consumption by the secondary industries, particularly the energy-intensive industrial sectors, is too high in the country's total.

To cope with its challenges, it is being suggested that China strengthen research and development of energy technologies; encourage further advancement of energy equipment technology; initiate major technological demonstration projects; and introduce better innovation to energy technology.

The Chinese government said it has implemented a series of energy-saving renovations, such as boilers, electric machinery, buildings and installations of green lighting products, as part of the efforts to match the rising demand of the world’s most populous nation.

China seeks to boost energy development in rural areas, which usually experience energy shortage. Over the next three years, the country aims to create a total of 200 “green energy counties” and 1,000 villages with solar power as demonstrations.

Renewable energy development

Concerning the development of its renewable energy resources, in 2011 the installed capacity of traditional hydropower reached 230 million kilowatt-hours, the first in the world.

But China also leads the global wind power industry with an installed capacity of 47 million kilowatt-hours. Meanwhile, solar power generation has witnessed swift growth as it reached three million kilowatt-hours.

The country is also undertaking actions to accelerate the use of biogas, geothermal energy, tidal energy and other forms of clean power, the document asserts.

So far, non-fossil energy resources comprise eight percent of China’s overall primary energy consumption, equivalent to eliminating over 600 million tons of carbon emissions per year.

“For a long time to come, fossil energy will continue to dominate the energy consumption mix, posing a growing challenge for protecting the environment and countering climate change. A more environment-friendly energy mix is urgently needed,” China’s State Council acknowledged.

Under the 12th Five-Year Plan for National Economic and Social Development, China aims to raise its renewable energy output to 11.4 percent by 2015. In addition, it also intends to cut its energy consumption by 16 percent per unit of G.D.P. and carbon emissions by 17 percent per unit of G.D.P. both from 2010 levels.

The Chinese government has also committed that by 2020 renewable energy will account for 15 percent of its overall primary energy use, while emissions per unit of G.D.P. will be between 40 percent to 45 percent lower than the 2005 baseline.

“For some time to come, China's industrialization and urbanization will continue to accelerate, and the demand for energy will go on increasing, and so its energy supply will confront increasingly tougher challenges,” the document emphasized.

By. Catherine Dominguez