Updates on the Chinese Energy Sector

1
Updates on the Chinese Energy Sector

• Yanjia Wang
• Tsinghua University, China
• 5th Asia Energy Security Workshop
• 31st October 2007, Beijing

2
Basic Facts in 2006

• Primary energy production 2.21 billion tce,
  7.4 higher than previous year (coal 7.6, oil
  1.9, NG 18.7,)
• Total energy consumption 2.46 billion tce, 9.6
  higher than 2005
• Coal consumption 2.39 billion ton, 10.4 higher
• New installed power capacity 101.17.18GW
• Total power capacity installed 618.35GW, 19.6
  higher
• Power generated 2,865.73TWh, 14.6 higher
  (thermal power 15.7, hydropower 9.8, nuclear
  3.3)
• Petroleum consumption 349 million ton, 7.2
  higher
• Crude oil import (net) 139 million ton, 16.7
  higher
• Petroleum import (net) 169 million ton, 17.9
  higher
• NG consumption 5.56 billion cu.m. 19.9 higher

3
Continue to Control Energy Growth
4
Top Priority 20 EE 10 PR Target

• National 11th Five-Year Plan(2006-2010) 20
  reduction of energy intensity of GDP 10
  reduction of pollutant emission
• First year results 1.23 of EE, not achieved
  year-targets
• Only Beijing achieved the target.
• More efforts are making.
• All measures and actions are for achieving the
  targets.

5
Thousand Enterprises Action Plan

• 9 energy intensive sectors steel, non-ferrous ,
  coal production, electricity generation,
  petroleum, chemical, building materials, textile,
  paper.
• 998 enterprises (1008 in 2004, year- consumption
  0.18 million tce and above)
• These enterprises consumed 670 Mtce, accounted
  for 33 of national total, 47 of industrial
  total in 2004.

6
Sectoral Distribution

• Steel 264
• Non-ferrous 71
• Coal production 58
• Electricity generation 132
• Petroleum Petrochemical 99
• Chemical 240
• Building materials 97
• Textile 23
• Paper 24

7
Four Economic Regions
Northeastern
Eastern
Western
Central
8
Regional Distribution

• Eastern region (Beijing, Tianjin, Hebei,
  Shanghai, Jiangsu, Zhejiang, Guangdong, Hainan,
  Fujian, Shangdong) 390
• Central region (Huibei, Hunan, Henan, Jiangxi ,
  Anhui, Shanxi) 289
• Western region (Inner Mongolia, Guangxi,
  Chongqing, Sichuan, Guizhou, Yunnan, Tibet,
  Shannxi, Gsansu, Qinghai, Ningxia and Xinjiang)
  229
• Northeastern region (Liaoning, Jilin,
  Helongjiang) 100

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10
Re-thinking Tariff Subsidy Policy

• Subsidy low price to large consumers by direct
  supply or sales agreement.
• 2 cent/kWh discount to 13 aluminum plants with
  annual output above 50,000 tone each in 1999
• 2 cent/kWh discount to aluminum, ferrous-alloy,
  alkali enterprises during 2000-2005 when NDRC
  raised tariff.
• New tariff difference regulation in June
  2006(large industry, several elec. intensive
  sectors, industry, etc).
• Review the policy implementation (June 2007)
  partly adopted in Hebei, Fujian, Jiangxi,
  Ningxia, Xinjiang no implementation in Yunnan
  keep subsidy in Sichuan, Hubei.

11
Tariff in Jiangsu Province
12
TOU in Jiangsu Province (Yuan/kWh)
13
Cancel Subsidy to Energy Intensive Enterprises on
Electricity

• New policy published by NDRC, MoF and Power
  Supervision Commission on Oct. 11st, 2007
• By Oct. 20th, 2007, stop subsidies to
  ferrous-alloy sector except got permission from
  NDRC.
• By the end of 2007, stop special subsidies to
  aluminum and adopt elec.-intensive tariff.
• By the end of 2008, stop subsidy to Chlor-Alkali
  .
• Stop all subsidies given by local governments
  right now.
• Penalty suspend new power plant projects (no
  approvals, reduce number of projects)

14
EE Timetable to Large State-owned Enterprises
(Aug. 30 2007)

• 154 enterprises under SASAC(State-owned Assets
  Supervision and Administration Commission of the
  State Council)
• 3 types key 33, attention 66, general 58
• State-owned enterprises produce 100 of oil, NG
  and ethylene, 50 of elec., 15 of coal.
• 230 state-owned enterprises within 1000
  enterprises
• State-owned petrochemical plants consume 5.8 of
  total energy, metallurgy 2.9.
• 2009 target for key enterprises

15
Specific Targets in 2009
16
Re-emphasize to Shutdown Small Coal-fired Power
Plants (Jan. 2007)

• Shutdown
• Below 50MW
• Below 100MW and operated 20 years
• Below 200MW and full lifetime
• Supply efficiency (gec/kWh) 10 higher than
  provincial average or 15 higher than national
  average of 2005
• Failure to reach the environmental standards
• Co-gen
• Replace small co-gen by large ones
• Encourage to build back-pressure and
  biomass-fired co-gen
• Encourage retrofit medium scale power plant (less
  15-years operation) to co-gen
• Limit or stop operation during off-space-heating
  season to those co-gen which coal consumption 10
  higher than provincial average or 15 higher than
  national average of 2005

17
Re-emphasize to Shutdown Small Coal-fired Power
Plants (Jan. 2007) (cond)

• No more higher tariff to small power plants
  (equal or less than local benchmarking tariff)
• Install de-Sox facilities to all generators with
  capacity of 135MW and above
• Surcharge to on-site generation plants (three
  gorges, rural grid, public affaires, renewables,
  emigration)
• Prohibit to transfer public power plants to
  enterprises

18
Medium- Long-term Renewable Energy Development
Planning (Sept. 2007)

• 15 consumption from renewables in 2020 (hydro
  300GW, wind power 30GW, biomass 30GW, solar PV
  1.8GW, solar water heater 300 million sq. m.,
  biofuel 10 million toe, biomass briquette 50
  million ton)
• 8 of capacity is renewables to all power
  companies which total capacity reached 5 GW.
• Total investment required 2 trillion yuan)
• NDRC continues to control power pricing