Energy Transformation on a Roll

One of three types of energy favored for increased use: solar panel installation in Yichang, Hubei Province. Cnsphoto

ACCORDING to the National Statistics Bureau, China’s gross energy consumption in 2009 mounted to 3.1 billion tons of standard coal, confirming China’s image as a real powerhouse of global energy consumption. Although its per capita consumption is still low – the equivalent of 2.33 tons of standard coal in 2009 as compared to 10.37 tons in the United States, unfortunately China’s energy composition is dominated by coal, whose utilization is currently inefficient. Then there are its other drawbacks – the scars and stresses sustained by environments during mining and burning. Hence, changing the energy structure and getting cleaner energy on stream appear to be the priorities for Chinese sustainable development.

Recently, China Today conducted an exclusive interview with Zhou Dadi, deputy director of the National Energy Expert Consulting Committee and researcher with the Energy Research Institute of the National Development and Reform Commission, inviting him to give us an across-the-board introduction to China’s energy optimization plans.

High Growth, High Consumption

China is now up to advanced world levels of gross energy consumption, and, to sustain the rapid growth of its economy, will stay that way for now, explains Zhou Dadi. These conditions put it on a continuous quest for more energy resources. Such strong demand is to be expected; as a developing country, China still has many miles to cover on the industrialization journey.

On the whole, however, China consumes too much energy – though its per capita consumption is essentially lower than nearly all the developed countries, and only one-fourth or fifth that of the U.S. Strategies to whip up its economic growth have hinged too much on industrial investment, causing a high unit GDP energy consumption. Therefore, the Chinese government has been transforming its growth mode to achieve balanced development.

China has been self-supporting on energy for a long time, but is heavily dependent on coal mining and short of petroleum reserves. Naturally, the extent to which the coal option is selected has been due to the prevalence and convenience of the resource. Although abundant reserves of natural gas have been proved, the total proportion is still insignificant. In addition, viewed from the angle of global energy trading, China the consumption powerhouse is not the biggest buyer in the world energy market. Annual petroleum purchases average 200 million tons compared to the United States’ 600 million tons. Japan keeps its petroleum purchases to just over 200 million tons, but imports a small sea of liquefied natural gas from other countries. Europe is well out front as the leading importer of petroleum and natural gas. From the quantum of energy trading, domination of the world’s energy market is still well out of China’s reach.

China, limited by its existing energy reserves, is left with a situation where coal dominates; nearly 70 percent of all energy utilization is accounted for by coal. Meanwhile petroleum represents 18 percent and natural gas only 3.9 percent. The remaining 7.8 percent is provided by nuclear, hydroelectric and wind power. All told, this configuration is glaringly different from the world’s average energy consumption structure.

China has made great efforts in energy restructuring, intensifying the development and utilization of non-coal energy, especially relatively clean energy such as hydroelectric power, nuclear power and natural gas. Zhou notes that attempts to restructure energy consumption couldn’t be expected to succeed on the first try; once formed, it is harder to reform. We have built up an annual consumption pattern of over 3 billion tons of coal. Finding new energy to supplant it outright is not child’s play. Coal has been used in China for over 100 years. Hardly any single energy source can be expected to supersede this fossil fuel soon, not even petroleum, which has been used for decades. Any energy shift implicates untold layers of society and infrastructure; it will take time.

China’s Model Reversed

Higher energy consumption per capita GDP has driven China to attach great importance to energy efficiency, especially as it is one of those countries whose progress has been fast-tracked.

Zhou Dadi points out that in recent years, China has made rapid progress adopting new energies, raising energy efficiency and eliminating backward production methods. Meanwhile, China is whittling away its technological gap with the developed countries in the high energy consumption industries, such as the electricity generation sector and petrochemical industries.

However, problems lie ahead. Energy resources are squandered in production and industrial development. In developed countries, only one-third of generated energy goes to industry and the other two thirds, or nearly 70 percent, are consumed by construction and transportation. Zhou notes, the shoe is on the other foot in China: industrial consumption takes up more than 70 percent of the total, in which the steel, chemicals, building materials, electricity generation, petrochemical and nonferrous metal industries bring the tally to nearly 50 percent. This flags a situation that combines high energy consumption with low output – a problem crying out for a solution in the near future.

Zhou Dadi interprets matters this way. Since reform and opening-up in 1978, especially from 1980 to 2002, the annual rate of energy use increased in efficiency by 4.6 percent (energy consumption per unit GDP). This is lightning speed, compared with the world’s average rate of increase – between 1.1 percent and 1.2 percent. The first couple of years of the 21st century saw relative stagnation in the pace of energy efficiency, while from the beginning of 2006 onward this laggard situation was gradually reversed, when the Chinese government set the task of reducing energy consumption by 20 percent. From 2005 to 2009, the average rate of decrease reached 4.1 percent, far steeper than the global average, or that of the world’s leading developed countries.

Cleaning Up

Besides energy restructuring, China’s projects on developing and utilizing clean energy have picked up the momentum. The proportion of clean energy in the mix keeps climbing. China assumed the global lead in developing wind energy, achieving a 20 million kW annual installed capacity. Moreover, China leads the way in the development and utilization of solar and renewable energy.

More acutely than the developed world, China confronts the problem of optimizing its energy use structure, and in particular managing its shift away from low-efficiency, highly polluting sources. Plans for developing clean energy need to be informed by actual conditions in China, which point to increasing the ratio of primary energy (hydroelectric, nuclear power and natural gas) on the one hand, and on the other, fully and efficiently using existing energy resources.

We should not simply define clean energy as a new type of energy or a renewable energy. Chinese “clean energy” should include traditional fossil fuels used in a clean way. Representing the largest fossil-fuel resource in China, coal use demands the development of clean and efficient technologies. Advanced technology to filter out coal impurities, raise energy efficiency and reduce carbon emissions are good starting points for clean-energy development. Adopting new technology means coal could be converted into a clean energy source, which points to a major way out of the dilemma.

Zhou Dadi stressed that China is hatching plenty of projects to test clean-energy mechanisms, many of which, after official ratification, have reduced carbon emissions significantly; in fact we now register approximately half the emissions of the world’s developing countries. “However,” he cautions, “that’s just supplementary to developing clean energy technology; we can not entertain lofty expectations, but rather rely on our own efforts.”

To fulfill the energy conservation agenda, China needs to form a multiple-resource energy profile, achieved by stepping up the proportion of nuclear power, hydroelectric power, natural gas and solar energy consumed. The existing import volume of petroleum must be maintained to keep coal dependency from becoming any more disproportionate. If China can choke down the ratio of coal use to 30-40 percent, while leaning more heavily (up to 20 percent of the total) on nuclear power, hydroelectric power and natural gas, that would be the ideal consumption structure.