China boasts great potential in energy resource exploitation. Coal resources already verified only account for 13 percent of the total deposits, and recoverable reserves account for 40 percent of the discovered resources. Only 20 percent of the country's hydropower resources have been utilized so far. Verified oil reserves are 33 percent of the total deposits, and China has begun to enter the middle phase of oil prospecting, still seeing a big potential. Proven reserves of natural gas account for 14 percent, showing that China is in the early stage of exploration and indicating bright prospects in this sphere. Regarding non-conventional energy, China is still at the early stage of exploitation and utilization, with a great potential for development. As for renewable energy, China has only just started in its exploitation and utilization, so there is immense room for development in this regard. Good prospects are also seen for conserving, making comprehensive use of and recycling resources.

To increase its energy supply capacity, China will take the following measures:

-Developing the coal industry in an orderly way. Coal is a basic energy in China, and it is an urgent need to increase the supply capacity, optimize the energy mix, ensure coal mining safety, reduce environmental pollution, increase resource utilization efficiency and build a new coal industry system, so as to guarantee the development of the national economy. China will step up its efforts in prospecting coal resources, render support to large coal mining bases in conducting resource surveys and detailed geological surveys, set standards for commercial prospecting, improve the level of guarantee for coal resources, and steadily push forward the building of large coal mining bases. By merger and reorganization of enterprises, the country will bring into being some large coal mining conglomerates each with a total annual production capability of 100 million tons. It will continue to push forward the development and integration of coal resources by renovating medium-sized and small coal mines and closing down, in accordance with the law, small ones not conforming to industrial policies, with poor safety conditions, wasting resources and harming the environment, so as to further optimize the structure of the coal industry. It will promote the coordinated development of related industries, and encourage coal-electricity joint operation or coal-electricity-transport integrated management, so as to extend the coal industry chain. It will further mechanize coalmines and enhance overall mechanization in coal mining, promote the clean production and utilization of coal, encourage R&D and spreading of clean coal technologies, and quicken the research into and demonstration of substitute liquid fuels. China will actively develop a circular economy, step up efforts in environmental protection, promote the comprehensive utilization of resources, and accelerate the industrialized development of coal-bed gas. It will strengthen the building of the coal transport system and steadily increase the coal transport capacity. It will establish a responsibility system for safe production, beef up safety installations and put more money into gas prevention and control, so as to improve the level of safe production.

-Actively developing electric power. Electric power is a highly efficient and clean energy. It is also a basic requirement for the steady development of the national economy and society to establish an economical, highly efficient and stable power supply system. China will optimize the power supply structure based on structural adjustment. On the basis of taking into overall consideration such factors as resources, technology, environmental protection and the market, the Chinese Government will develop clean coal-fired electric power by setting up large coal-fired power bases and encouraging the building of power plants at pitheads, with emphasis on large, highly efficient, environment-friendly power generating sets. It will actively develop cogeneration of heat and power, and speed up elimination of small and backward thermal power units. On the condition that the ecological environment is protected and problems affecting local people are properly settled, energetic efforts will be made to develop hydropower. It will also actively develop nuclear power, and appropriately develop natural gas power generation. It will encourage power generation with renewable and new energy resources. It will strengthen the building of regional power grids and power transmission and distribution networks and expand the scope of power transmission from west to east China. Uniform planning and distribution of electric power will be adopted, and an emergency response system for power safety will be set up to enhance the safety and reliability of the power system. China will continue to strengthen power demand-side management (DSM), exert control over power use for the purpose of conserving energy and work hard to increase energy utilization efficiency.

-Expediting development of oil and gas. China will continue to implement the policy of "simultaneous development of oil and gas," steadily increase crude oil output and make efforts to increase the output of natural gas. The country will step up its efforts in prospecting for and exploiting oil and natural gas, with the focus on major oil and gas basins, including those of Bohai Bay, Songliao, Tarim and Ordos, and actively explore new areas, fields and strata on the land and major sea areas, so as to increase the amount of recoverable reserves. It will tap the potential of major oil-producing areas, improve renovation for stable yields, increase the recovery ratio and slow down the yield decreasing trend in old oilfields. On the condition of reasonable cost, it will actively develop coal-bed gas, oil shale and tar sand and other non-conventional energy resources. The country will expedite the construction of oil and gas pipeline networks and supporting facilities and gradually improve the national network of oil and gas pipelines.

-Vigorously developing renewable energy. China gives top priority to developing renewable energy. The exploration and utilization of renewable energy resources plays a significant role in increasing energy supply, improving the energy mix and helping environmental protection, and is also a strategic choice of China to solve the contradiction between energy supply and demand and achieve sustainable development. China has promulgated the Renewable Energy Law and priority policies for renewable energy electricity, entailing priority to be connected to grids, acquisition in full and preferential price, and public sharing of costs. It has earmarked special funds for renewable energy development to support resource survey, R&D of relevant technologies, building of pilot and demonstration projects, as well as exploration and utilization of renewable energy in rural China. It has released the Medium- and Long-Term Program for Renewable Energy Development, putting forward the goal of increasing renewable energy consumption to 10 percent of the total energy consumption by 2010 and 15 percent by 2020. China will further the comprehensive and cascade development of areas with hydropower resources, speed up the construction of large hydropower stations, develop medium-sized and small hydropower stations based on local conditions, and construct pumped-storage power stations under appropriate circumstances. It will spread the latest technologies for the utilization of solar energy, methane and other renewable energy sources, and increase their market shares. It will also actively popularize technologies utilizing wind, biomass and solar energy for power generation, and build several million-kw wind power bases to achieve industrialization by means of scale power generation. It will actively implement policies supporting renewable energy development, foster a renewable energy market featuring sustained and stable development, and gradually establish and improve an industrial system and a market and service system of renewable energy, so as to promote renewable energy technological advance and industrial development.

-Improving energy development in the rural areas. China has a rural population of 750 million. Due to economic and technical limitations, people in most rural areas still use traditional biomass energy. It is an inevitable demand in the building of a new socialist countryside in all aspects to solve the energy problem for the rural areas. This is also a problem unique to China. The Chinese Government sticks to the principle of "development based on local conditions, supplementation between multiple energy resources, comprehensive utilization with focus on actual results," and works hard to improve energy development in the rural areas. The Chinese Government has improved the energy conditions for rural people's life and production, and solved the power problem for over 30 million rural people who had no access to electricity and in remote areas not connected to the grid, by carrying out the Lighting Project, "rural grid renovation," "electrification of hydropower-based rural areas" and "connecting villages with the grid" campaigns, and making full use of small hydropower stations, wind energy and solar energy for power generation. Basically, rural and urban residents are connected to the same grid and pay the same rate. China will further actively develop rural household methane and make better use of biomass and solar energy, so as to provide clean energy for the rural people. It will continue popularizing firewood- and energy-saving stoves and small energy facilities, such as small windpower and hydropower stations, in rural areas. It will increase the supply of high-quality fossil energy and increase the proportion of commercial energy consumption in rural areas. Continuous efforts will be made to strengthen the construction of the rural grids to expand their coverage. Moreover, China will actively build green-energy counties for demonstration, and accelerate the exploration and utilization of renewable energy resources in rural areas.

V. Accelerating the Progress of Energy Technologies

Science and technology is the primary productive force and the main motive force of energy development. China sets great store by the development of energy science and technology, and has narrowed its technological gap with the developed countries in the energy industry and effectively promoted the overall development of the energy industry. The Chinese Government promulgated the Outline of the National Plan for Medium- and Long-Term Scientific and Technological Development (2006-10) in 2005, which gives top priority to the development of energy technologies, and, in line with the principle of making independent innovations and leapfrogging development in key fields, shoring up the economy and keeping in step with leading trends, stresses accelerating progress of energy technologies and strives to provide technological support for the sustainable energy development.

Following the laws and traits of scientific and technological development, China actively develops and popularizes advanced and applicable technologies in the fields of energy saving, substitution, recycling and pollution control, and is creating a favorable policy environment for the progress of energy technologies. The Chinese Government strives to gradually establish a market-oriented system for technological innovation, in which enterprises play the leading role and which combines the efforts of enterprises, universities and research institutes. It vigorously promotes R&D and the application of advanced energy technologies, guides enterprises to expedite technological progress and enhance energy utilization efficiency through the market mechanism. It strengthens the training of talented people in energy science and technology, and improves policies, laws and regulations, and technical standards in this respect to create favorable conditions for the development of energy technologies.

-Popularizing energy-saving technologies. China gives priority to the development of energy-saving technologies, with focus on key technologies in the high energy-consumption sectors, to enhance the utilization efficiency of primary and end-use energy resources; implements the policy outline on energy-saving technologies and guides social investment into the application of energy-saving technologies; places emphasis on R&D of energy-saving technologies and equipment for industry, transport and construction, and the application of technologies connected with integrated renewable energy systems and energy-saving construction materials; strengthens energy measurement, control, supervision and management; and actively fosters an energy-saving technological service system.

-Spurring innovation in key technologies. China encourages the development of clean coal technology, reinforces R&D of advanced technologies, such as coal gasification, processing and conversion, popularizes advanced power generation technologies, including integrated gasification combined cycle (IGCC), supercritical and ultra-supercritical power generation, and large-scale circulating fluidized bed (CFB), and develops coal gasification-based poly-generation technology. China attaches particular importance to mastering the third-generation pressurized-water reactor (PWR) nuclear power generation and high temperature gas-cooled reactors (HTGR) for industrial experimental technologies. It actively develops technologies in connection with prospecting for and exploitation of petroleum and gas resources under complicated geographical conditions, and highly efficient exploitation of low-grade petroleum and gas resources; encourages the development of technology for substitutes of energy resources, gives priority to the development of technologies for large-scale utilization of renewable energy; and steadily improves the technology of power transmission at voltages of 800 kv DC and 1,000 kv AC and power grid safety technology.

-Enhancing equipment manufacturing level. The equipment manufacturing industry is the foundation of the development of energy technologies. China gives impetus to the technological progress of the equipment manufacturing industry through key state projects. The Chinese Government encourages the development of comprehensive excavation machinery in coal mining, large comprehensive mining, hoisting, transport and washing equipment for underground coal mining, and heavy-duty open-pit mining machinery. It supports the development of complete sets of large equipment for coal chemicals as well as R&D of coal liquefaction and gasification, and coal-to-olefin conversion equipment, the development of high-efficiency and low-pollution power generation equipment, high-efficiency coal-fired power generation units, hydropower and pumped-storage units, heavy-duty gas turbines, PWR nuclear power generation units with a capacity of 1 million kw, high-power wind-driven generators, and superhigh-power transmission and transformation machinery. It encourages the development of oil and natural gas prospecting and drilling equipment and support equipment for large offshore oil projects, crude oil carriers with a capacity of 300,000 dwt, liquefied natural gas carriers and high-power diesel engines.

-Strengthening frontier technology research. Frontier technology, as a new potential driving force for energy development, can blaze the way for the leapfrogging development of energy industry and technologies. China focuses on research into conversion from fossil, biomass and renewable energy resources to hydrogen, and high-efficiency hydrogen storage, transmission and distribution technology. It also conducts research into the technology for the manufacturing of basic and key components of fuel cells, integration of fuel cell stacks, fuel cell power generation and automotive fuel cell power systems, and strives to make breakthroughs in the technology for the end-use energy conversion, storage and combined cooling, heating and power projection of fossil energy-based micro-miniature gas turbine systems. Meanwhile, the country is speeding up research into the engineering and core technology of gas-cooled faster reactors (GFR), and technology for developing magnetic confinement fusion (MCF) and natural gas hydrate technology.

-Developing basic scientific research. Basic research is the source of independent innovation and it determines the strength and potential of energy development. China concentrates on research into the basic theories of the high-efficiency and low-pollution utilization and conversion of fossil energy, key principles of high-efficiency heat-work conversion, high-efficiency energy saving and storage, basic technology for large-scale utilization of renewable energy, and basic theories concerning technology for large-scale utilization of nuclear and hydrogen energy resources.

VI. Coordinating Energy and Environment Development

Climate change is a significant global issue of worldwide concern. It is both an environmental and development issue, and intrinsically a development issue. The large-scale exploitation and utilization of energy resources is one of the major causes of environmental pollution and climate change. Appropriate handling of the relationship between the exploitation and utilization of energy resources on the one hand, and environmental protection and climate change on the other, is an urgent issue facing all countries. China is a developing country in the primary stage of industrialization, and with low accumulative emissions. From 1950 to 2002, the aggregate amount of China's fossil fuel carbon dioxide emissions accounted for only 9.3 percent of the world's total in the same period. The amount of China's per-capita carbon dioxide emissions ranked 92nd in the world, and the elasticity coefficient of carbon dioxide emissions per-unit GDP was very small.

As a responsible developing country, China attaches great importance to environmental protection and prevention of global climate change. The Chinese Government has made environmental protection a fundamental state policy, signed the United Nations Framework Convention on Climate Change, established the National Coordination Committee for Climate Change, submitted to the UN the Initial National Communication on Climate Change of the People's Republic of China, worked out the Management Measures on the Implementation of Clean Development Mechanism Projects, formulated the National Climate Change Program, and adopted a series of proactive policies and measures regarding environmental protection and climate change. China aims to achieve the goal of basically curbing the trend of ecological deterioration, reducing total emissions of major pollutants by 10 percent, and gain visible results in the control of greenhouse gas emissions during its 11th Five-Year Plan period (2006-10). Meanwhile, the country is actively adjusting its economic and energy structures, comprehensively advancing energy saving, emphatically preventing and controlling the pressing problems of environmental pollution, and effectively controlling emissions of pollutants to facilitate coordinated development between energy and the environment.

(To be continued )