(2) Strengthen institutional innovation and mechanism construction

-Accelerate China's institutional reform in energy sector. The government will push the progress on reform of energy management institution, further optimize energy mix by market mechanism and government promotion, actively and carefully promote energy price reform and gradually formulate pricing mechanism that can reflect resource scarcity, market demand and supply and cost for pollution control, establish pricing system that helps to realize energy mix adjustment and sustainable development; deepen institutional reform of foreign trade in controlling export of energy-intensive, pollution-intensive and resource-intensive products, so as to formulate an import and export structure favorable to promote a cleaner and optimal energy mix.

-Further promote mechanism construction for renewable energy development. Based on the principle of integrating government guidance, policy support and market force, stable mechanism for investment will be established through government investment, government concession and other measures. A sustainable and stably expanding market for renewable energy will be fostered, market environment for renewable energy will be improved and obligation of national electricity grids and petroleum sales enterprises under the renewable energy law to purchase renewable energy products will be implemented.

(3) Intensify relevant policies and measures in energy industry

-Properly develop hydropower on the precondition of protecting the ecosystem. Hydropower development should be regarded as an important countermeasure to promote a cleaner and less carbon intensive energy mix in China. On the precondition of environmental protection and proper migrants relocation, the government will sufficiently develop and utilize the abundant hydropower resources, expedite the development of hydropower, with an emphasis on the development in western regions and the development of small-scale hydropower. Through the countermeasures mentioned above, it is expected that the GHG emissions can be reduced by about 500 million tons of CO2 by 2010.

-Actively promote the development of nuclear power. Nuclear power should be regarded as an important component of national energy strategy, hence the proportion of nuclear power in China's national primary energy supply will increase gradually, and construction of nuclear power stations in the coastal regions with faster economic development and heavy electricity load should be expedited. China will unify technology approach and adopt advanced technology to realize independent and domestic construction of large-scale nuclear power stations and improve the overall capacity of nuclear power industry by the principle of self-dependence, international cooperation, technology transfer and promoting independence. Through the countermeasures mentioned above, it is expected that the GHG emissions can be reduced by about 50 million tons of CO2 by 2010.

-Expedite technology advancement in thermal power generation. China will optimize the mix of thermal power generation through phasing out small-scale backward units, properly develop small-scale distributed natural gas or coal bed methane electric power generation. The government will develop 600MW or above supercritical (ultra-supercritical) units and large combined-cycle units and other high efficient and clean power generation technologies; develop heat and power cogeneration, cogeneration of heat, power and cool, and combined heat-electricity-coal gas multiple supply; strengthen power grid construction through adopting advanced power transmission, transformation and distribution technologies, and decreasing losses of power transmission, transformation and distribution. Through the countermeasures mentioned above, it is expected that the GHG emissions can be reduced by about 110 million tons of CO2 by 2010.

-Vigorously develop coal-bed methane (CBM) and coal-mine methane (CMM) industry. Coal-bed methane exploration, development and utilization should be adopted as important instruments to expedite the structural optimization of coal industry, reduce accidents of coal production, improve rates of resources utilization and prevent environmental pollution. The government will minimize energy wastes and methane emissions in coal mining processes. Major incentive policies include: Surface extraction and exploring projects are exempted or partly exempted from utilization fees for prospecting and mining rights; preferential tax policies are adopted for coal-bed methane exploration and utilization projects and other comprehensive CBM and CMM utilization projects; preferential policies as defined in Renewable Energy Law of the People's Republic of China are applied to CBM and CMM power generation; CBM and CMM price for industrial and residential use should not be lower than the price of natural gas with the same calorific value; and the cooperation of CDM (clean development mechanism) projects are encouraged. Through the abovementioned countermeasures, it is expected that the GHG emissions can be reduced by about 200 million tons of CO2 equivalent by 2010.

-Promote the development of bio-energy. China will vigorously promote biomass energy development and utilization by attaching significant importance to bio-energy based power generation, marsh gas, biomass briquette and biomass liquid fuel. The government will construct or reconstruct straw-fired power plants and small to medium scale boilers in major crop production areas where biomass energy resources are abundant; construct garbage-burning power plants in the areas with relatively more developed economy but scarce land resources; and construct marsh gas projects and appropriately install power generation facilities at large-scale livestock or bird farms and sewage treatment plants for industrial wastewater and urban residential wastewater. China will vigorously promote marsh gas and gasification technologies for agricultural and forestry wastes, aiming at increasing the percentage of gas in rural residential energy consumption and using biomass gasification technology as an important instrument to abate environmental problems caused by rural residential and industrial wastes. The government will make efforts to develop biomass solid briquette and liquid fuels, and put forward economic policies and preferential measures in favor of bio-ethanol and other biomass fuels to promote biomass energy development and utilization to a considerable level. Through the above-mentioned countermeasures, it is expected that the GHG emissions can be reduced by about 30 million tons of CO2 equivalent by 2010.

-Actively support the development and utilization of wind, solar, geothermal and tidal energy. Through the development and construction of large-scale wind power farms, China will promote technology improvement and industry development for wind power, and realize domestic manufacturing of wind power equipments to reduce costs and improve the market competitiveness of wind power as early as possible; actively develop solar power and solar heating, including popularizing family-use photovoltaic power system or small-scale photovoltaic power plants in remote areas; disseminate integrated solar energy building, solar energy based hot water supply, space heating and cooling pilot projects in urban areas and popularize household solar water heater, solar greenhouse and solar stove in rural areas; actively promote the development and utilization of geothermal energy and tidal energy through popularizing geothermal space heating, hot water supply and geothermal heat pump technologies that meet the requirements of environmental and water resource protection. The government will develop tidal power generation technology in Zhejiang, Fujian, Guangdong and other provinces while conducting research on power generation based on wave energy and other oceanic energy. Through the above-mentioned countermeasures, it is expected that the GHG emissions can be reduced by about 60 million tons of CO2 by 2010.

(4) Strengthen the development and dissemination of advanced and suitable technologies

China will vigorously improve technology self-innovation capacity for the development and utilization of conventional energy, new energy and renewable energy; promote the sustainable development of energy industries and improve the capacity to address climate change.

-Technologies for the clean and efficient development and utilization of coal. China will emphasize the research and development of highly-efficient coal mining technologies and supporting equipments, efficient power generation technologies and equipments such as heavy-duty gas turbines, integrated gasification combined cycle (IGCC), high-pressure, high-temperature ultra supercritical unit, and large-scale supercritical circulation fluid bed boilers; vigorously develop coal liquefaction, gasification and coal-chemistry and other technologies for coal conversion, coal gasification based multi-generation systems technology and carbon dioxide capture, utilization and storage technologies.

-Exploration, exploitation and utilization technologies of oil and gas resources. The government will focus on the technology development for oil and gas exploration in intricacy fault block and lithology stratum, and highly-efficient technology for the development of low-grade oil and gas resources; improve oil recovery ratio technology and deep oil and gas exploration and development technologies; prioritize the research and development of deep-sea oil gas pool exploration technology and heavy oil reservoirs to enhance integrated recovery ratio technology.

-Nuclear power generation technology. China will research and master fast reactor design and its core technology, including nuclear fuel and structural material related technology; make breakthrough in natrium circulation and other key technologies; actively participate in the construction of and research on international thermonuclear fusion experiment reactor.

-Renewable energy technology. The government will prioritize the development of low-cost and scale exploitation and utilization technologies, including the development of large-scale wind-power generation equipments, high performance and low-cost photovoltaic battery technology, solar thermal power generation, integrated solar energy building technology, and biomass and geothermal energy development and utilization technologies.

-Power transmission and distribution and grid safety technologies. China will prioritize the research and development of large-capacity long-distance DC transmission technology and super high voltage transmission technology and equipment, grid transmission and distribution technology for intermittent power sources, quality monitoring and quality control technology for electric power, large-scale interconnected grid security technology, key technologies in West-to-East Power Transmission Project, grid management automation technology, information technology and efficient management of supply and distribution system.

4.1.2 Energy efficiency improvement and energy conservation

(1) Accelerate the formulation and implementation of related laws and regulations

-Improve exiting energy-saving regulations and standards. China will amend and improve the Energy Conservation Law of the People's Republic of China, establish strict energy-saving management system, further clarify each entity's responsibility, intensify policy incentives, identify the legal executants and intensify efforts to discipline; constitute necessary supporting regulations such as the Management Measures on Saving Electricity, the Management Measures on Saving Petroleum and the Management Measures on Architectural Energy-Saving; formulate and improve energy efficiency standards for main energy-consuming industrial equipments, domestic appliances, lighting appliances and motor vehicles, amend and perfect energy-saving design criteria of main energy-consuming industries, energy-saving standards for buildings, and accelerate the formulation of temperature control standards on building refrigeration and space heating.

-Strengthen supervision and monitoring on energy conservation. The government will improve the mechanism of compelling phasing out of energy intensive and backward processes, technologies and equipments; phase out backward and energy-intensive productions and equipments according to the law; improve the market access mechanism of key energy-consuming products and new buildings, prohibit producing, importing and selling products that fail to meet the lowest energy efficiency standards, and forbid selling and using buildings that fail to meet the energy-saving building design standards; strengthen the supervision and monitoring of energy utilization status of key energy consumer entities; strengthen supervision of energy utilization status of energy-intensive industries, government office buildings and large-scale public buildings; strengthen the inspection of implementation of energy efficiency standards for products, architectural energy-saving design standards and industry design criteria.

(2) Strengthen institutional innovation and mechanism construction

-Establish target-oriented responsibility and assessment systems for energy conservation. China will implement energy consumption per unit of GDP communiqué system, improve information release system on energy conservation, timely publicize all kinds of energy consumption information by utilizing modern information dissemination technology, and guide local government and enterprises to strengthen energy conservation.

-Carry out comprehensive resource planning and electric power demand side management, integrate amount of energy saving as a kind of resource into the overall planning so as to guide reasonable resource allocation, and adopt effective measures to enhance end-use efficiency of electricity utilization, optimize electricity use pattern and save electricity.

-Actively promote the authentication of energy-saving products and implement energy-efficient labeling management system and apply market mechanism to encourage and guide consumers to purchase energy-saving products.

-Put forward contract-based energy management to overcome market barriers in promoting new energy-saving technologies and to promote industrialization of energy-saving practices, aiming at providing all-around services such as diagnosis, design, financing, renovation, operation and management of enterprises to implement energy-saving renovation.

-Establish energy-saving investment assurance mechanism to promote the development of energy-saving technological service system.

-Popularize energy-saving voluntary agreements to motivate enthusiasm of enterprises and industrial societies to save energy.

(3) Strengthen relevant policies and measures

-Vigorously adjust industrial structure and its regional distribution. China will promote the development of service industry and increase its proportion in national economy; integrate energy conservation, environmental protection and control of greenhouse gas emissions into regional economic development; determine the functions of different regions and promote diversified regional development pattern according to the carrying capacity and development potential of the environment and resources and in the light of the requirements for main function planning,.

-Strictly implement the Industrial Restructuring Guiding Catalog. The government will control the scale of energy-intensive and pollution-intensive industries and reduce their proportion; encourage the development of new and hi-tech industries; give priority to the development of information industry that plays a leading role in the economic growth with lower energy consumption; develop and implement development plans and industrial policies for steel, non-ferrous metals, cement and other energy-intensive industries; raise industrial access thresholds; develop and improve policies governing the export of domestically scarce resources and energy-intensive products.

-Formulate preferential policies for energy-saving products. The government will focus on end-use equipments, including highly efficient electric motors, fans, pumps, transformers, appliances, lighting products and energy-saving building products; implement incentive policies for the production and utilization of energy-saving products included in the Catalog; list energy-saving products in the government procurement inventory; support key energy-saving projects and key energy-saving technology development and demonstration projects with investment and financial assistance or loan interest subsidies; study and formulate economic incentive policies for the development of energy-saving and land-saving buildings and green buildings.

-Study financial and tax policies to encourage the development of energy-saving and environmentally-friendly vehicles and to speed up the elimination of fuel-inefficient vehicles. The government will implement fuel tax reform policy in an appropriate time; formulate industrial policies to encourage the development of energy-saving and environmentally-friendly vehicles with low emissions; develop consumer policy measures to encourage energy-saving and environmentally-friendly vehicles with small displacement, abolish various restrictions on energy-saving and environmentally-friendly vehicles with small displacement and guide the public to embrace the idea of conservation-oriented automobile purchase and maintenance; vigorously develop public transport system and improve the proportion of rail transport in urban areas; study policies of encouraging the production and consumption of hybrid vehicles and electric vehicles.

(4) Strengthen the development and dissemination of energy conservation technologies in key sectors

-Iron and steel industry: Coke ovens should be equipped with coke dry quenching facilities, and newly constructed blast furnace should be equipped with furnace top pressure differential power generating equipment (TRT); advanced technologies and equipments such as beneficiated material feeding, rich oxygen coal spurt, molten iron pretreatment, large-scale blast furnace, converter and super power electric arc furnace, external furnace refining, continuous casting, continuous rolling, controlled casting and controlled cooling should be applied.

-Nonferrous metal industry: Mines should be required to mainly use large, highly-efficient and energy-saving equipment. In copper smelting process, advanced oxygen-enriched flash and oxygen-enriched bath smelting processes should be adopted. In electrolytic aluminum smelting process, large pre-baking electrolytic cell should be adopted. In lead smelting process, new lead smelting process by oxygen bottom blowing and other technologies of direct lead smelting by oxygen should be adopted. In zinc smelting process, new wet process should be developed.

-Oil and petrochemical industry: Oil and natural gas exploitation should apply the systematic optimization technology for oil exploitation, energy saving supplementary technology for thick oil hot exploitation, optimized operation technology for water filling system, comprehensive energy saving technology for oil and gas enclosed collection and transmission, and recovery and reutilization technology for discharged natural gas. In the process of ethylene production, the raw material structure should be optimized and ethylene cracking furnace with advanced technology shall be retrofitted. Large-scale synthetic ammonia plants should deploy advanced energy-saving technical processes, new catalyst and highly-efficient energy-saving equipment, promote technology of recovering residual heat from flue gas of one-section furnace for gas-based synthetic ammonia, accelerate retrofit of replacing fuel oil with clean coal or natural gas for oil-based synthetic ammonia. Energy-saving equipment and variable pressure absorption recovery technology should be applied to medium- and small-scale synthetic ammonia. The coal water slurry or advanced pulverized coal gasification technology should be employed to replace traditional fixed bed coal gasification technology. In the production of caustic soda, graphite anode diaphragm process should be gradually eliminated, and the proportion of ion membrane method should be increased.

-Building material industry: In cement industry, new dry process kiln with precalcinator technology should be developed; energy efficient grinding equipment and power generating technology should be promoted by using waste heat recovered from cement kiln; the performance of existing large- and medium-sized rotary kiln, mills and drying machines should be improved for the purpose of energy conservation; mechanized vertical kiln, wet process kiln and long dry process kiln and other backward cement production technologies should be gradually phased out. In glass industry, advanced float process shall be developed; backward fourcault and colburn processes shall be eliminated; and technologies of overall heat insulation for furnace and kiln and enriched oxygen and full oxygen combustion shall be promoted. In architectural ceramics industry, backward kilns of down draft kiln should be discarded, and slab kiln, multi-hole kiln, and roller kiln technology should be promoted. In sanitary ceramics, fuel composition shall be changed and the clean gas fuel shall be used so as to apply sagger-free burning technology. Further promotion activities should include application of new wall materials and thermal insulation and high-quality, environmentally-friendly and efficient sound insulation material, waterproof material and sealing material; the proportion of high performance concrete application should be increased and the life span of buildings should be extended.