Making Great Efforts to Save Energy and Raise Energy Efficiency

The Chinese Government attaches great importance to energy conservation, and has made it a fundamental state policy. For a long time it has pursued a policy of putting equal emphasis on both development and energy conservation with priority being given to conservation. The Outline of the 11th Five-Year Plan for National Economic and Social Development (2006-10) considers it a major strategic task for China to build an energy-conserving and environmental-friendly society. It stipulates that the energy consumption per unit GDP in 2010 should be 20 percent lower than that in 2005, and that this goal is binding.

-Placing energy conservation and emission reduction in a more prominent position. The State Council has set up a leading group on energy conservation and emission reduction, and issued the Comprehensive Work Plan for Energy Conservation and Emission Reduction to guide work in this field.

-A responsibility system is in place, establishing goals for energy conservation and emission reduction. The State Council has issued the Plan and Method Regarding the Monitoring of Energy Conservation, Emission Reduction and Evaluation, stating clearly that leading cadres in all provinces (autonomous regions and municipalities directly under the Central Government) and key enterprises will be appraised by their performance in achieving the goals for energy conservation and reduction of emission of major pollutants. Those who fail in this task will be held responsible.

-Accelerating the construction of major energy conservation projects. In 2006, the state supported 111 key energy-conservation projects by using funds raised from issuing treasury bonds and investment within the central budget, resulting in an energy-conservation capacity of 10.1 million tons of standard coal. In 2007, the state supported 681 key energy-conservation projects by using funds raised from issuing treasury bonds, investment within the central budget and central treasury capital, resulting in an energy-conservation capacity of 25.5 million tons of standard coal. Technological transformation conducted by enterprises under the direction of local governments resulted in an energy-conservation capacity of 60 million tons of standard coal. It is expected that an energy-conservation capacity of 240 million tons of standard coal will be created after 10 major energy-conservation projects are implemented from 2006 to 2010. With subsidies from the government, 50 million energy-saving bulbs are now being distributed to households all over the country, and within the coming three years more than 150 million energy-saving bulbs will be distributed.

-Promoting energy conservation and emission reduction in key fields. An energy-conserving campaign has been launched among more than 1,000 enterprises to encourage them to conduct auditing on their energy use, formulate energy-saving plans, and make public their energy use situation. A campaign has also been launched in major energy-consumption enterprises to check their compliance with the energy efficiency indicators. The government is earnestly promoting "green" and environmental-friendly buildings that save energy and land. Newly constructed buildings must meet the compulsory energy-saving standards. Energy-saving renovations to existing buildings are carried out, and the task has been assigned to different regions to install measured heating equipment and complete energy-saving renovation to a total of 150 million square meters of floor space. Pilot work has been launched to set up a monitoring system on energy conservation in office buildings of state agencies and large public buildings in 24 provinces and cities. The government will continue to improve the fuel consumption restriction standard for motor vehicles, and enforce the standard strictly. State agencies at the central level have checked and remodeled their air-conditioning, lighting and boiler systems for energy-conservation purposes. They have also installed energy-conservation lighting in all their office buildings.

-Raising the efficiency of energy development and conversion. More high-efficiency, energy-conservation equipment is used in the power-generating and coal-producing sectors, and the government has quickened its pace to eliminate small thermo-power stations and coal mines. In 2007, electricity generating units of 6,000 kw or above saw their coal consumption drop from 448 grams of standard coal per kwh in 1980 to 370 grams. Energy and electricity consumed per production unit of raw coal in 2007 dropped by 5.9 percent and 5.1 percent, respectively, as compared with the previous year.

-Implementing economic policies conducive to energy conservation. The resources tax for some mineral products has been readjusted, and prices for refined oil and natural gas have also been readjusted in a timely fashion. Policies aimed at saving energy in power generating and distribution have been adopted. The prices for electricity generated by small thermo-power plants transmitted by the state power grid have been lowered, and electricity price differentials have been adopted more broadly. Regulations have been promulgated regarding capital management that supports enterprises in making energy-saving technological transformation, popularizing high-efficiency lighting products, installing monitored heating systems in buildings and making energy-conservation renovations. Policies have also been introduced to encourage the production and use of environmentally-sound motor vehicles with small displacement and to restrict the use of plastic shopping bags. A compulsory government energy-saving products procurement system has been put into place.

-Strengthening the construction of the legal system. The Energy Conservation Law has been amended. The General Office of the State Council has issued the Circular on Strictly Following the Temperature Control Standards for Air-Conditioners in Public Buildings. Since 2007, national compulsory standards have been promulgated to restrict energy consumption for the making of 22 products (including thermo-power and sodium hydroxide) that consume excessive energy. Supervision and spot checks are now conducted on 16 categories of products, including motors and energy-saving bulbs that are end-users of energy. Government departments in charge of energy conservation and supervision enforce the energy-conservation administrative regulations in accordance with the law.

Thanks to all these efforts, energy consumption per unit GDP in 2006 and 2007 across China was lowered by 1.79 percent and 3.66 percent, respectively. In 2007, key enterprises in the power-generating, iron and steel, building materials and chemicals industries which consume 10,000 tons of standard coal or more annually saw energy consumption of 33 of their 35 major products drop, with energy consumption rising for only two products. The energy thus saved was equivalent to 38.3 million tons of standard coal. The energy saved in 2006 and 2007 by these enterprises equaled 147 million tons of standard coal.

Developing Renewable Energy and Optimizing Energy Mix

The Law on Renewable Energy and related policies were enacted in 2005 to give priority to renewable energy when transmitted on the state power grid, to purchase renewable energy at full price, to give users of renewable energy price discounts and to share the utilization of renewable energy among the whole society. A dedicated fund was created for developing renewable energy to support the evaluation and investigation of renewable energy resources, related technological research and development, construction of pilot and demonstration projects, and the development and utilization of renewable energy in the countryside. By the end of 2007, the annual installed capacity of hydropower in China was 145 million kw, generating 482.9 billion kwh of electricity, ranking first in the world in both installed capacity and power so generated. An average of 26 million kw of installed capacity was added in 2006 and 2007, with an average increase of 12 percent in each year. The scale of wind power increased several-fold. Currently, with installed capacity of more than 6 million kw, China ranks fifth in the world. In 2006 and 2007, some 3.05 million kw of installed capacity was added, an average annual increase of 148 percent. The area of solar energy collectors has reached 110 million square meters, keeping China the world leader in this field for many years. The installed power generating capacity using biomass is 3 million kw, and the annual production capacity of ethanol as biofuel is more than 1.2 million tons. The installed capacity of nuclear power is 9.06 million kw, an increase of 30.5 percent over 2006. The proportion of coal in the consumption of primary energy dropped from 72.2 percent in 1980 to 69.4 percent in 2007. The proportion of hydropower, wind power and nuclear power combined was raised from 4 percent to 7.2 percent in the same period. The total amount of renewable energy available for use is approximately 220 million tons of standard coal (including large hydropower facilities).

According to the Mid- and Long-Term Plan for the Development of Renewable Energy and Mid- and Long-Term Plan for the Development of Nuclear Power, China will continue to promote the comprehensive cascading development of water-power-rich river valleys. It will quicken the pace of constructing large hydropower stations on the precondition that the environment is well protected and adequate relocation of the local residents is ensured. Medium and small hydropower stations will also be developed where local conditions permit. China is determined to develop rapidly more of its wind-power potential to the scale that industrialization can be achieved. It will raise its capacity for developing and manufacturing wind-power equipment and make every effort to construct several wind power farms of 1 million kw and wind-power bases of 10 million kw. China will energetically push forward the development and utilization of biomass energy, with emphasis on marsh gas, and solid and liquid biofuel, and on the use of biomass to generate electricity. China will actively take advantage of solar power to generate electricity and use it for heating while strengthening the research, development and utilization of new energy and alternative energy. It will make better use of coal-bed gas and gas in mines, and develop small and scattered sources of electricity with coal-bed gas as fuel. China enthusiastically develops nuclear power, is working hard to reform the nuclear power system and spur mechanism innovation in an attempt to establish a market-oriented nuclear power development mechanism. It will strengthen its capacity for developing and manufacturing nuclear power equipment, and raise its ability to absorb imported technology and make new innovations on this basis. It will strengthen the construction of nuclear power transmission and related technical services, as well as the training of qualified personnel. It will implement preferential policies on taxation and investment that will promote the development of nuclear power, improve nuclear power safety, and quicken the enactment of laws and regulations in this field. Finally, China will push forward the use of clean coal and develop efficient and clean power generating technology, such as large-scale combined cycle units and poly-generation, and promote technology for carbon dioxide sequestration.

Developing a Recycling Economy to Reduce Greenhouse Gas Emissions