IV. Building a Clean and Diversified Energy Supply System
Proceeding from its basic national conditions and current stage of development, China gives priority to eco-environmental conservation and pursues green development. It seeks growth while protecting the environment, and believes that a sound eco-environment better facilitates growth. It focuses on supply-side structural reform in the energy sector - giving priority to non-fossil energy, promoting the clean and efficient development and utilization of fossil energy, improving the energy storage, transportation and peak-shaving system, and developing coordinated, complementary, and diverse energy sources in different regions.
1. Prioritizing Non-Fossil Energy
The development and utilization of non-fossil energy is a major element of transitioning to a low-carbon and eco-friendly energy system. China gives priority to non-fossil energy, and strives to substitute low-carbon for high-carbon energy and renewable for fossil energy.
Facilitating the use of solar energy. In line with the principles of driving technological progress, reducing costs, expanding the market and improving the system, China is promoting the use of solar energy in an all-round way. It makes overall planning of geographical layout of solar PV generation bases and market accommodation, with emphasis on both centralized and decentralized power generation. It has implemented a "leader board" incentive to encourage solar PV power generation, and allowed projects to be allocated through market competition, so as to accelerate progress in relevant technologies and reduce costs. As a result, China's solar PV industry has become internationally competitive. The country is improving grid access and other services for decentralized solar PV power generation, and coordinating the development of solar PV power, agriculture, animal husbandry, and desertification control to form a diversified model of solar PV power generation. China is also industrializing solar thermal power generation through demonstration projects, and providing market support for related industrial chains. It has expanded the market for and utilization of solar thermal energy, and introduced centralized hot water projects in industry, commerce and public services to pilot solar heating.
Developing wind power. On the basis of balancing wind power development with power transmission and accommodation, China is taking steps to exploit wind power and building large-scale wind power bases. Based on the principles of overall planning and coordination, and efficient utilization and development of centralized and decentralized wind power both onshore and offshore, it is taking active measures to develop decentralized wind energy in the middle and eastern parts of the country, and offshore wind farms. It gives priority to wind power projects that deliver electricity at affordable prices, and encourages project allocation through market-oriented competition. China also promotes wind power production through large-scale development and utilization of wind power, which helps to boost industry innovation and international competitiveness, and improve the industrial service system.
Developing green hydropower. China considers eco-environmental conservation to be a priority and pursues green development. While protecting the eco-environment and relocating the residents, China develops hydropower in a rational and orderly way, giving equal importance to development and conservation, and emphasizing on both the construction and consequent management of the facilities. Focusing on major rivers in the southwest, China is building large hydropower bases and controlling the construction of small and medium-sized hydropower stations in the basin areas. China seeks the green development of small hydropower stations, and has increased investment in river ecology restoration. It is also improving policies for relocated residents to share the benefits from hydropower projects, thus giving a boost to local economic and social development and helping the relocated population get out of poverty. As in any resource development program, the goals are always set for a better economy, better environment, and better benefits for the people.
Developing safe and structured nuclear power. Nuclear security is the lifeline in developing nuclear power. China attaches equal importance to safety and the orderly development of nuclear power. It has strengthened whole-life management and supervision of nuclear power planning, site selection, design, construction, operation, and decommissioning, and adopted the most advanced technologies and strictest standards for the nuclear power industry. China is improving the multilevel system of regulations and standards on nuclear energy and safety and strengthening relevant emergency plans, legal system, institutions and mechanisms, in its effort to establish a national emergency system that effectively responds to nuclear accidents. China has strengthened nuclear security and nuclear material control, rigorously fulfilling its international obligations towards nuclear security and non-proliferation, and keeping a good nuclear security record. So far, the nuclear power units in operation are generally safe, and there have been no incidents or accidents of level 2 or above on the International Nuclear and Radiological Event Scale.
Developing biomass, geothermal and ocean energy in accordance with local conditions. China is adopting advanced technologies that meet environmental protection standards to generate power by means of urban solid waste incineration, and upgrading biomass power generation to cogeneration of heat and power. It is growing biogas into an industry and transforming methane use in rural areas. In industrializing liquid bio-fuel production by means of non-food biomass, it avoids using crops as raw materials and occupying arable land, strictly controls the expansion of fuel ethanol processing capacity, and focuses on improving the quality of biodiesel products. China is engaged in innovative geothermal power generation, providing urban central heating, and building demonstration zones for efficient production and utilization. It is also reinforcing R&D and pilot demonstrations on harnessing ocean power such as tidal and wave energy.
Increasing the overall utilization rate of renewable energy. China guarantees full acquisition of all renewable energy generated. It has implemented a clean energy accommodation action plan and is adopting various measures to promote the use of clean energy. It is improving the overall planning of the power sector, optimizing the power supply structure and layout, and allowing the market to function as a regulator, to form institutional mechanisms conducive to the use of renewable energy and make the power system more flexible and better at coordinating energy use.
China has put in place a mechanism for accommodating power generated from renewable energy, which determines on an annual basis the minimum proportion of renewable energy to be consumed in each province and equivalent administrative unit, and requires suppliers and users to work together to achieve this goal. The country uses the power grid as a platform for optimizing resource allocation. It facilitates optimal interaction and coordination of power source-grid-load-storage, and improves the appraisal and supervision of different sectors in accommodating power generated from renewable energy. Renewable energy use rate has increased significantly: In 2019 the national average consumption rate of wind power was 96 percent, that of solar PV power was 98 percent, and that of water energy in major river basins reached 96 percent.
2. Promoting Clean and Efficient Development and Utilization of Fossil Energy
China coordinates the development and utilization of fossil energy and eco-environmental protection in accordance with its resource endowment and the bearing capacity of natural resources and the environment. It promotes advanced production capacity while phasing out outdated capacity. It also promotes the clean and efficient utilization of coal and the exploration and development of oil and gas, and works to increase reserves and production, so as to be more self-sufficient in oil and gas.
Facilitating the safe, smart and green utilization of coal. China strives to build an intensive, safe, efficient and clean coal industry. It is furthering supply-side structural reform in the industry, improving the coal production capacity replacement policy, speeding up the decommissioning of outdated production facilities, and releasing high-quality capacity in an orderly manner. As a result, the configuration and production capacity of the coal mining sector have seen notable improvement, and large modern coalmines have become the mainstay. From 2016 to 2019, China cut more than 900 million tons of outdated coal production capacity per year on average. It has also increased input in production safety, and improved the mechanism to ensure workplace safety in the long run. Coalmines are becoming highly automated and intelligent by employing more machines and applying information technology, which also make them safer and more efficient. China promotes green mining at large coal bases and facilitates their green transformation by applying coal washing and processing technology, building a circular economy in mining areas and protecting the eco-environment. A number of green mines have been built with improved utilization of various resources in an all-round way. China has taken action to promote the clean and efficient utilization of coal, and increased the quota of coal consumption on power generation. Progress has also been made in coal-to-liquid (CTL) and coal-to-gas (CTG), the precision utilization of low-rank coals, and other industrialized demonstration projects of intensive coal processing.
Promoting the clean and efficient development of thermal power. China has been optimizing coal-fired power and upgrading technology to steadily reduce excess capacity. It has improved the early warning mechanism for risk control in coal-fired power planning and construction, and moved faster to phase out outdated capacity. By the end of 2019, China had phased out more than 100 million kW of outdated coal power capacity, and the ratio of coal-fired power in total power generation had dropped from 65.7 percent in 2012 to 52 percent in 2019. China has taken action to upgrade coal-fired power plants to reduce emissions, and adopted stricter standards for energy efficiency and environmental protection. The efficiency and pollutants control levels of coal-fired power units are on par with world advanced levels. China has also begun to develop natural gas power where appropriate. It encourages adding peak-shaving natural gas power stations to power load centers to improve power security.
Increasing the production of natural gas. In order to increase domestic natural gas supply, China has strengthened basic geological surveying and resource evaluation, and stepped up scientific and technological innovation and industrial support for conventional natural gas production. It is also making breakthroughs in unconventional natural gas exploration and development, such as shale gas and coal-bed gas, and is working on large-scale shale gas exploitation. It is improving relevant policies for the exploitation and utilization of unconventional natural gas. Focusing on the Sichuan, Ordos and Tarim basins, it has built a number of natural gas production bases with an output of more than 10 billion cu m. Since 2017, natural gas output has been increasing by more than 10 billion cum per year.
Raising the level of oil exploration, development and processing. China has strengthened domestic oil exploration and development, furthering related institutional reforms and promoting scientific and technological R&D and the application of new technologies. It has intensified the exploration and development of low-grade resources, and increased crude oil reserves and production. It has developed advanced oil recovery technologies, increased the recovery ratio of crude oil, and ensured steady output at old oilfields in the east, including the Songliao and Bohai Bay basins. Focusing on the Xinjiang region and the Ordos Basin, it has increased the reserves and production of new oilfields in the west of the country. It has also strengthened offshore oil and gas exploration and development in the Bohai Sea, the East China Sea and the South China Sea, and are advancing deep-sea cooperation with other countries. The output of offshore oilfields was about 40 million tons in 2019. China is also transforming and upgrading its oil refining industry to produce better refined oil products and improved fuel quality, which will reduce exhaust gas pollution of vehicles.
3. Improving the Energy Storage, Transportation and Peak-Shaving System
China coordinates the transportation of various energy resources such as coal, electricity, oil, and gas. It has built interconnected transmission and distribution networks and established a stable and reliable energy storage, transportation and peak-shaving system, to enhance its emergency response.
Strengthening energy transmission and distribution networks. China has been building cross-provincial and cross-regional key energy transmission channels, to connect major energy producing and consumption regions, and promote the complementary and coordinated development between regions. It has improved the capacity of existing railway lines for transporting coal, and seen that more coal is transported by rail with higher efficiency. It has enhanced the connectivity between main natural gas pipelines and provincial pipelines, liquefied natural gas receiving terminals, and gas storages, and is building a unified national network. A natural gas transportation system that is flexible, safe and reliable has taken shape. China has steadily built trans-provincial and trans-regional power transmission channels, and expanded the scope of clean energy allocation in the northwest, north, northeast and southwest. It has improved the main framework of the regional power grid and strengthened internal grid building at the provincial level. It has also carried out flexible HVDC pilot projects, and is working on the Internet of Energy (IoE) and a multilevel power system that is safe, reliable, and of a reasonable size.
Improving energy reserves for emergency response. China has integrated state, corporate, strategic and commercial reserves to achieve higher reserves for oil, natural gas and coal. It has improved the national oil reserve system and accelerated the construction of oil reserve bases. It has set up a multilevel natural gas storage and peak-shaving system, with local governments, gas suppliers, pipeline transportation enterprises and urban gas services fulfilling their respective responsibilities. It has also put in place a coal reserve system with enterprises playing the main part out of their social responsibility and local governments playing a supporting role. China has improved the national emergency mechanism for large-scale power outages, made power supply more reliable, and enhanced its emergency response. It has established a guarantee system for energy transmission and distribution that matches its energy reserve capacity, a standardized system for oil procurement, storage, replacement and use, and a supervisory mechanism for implementation.
Enhancing the energy peak-shaving system. China attaches equal importance to the supply side and the demand side. It strives to increase the peak-shaving capacity with sound market mechanism and strong technological support, so as to use the energy system in an efficient and allround way. It has accelerated the construction of pumped-storage power stations, built natural gas peak-shaving power stations as appropriate, and implemented power flexibility transformation projects in existing coal-fired CHP cogeneration units and coal-fired power generating units, so as to improve the peak-shaving performance of the power system, and promote clean energy accommodation. It is optimizing energy storage, power generation from new energy sources and the operation of the power system, and carrying out electrochemical energy storage and other peak-shaving pilot projects. It has promoted the construction of facilities for natural gas storage and peak shaving, improved the market-oriented mechanism of auxiliary services, and enhanced the peak-shaving capacity of natural gas. China has also improved its policies on electricity and gas prices to guide power and natural gas users to participate in peak shaving and peak shifting, so as to enhance the response on the demand side. It has improved the system for interrupting or adjusting electricity and natural gas load to tap the demand-side potential.
4. Supporting Energy Development in Rural and Poor Areas
China has implemented the strategy of rural revitalization to improve energy security in rural areas, so that the residents can have a better sense of gain, happiness and security.
Improving rural energy infrastructure. Making electricity accessible to all is a basic condition for building a moderately prosperous society in all respects. China implemented a three-year action plan to ensure power access for people without electricity, and had achieved this goal by the end of 2015. China attaches great importance to the renovation and upgrading of the rural power grid and makes great efforts to strengthen the weak links in the process. It has carried out targeted programs for renovating and upgrading power grid in small towns and central villages2, connecting motor-pumped wells in rural plain areas to the grid, and supplying poor villages with electricity for industrial and commercial use. Since 2018, it has been focusing on upgrading the power grid in severely impoverished areas and border villages. China has built natural gas branch pipelines and infrastructure to expand the coverage of the pipeline network. To improve energy infrastructure in rural areas, it has built supply outlets for liquefied natural gas, compressed natural gas, and liquefied petroleum gas in areas not covered by natural gas pipelines, and developed renewable energy sources adapted to local conditions.
Carrying out targeted poverty alleviation through energy projects. Energy is a driving force for economic development, and also an important impetus for poverty alleviation. China makes sound plans for the exploitation of energy resources in poor areas, introducing major energy projects in these areas to improve their capability to sustain themselves, thus adding new momentum to the local economy. It has given priority to energy development projects in old revolutionary bases, ethnic minority areas, border areas and poor areas, and built power transmission bases for sending surplus clean electricity to other parts of China, contributing significantly to local economic growth. In developing hydropower, China has followed a sustainable development path by ensuring smooth relocation and resettlement of residents, and by making sure those involved have the means to better themselves, so that the poor share more of the benefits of resource development. China has also increased financial input and policy support for clean energy such as biomass, wind power, solar power, and small hydropower stations in poverty-stricken areas. It has adopted various models integrating solar PV power and agriculture to reduce poverty, and built thousands of "sunshine banks" in poor rural areas.
Using clean energy for heating in rural areas in north China. Winter heating is of great importance in northern China. To ensure that the residents stay warm in winter while reducing air pollution, China has launched clean heating programs in rural areas in accordance with local conditions. In this new scheme enterprises assume the main responsibility and governments provide support to ensure affordable heating for the people. China has been steadily replacing coal with electricity and natural gas for centralized heating, and supported the application of clean biomass fuel, geothermal energy and solar energy in heating, as well as the use of heat pumps. At the end of 2019, the rate of clean-energy heating in the rural areas of north China was about 31 percent, up 21.6 percentage points from 2016. By 2019 about 23 million households in rural areas in northern China had replaced bulk coal with clean energy, including 18 million households in the Beijing-Tianjin-Hebei region, its surrounding areas and the Fenhe-Weihe River Plain.
2The central village is a rural community composed of a number of administrative villages with a certain population size and relatively complete public facilities. – Tr.
