.
Read in Chinese
Speakers:
Mr. Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC)
Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA)
Mr. Zhang Zuqiang, deputy administrator of the China Meteorological Administration (CMA)
Chairperson:
Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
Jan. 13, 2023
Shou Xiaoli:
Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC); Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA); and Mr. Zhang Zuqiang, deputy administrator of the China Meteorological Administration (CMA), to brief you on ensuring energy supply and winter heating. They will also take your questions.
Now, I will give the floor to Mr. Lian Weiliang.
Lian Weiliang:
Ladies and gentlemen, friends from the media, good afternoon. I would like to thank our friends from the media and all the other sectors of society for your interest in and support for our work on ensuring energy supply. Today, Mr. Zhang Jianhua from the NEA, Mr. Zhang Zuqiang from the CMA, and I are here to brief you on ensuring energy supply and winter heating. Please first allow me to introduce the current situation.
Since last year, the global energy supply and demand situation has been grave and complicated, especially with supply shortages and drastic price fluctuations. As China's economy has been deeply integrated into the global economy, domestic energy supply was inevitably affected by changes in international energy supply and demand and price fluctuations. As a result, we faced mounting difficulties and pressure in ensuring domestic energy supply.
The Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core attaches great importance to ensuring energy supply. The Central Economic Work Conference stressed strengthening regulation of supply and transportation of coal, electricity, petroleum, and gas to ensure a warm and safe winter for the people. The State Council has made specific deployments many times, calling on efforts to guarantee a stable economic performance, stable energy supply, and stable prices of electricity, gas, and other energy products for residents so that they can have a warm winter. This has been referred to as the “three guarantees.” The NDRC, the NEA, and other departments under the inter-ministerial coordination mechanism for ensuring supply and transportation of coal, electricity, petroleum, and gas have thoroughly implemented the guiding principles of the 20th CPC National Congress and the requirements of the CPC Central Committee and the State Council, and achieved initial success in ensuring winter heating and energy supply. Overall, the supply of energy has been guaranteed, and prices are stable across the country.
First, significant progress has been achieved in increasing energy production and supply. With safety as the premise, we have worked to ensure stable production and sufficient supply of coal, keeping daily coal production above 12 million metric tons in the heating season. We have fully tapped the potential for increasing petroleum and gas production, raising natural gas production by more than 10 billion cubic meters throughout the year. We have continued to improve power supply capacity, increasing the installed capacity of various types of power generation by more than 200 million kilowatts.
Second, energy reserve capacity and the capacity of ensuring energy supply during peak periods have been significantly enhanced. We have continued to enhance the natural gas reserve capacity. China's gas reserve capacity have exceeded 32 billion cubic meters. We have stored as much gas as possible before the winter, with 20 billion cubic meters available at present. The coal reserve capacity has been greatly improved. Our government-deployable coal reserve stands at about 50 million metric tons, while coal storage in power plants remains at a high level of about 175 million metric tons.
Third, the supply and price stability of energy products for people's livelihood have been effectively guaranteed. We have prepared resources for energy supply in advance. We have signed medium and long-term contracts with all the suppliers of coal for power generation and heating, and with the suppliers of gas for people's livelihood. Contract performance and transportation capacity have continued to improve. We have maintained mid- and long-term contract prices of thermal coal within a reasonable range, strictly implemented government pricing for household use electricity, and ensured that households under the coverage of the pipeline network consume natural gas at gate-station prices. In this way, we have guaranteed the sufficient supply and price stability of products for people's livelihood.
Fourth, the energy demand for economic and social development has been met. During the current heating season, the average national daily dispatched power generation capacity is 23.62 billion kWh, and the maximum daily power generation capacity is 25.5 billion kWh. The overall power supply and demand of the whole society has been balanced. The average national daily gas consumption is 1.15 billion cubic meters, and the maximum daily gas consumption is 1.3 billion cubic meters. All these have provided a strong support for economic and social development.
Thanks to the joint efforts of all parties, we have effectively responded to previous cold waves during this winter and maintained a stable and orderly energy supply nationwide. This was due to the strong leadership of the CPC Central Committee, which have proactively planned the building of energy production, supply, storage, and marketing systems in recent years to continuously improve China's energy supply capacity. We have also benefited from the strengths of the country's system , which creates synergy between an efficient market and a well-functioning government, and enable resolute actions to ensure energy supply for people's livelihood. Lastly, this success can also be attributed to our efforts based on China's realities to accelerate green and low-carbon energy transition, while making full use of coal and coal-fired power to avoid energy supply shortages. There are still more than two months until the end of the heating season, and more cold waves will arrive during the Spring Festival. Ensuring energy supply will continue to be a weighty task, and we must persevere in our efforts to deliver a solid performance in all areas of work.
First, we will continue to make efforts to increase energy production and supply. We will guide local governments and enterprises to well organize coal production during the Spring Festival holiday to ensure a stable supply. We will enhance electricity generation and supply capacity and keep domestic oil and gas fields operating safely at full capacity.
Second, we will strive to improve our capability to guarantee energy supply during peak periods. We will improve the comprehensive emergency distribution mechanism, featuring a complementary combination of coal, natural gas, and electricity. We will increase the output of thermal power generating units, improve hydropower distribution, and promote nuclear power, wind power, and photovoltaic power generation. Emphasis will be laid on response planning for power generation during peak periods and guaranteeing gas and coal resources used for power generation during peak periods.
Third, we will ensure energy supply in key regions. We will closely monitor heating companies' stockpiles in key regions, ratchet up railway transportation capacities, and carry out cross-provincial power distribution in a timely manner so as to ensure a safe and stable energy supply during key periods, including the Spring Festival.
Fourth, we will better organize resource imports. We will strive to stabilize the supply of imported natural gas and coordinate the management of underground gas storage facilities and LNG storage tanks to make sure that the gas supply for people's livelihoods will not be affected by fluctuating imports. Furthermore, we will secure coal imports to effectively supplement domestic supplies.
Fifth, we will ensure people's basic energy needs are met. We will improve the electricity capacity management plan, enhance the emergency plan that prioritizes residential use of natural gas, and guide local governments to take joint actions with enterprises to activate the above-mentioned plans in an orderly manner. We will strengthen the monitoring of individual cases concerning heating and energy supply and quickly coordinate and handle problems to guarantee sufficient electricity and gas in order to meet people's living needs.
That's all for my introduction. Next, we would like to answer your questions. Thank you.
_ueditor_page_break_tag_
Shou Xiaoli:
Thank you for your introduction, Mr. Lian. Next, we'll move on to the question and answer session. Please identify the media outlet you represent before asking a question.
CCTV:
The world is facing tight energy supplies amid the current complex and grave international energy situation. Is a safe, stable, and steady energy supply guaranteed in China? Meanwhile, a new round of cold waves is about to hit the country as the Spring Festival approaches. What measures will be taken to guarantee a warm winter for the Chinese people? Thank you.
Lian Weiliang:
Thank you for your questions. Energy supply is of great concern to all of us. Since last year, facing a tight global energy supply and soaring prices, China has experienced increasing pressure to maintain its energy supply. Under the strong leadership of the CPC Central Committee and the State Council, China rolled out a series of effective response measures in an orderly manner. Clear progress has been made in stabilizing energy supplies and prices. As I introduced before, China's safe, stable, and steady energy supply is guaranteed, which can be demonstrated in five aspects: space for increasing production and supply, long-term agreements on resource imports, reserves of key energies, policies to stabilize prices, and mechanisms to ensure supplies in an emergency.
First, there is space for China to increase its energy production and supply. Coal is our basic energy source. In recent years, our advanced coal production capacity has remarkably increased through measures of constructing large units, restricting small ones, increasing quality units, and cutting backward ones. Our power supply capacity has also been steadily enhanced, with the country's installed power generation capacity reaching 2.6 billion kW. Increases have been seen in oil and gas reserves and production. The production capacity of crude oil has exceeded 200 million metric tons annually, and that of natural gas is more than 220 billion cubic meters.
Second, we have signed long-term agreements on resource imports. People are concerned as to whether China's energy supplies, especially in crude oil and natural gas, which partly depend on imports, will be affected by fluctuations in the international market. I would like to take this opportunity to specify that spot goods are subject to being affected but that long-term agreements are relatively stable. We have followed international norms and market rules and secured imported resources through long-term agreements. For example, most of China's imported natural gas is secured through long-term agreements, which can effectively control and fend off risks of supply shortages and drastic price fluctuations.
Third, we have sufficient key energy reserves. We have substantially increased investment in reserve capacity building over the years. China's natural gas reserve capacity has exceeded 32 billion cubic meters. Natural gas has been stored as much as possible before the heating season. At present, halfway through the heating season, there are still 20 billion cubic meters of gas storage available. Moreover, there are about 50 million metric tons of coal that can be distributed by the government. As for coal stockpiles at power plants, the number remains at 175 million metric tons, fueling 22 days of heating, and can guarantee additional power generation during peak periods.
Fourth, we have launched policies to stabilize prices. Stable energy prices are crucial to people's well-being and stable economic performance. The pricing mechanism of coal has been further improved, enabling thermal coal prices to remain within the appropriate range. Steady progress has been made in reforms, making the pricing of on-grid electricity from coal-fired power plants increasingly market-based. The transmission mechanism of coal and electricity prices has been gradually improved. Government prices are strictly enforced in the arenas of residential electricity and gas so as to keep prices stable.
Fifth, we have set up a mechanism to ensure emergency supply. We have coordinated and let different types of energy, such as coal, natural gas, electricity, and petroleum products supplement each other so as to ensure their supply. The capability of ensuring energy supplies during peak usage has been steadily improved. The contingency plans for demand-side load management have been further improved. We will not limit the use of electricity or gas except in extreme scenarios. During extreme conditions, we will only limit the use of electricity and gas and not completely cut their supply in order to meet the basic demands for civilian energy use.
You just mentioned forthcoming cold fronts and the holiday energy supply. A cold front would increase heating energy demands. And if it brings rain, snow, and freezing weather, the production and transportation of coal will be affected as well as the power transmission. According to previous experience, general energy demands around Spring Festival are relatively lower, so supply can be guaranteed and the heating demands prompted by lower temperatures will be met. Even under extreme circumstances, when encountering unexpected civilian energy demands, we can act according to contingency plans and limit other energy usage to ensure civilian use is unaffected. Our energy supply is secure, and people will be able to enjoy sufficient heating in winter and have a happy Chinese New Year.
We should take the new cold fronts seriously, maintain bottom-line thinking, and take active measures to respond to issues. The focus should be on ensuring production, transportation, peak-time operations, and quick responses to individual cases.
First, to ensure production, we should guide energy enterprises to make contingency plans in the event of interruptions or a drop in production that may be caused by rain and snow. This is with the aim of maintaining production safely while making sure production does not drop or does not drop significantly. Second, to ensure transportation, we should guide power and heating plants and ports in the north to do a better job in unloading frozen coal and smooth the arteries and key links of coal transportation. Third, to ensure peak-time operations, we should enhance coordination, increase supply at peak times, and make sure additional civilian energy demands in extreme, low temperatures can be met. Fourth, to ensure quick response to individual cases, we should improve monitoring and pre-warning systems so as to identify potential risks before they grow into serious problems. All such issues should be tackled through coordination and in a timely manner. Thank you.
_ueditor_page_break_tag_
Cover News:
As of last year, global energy prices have continued to remain high and unstable, especially in Europe, where prices of electricity and gas surged dramatically. Given that the energy supply of our country highly depends on imports, how will we maintain the basic stability of energy prices? Thank you.
Lian Weiliang:
Thanks for your question. The stability of energy prices is relevant to people's livelihoods as well as the stable performance of the economy, and thus a public concern. We just said that the global energy demand and supply were complicated and not optimistic last year, with prices picking up sharply. Data shows that from January to November last year, energy prices, as part of the Consumer Price Index (CPI), went up 27% and 38% year on year in the United States and Eurozone, respectively, while natural gas prices increased 26.6% and 56.5% in the two regions and electricity prices 12.9% and 36.3%. In sharp contrast, China, also facing shockwaves from the global market and the test of extreme weather conditions, kept energy prices generally stable and within a reasonable range. This demonstrates the advantages of our system and the assorted measures for ensuring supply and stable prices. From January to November last year, the price of water, power, and fuel for civilian use, as part of CPI, only rose by approximately 3% in China, and the inflation in the price of gasoline and diesel was also lower than in Europe and the US. In particular, the prices of electricity and gas for civilian use were generally stable.
China produces, consumes, and imports large amounts of energy. It is not easy to maintain a stable energy supply and prices while facing a grim external environment, especially with regard to stabilizing prices. The achievements of the past year are really something. The key to achieving them was to seriously implement the decisions and plans of the CPC Central Committee and the State Council; continue to improve the system of energy production, supply, storage, and marketing; and see stabilizing energy supply and prices as a systematic project and promote it through various measures. These efforts can be summarized as follows.
First, we focused on increasing effective supply. The increase of supply is the prerequisite for stable prices. So, we unleashed our advanced production capacities and improved energy production capabilities. We supported enterprises to go into full-capacity production while ensuring safety so as to increase effective supply. We also reinforced transportation coordination and links between production, transportation, and demands.
Second, we focused on improving the pricing mechanism. A well-conceived pricing mechanism is the key to stabilizing prices. We innovated and improved a market-based pricing mechanism for coal and clarified the reasonable price range in the medium and long term. We deepened the reforms making the pricing of on-grid electricity from coal-fired power plants increasingly market-based and adjusted the price range of on-grid electricity from coal-fired power plants with rational means. We also insisted on ensuring people's livelihoods. Government pricing was strictly followed when it came to civilian electric power. Within the coverage of pipeline gas, civilian gas prices were fixed by combining ex-factory prices and pipeline transport prices.
Third, we focused on making good use of medium- and long-term contracts. Signing medium- and long-term contracts is an important way to mitigate price fluctuations. We have encouraged domestic enterprises to sign long-term import agreements early and lock in import resources in advance. We have comprehensively improved the contract signing and implementation rate of long-term agreements. It can be said that medium- and long-term energy contracts have become the ballast to ensure supply and price stability.
Fourth, we have focused on the key role of energy companies in ensuring energy supply. Various energy companies have overcome difficulties and worked hard to increase production and supply. The government has tried its best to help energy companies tackle their difficulties, control costs through medium- and long-term contracts, rationally ease costs through the implementation of price policies, and increase fiscal, tax, and financial support to effectively alleviate the temporary difficulties in operation for some companies. This has created good conditions for ensuring energy supply and price stability.
Thank you.
_ueditor_page_break_tag_
Xinhua News Agency:
The new round of rainy and snowy weather this week will bring about a sharp drop in temperature. What is the overall situation of the current energy production and supply? Are we prepared for extreme weather? Thank you.
Zhang Jianhua:
Thank you for your questions. In accordance with the decisions and plans of the Party Central Committee and the State Council on ensuring energy supply and price stability, we have been working with relevant sides to make preparations, and going all out to do a good job to ensure that the supply of coal, electricity, oil, and gas can meet peak demand during winter.
In 2022, we kept on optimizing and adjusting the structure of the coal industry, actively expanded advanced coal production capacity, and phased out outdated production facilities. The elasticity of coal supply was significantly enhanced, and the annual average daily output remained at a reasonable level. Efforts were made to ensure the safe and stable supply of electricity. Over the year, coal-fired power generators with a total capacity of more than 30 million kilowatts were put into operation, and construction of generators with a total capacity of over 50 million kilowatts was started . The level of coal storage in the country's major power plants remained high. We fully promoted the increase of oil and gas reserves and production, which exceeded the phased goal set in a seven-year action plan for the oil and gas industry. Total crude oil production recovered to 200 million metric tons , and natural gas production exceeded 220 billion cubic meters, marking annual increases of more than 10 billion cubic meters for six consecutive years.
Since the beginning of the winter season, the energy supply has withstood the test of multiple rounds of cold waves. Since December last year, coal production has remained stable, and the electricity coal inventory has remained at about 175 million metric tons. The national electricity load has stabilized at about 1.1 billion kilowatts, with a maximum of 1.159 billion kilowatts, and power generation increased by 5.8% year-on-year. Since the beginning of this winter, the number of days when the daily supply of natural gas exceeded 1.2 billion cubic meters reached 38, and underground gas storage facilities operated at full daily capacity of above 170 million cubic meters to meet gas demand peaks for 20 consecutive days . At present, the consumption of coal, electricity, and natural gas across the country has dropped from the peak level, and the supply and demand situation has been generally stable and manageable. The energy supply in the current heating season has been guaranteed in terms of resource volume and regional balance. Governments at all levels and various energy companies have established emergency response mechanisms to ensure supplies. In order to further eliminate people's worries and smooth the channels for problem reporting and resolution, you can call the 12398 energy supervision hotline if the problem of heating services and supply by a specific energy company has not been resolved, or if the solution is not satisfactory after reporting. Thank you.
_ueditor_page_break_tag_
N Videos at Southern Metropolis Daily:
Recently, media reported that residents in areas where coal has been replaced with natural gas struggled with limited purchases and supply shortage. How do you view this problem? What measures should be taken to ensure residents' gas supply? Thank you.
Lian Weiniang:
Thank you for your questions. The CPC Central Committee and the State Council have attached great importance to the problem and required us to establish a special mechanism to monitor and solve the problem in a timely manner. After monitoring the problem you mentioned, we immediately mandated local governments to take measures to solve it. This has exposed the failure of some local governments and enterprises in implementing measures to ensure energy supply and stabilize prices for people's livelihoods. We will draw lessons from it, further consolidate the responsibility of ensuring energy supply in localities, and faithfully implement measures to ensure energy supply and stabilize prices for people's livelihoods. Hereby, I would like to emphasize that natural gas resources in the heating season are sufficient. The medium- and long-term natural gas contracts we signed before the heating season have exceeded the expected demand of various regions. Since the heating season began, actual consumption has been lower than expected. Overall, the total amount of natural gas is guaranteed. Therefore, no local governments or enterprises should limit the purchase of gas for people's livelihoods. Once such problems are found, relevant parties will be held accountable. If restrictions are due to insufficient gas supply contracts, the central government will coordinate relevant departments to increase supply; if they are due to other reasons, local governments will intervene to help on a case-by-case basis.
To prevent such problems from happening again, it is crucial to make sure that two parties shoulder their responsibilities. That is local governments should take responsibility for helping, supervising, and guaranteeing the supply and energy supply enterprises should take primary responsibility.
First, local governments should shoulder the responsibility for helping, supervising, and guaranteeing the supply. Local governments should provide more targeted assistance to enterprises supplying energy for people's livelihoods and help them solve specific difficulties through financial subsidies and other means if necessary. The reason why fuel enterprises in some urban areas have limited purchases and stopped the supply of natural gas, is objectively because, with the accelerated marketization of natural gas, the gas sources of those enterprises have become more diversified. Under the circumstance of a sharp rise in international natural gas prices, the cost of market-oriented gas purchases of some enterprises has grown rapidly. It is difficult to effectively handle these purchases in a short time, so phased operational difficulties are emerging. These problems must be addressed with due attention to both short- and long-range targets. Both symptoms and root causes should be addressed through deepening reform. At present, we will help enterprises on a case-by-case basis. Local governments should strengthen supervision over energy supply enterprises to ensure that they will effectively fulfill their responsibility to ensure supply. In extreme cases, where there is a risk of disruption to supply, local governments should make plans as soon as possible to guarantee supplies unconditionally. Before entering the heating season, the country has clearly required local governments to dispatch working groups to help enterprises involved in energy supply for people's livelihood, especially those in difficulty. We will urge local governments to earnestly implement these measures.
Second, enterprises should actively take responsibility for supplying energy. Enterprises engaged in energy supply for people's livelihood should strengthen their sense of social responsibilities, adhere to their mission of ensuring energy supply for the public good, and remain steadfast in ensuring energy supply and stabilizing prices. When difficulties arise, they should report to the authority instead of limiting purchases or cutting off supply.
Thank you.
_ueditor_page_break_tag_
Red Star News:
A set of nuclear energy heating projects, such as the demonstration nuclear heating project at the Hongyanhe nuclear power plant in Liaoning province, have been put into operation. How do those projects work? Will there be a further expansion to nuclear heating in the future? At the same time, how will you ensure the safety of these nuclear heating projects? Thank you.
Zhang Jianhua:
Thank you for your questions. Developing nuclear power in an active and orderly manner is a strategic plan made at the 20th National Congress of the CPC, which is a significant part of our energy strategy. It also plays an important role in optimizing our energy structure, ensuring energy security, building a new type of energy system, and helping to achieve carbon peak and carbon neutralization. At present, a total of 53 nuclear power units are in operation, with an installed capacity of 55.57 million kilowatts, accounting for nearly 5% of the total electric energy production. A total of 28 units with an installed capacity of 32.72 million kilowatts are under construction. Over the years, China's nuclear power units have maintained a good record in safety, with no operation incidents jeopardizing the environment and public safety. In addition, the main operation indicators have remained at an advanced international level.
Nuclear heating means extracting part of steam as a heat source while generating electricity in a nuclear power plant, carrying out a multi-level heat exchange system through heat exchange stations, and ultimately delivering this energy to residents through a municipal heating network. This is a safe and reliable concentrated heating method in urban areas since there are multiple shields to isolate nuclear power units from residents, transferring energy without the contact of mediums. NEA has attached great importance to nuclear heating. In 2019, the first-phase nuclear heating project at Haiyang nuclear power plant in Shandong province was put into operation. The plant was the country's first nuclear heating project and played an exemplary role. The second-phase project, with a heating area of 5 million square meters, has achieved full nuclear heating coverage in all urban areas of Haiyang city. In addition, Qinshan in Zhejiang province and Hongyanhe in Liaoning province have also since achieved nuclear heating. So far, these projects are running very safely and stably, bringing heating to the people. These projects have not only generated ecological and social benefits by replacing coal with nuclear energy, but also reduced local heating prices and improved economic benefits and people's livelihoods by advancing heating quality. It has formed an all-win situation. These projects have all gone down with local people.
At present, the follow-up projects of nuclear heating in Haiyang, Shandong province, and Qinshan, Zhejiang province, are under construction. Large-scale development of nuclear heating is taking shape, making it possible to provide heating over a further distance and a wider area. The NEA actively supports the further development of nuclear heating. Going forward, we will organize the work to summarize the experience of nuclear heating projects in operation, further promote its application under the premise of ensuring safety, and strive to make greater contributions to clean heating in China's northern region. Thank you.
_ueditor_page_break_tag_
China News Service:
What have been the climatic features of China since the beginning of winter? What challenges will these conditions bring to China's energy supply? What is your outlook for the weather during the Spring Festival? Thank you.
Zhang Zuqiang:
Thank you for your questions. Since the beginning of winter, China's climate has shown two prominent features. First, from the perspective of temperature, China has been 0.3 degrees colder on average compared to usual, but the temperatures have also fluctuated greatly. In December, the average temperature in China was 1.2 degrees lower than that in the same period on average. From Jan. 1 to yesterday (Jan. 12), the average temperature in China was 2.3 degrees higher than that in the same period on average, so the fluctuations in temperature have been relatively large. The second feature is that overall precipitation has been relatively small. According to our statistics, the national precipitation since the beginning of winter has been nearly 40% less than that of the same period on average.
The main impact on our energy supply is that cold air activity will bring low temperatures, rain, and snowy weather, which will affect energy supply in terms of both supply and demand. On the one hand, low temperatures brought by cold air activity will lead to an increase in residents' demand for heating; on the other hand, rain and snow may create some adverse effects on power supply facilities and raw materials, such as the transportation of coal to generate electric power. Therefore, from the perspective of supply and demand, there exist some pressures. The country's energy management and meteorological departments will maintain close communication and cooperation, respond in a timely manner, and take timely measures to minimize the adverse effects of the weather.
As for the weather during the Spring Festival, sunny to cloudy weather are expected to prevail in the north, while cloudy and rainy weather will prevail in the south. Generally speaking, based on current weather conditions, there will be three cold air events that will affect China. The first is the one that is affecting us now, that is, the large-scale nationwide rain and snowy weather from Jan. 11-15, which is expected to end on Jan. 15 or 16. The second cold air snap will occur between Jan. 19-20, which will affect northern China. The third cold air event will affect most of China's central and eastern regions around Jan. 23. Meteorological authorities will strengthen monitoring and forecasting and release relevant early warning information in a timely manner, making every effort to provide meteorological support services for the people in order to ensure a safe and peaceful Spring Festival.
Thank you.
_ueditor_page_break_tag_
Science and Technology Daily:
On the way to its carbon emissions peak and neutrality goals, China has seen its new energy sector including wind and solar power generation gain momentum. It has become an important part of the country's multi-energy supply system. What positive role has new energy played in safeguarding energy supply during winter? Thank you.
Zhang Jianhua:
Thank you for your question. In the past decade of the new era, under the scientific guidance of the new energy security strategy of "Four Reforms and One Cooperation" (namely, reforms in energy supply and consumption, market building and innovation, and comprehensive international cooperation) proposed by General Secretary Xi Jinping, China's new energy sector has made remarkable achievements. In 2022, the newly installed capacity of wind and photovoltaic power reached more than 120 million kW, and their cumulative installed capacity are expected to exceed 700 million kW, driving the installed capacity of renewable energy to top 1.2 billion kW. The wind and photovoltaic power industry has become one of the most competitive ones in the country.
With an increasing installed capacity, wind and photovoltaic power have been playing a significant role in safeguarding energy supply. First, wind and photovoltaic power have taken a bigger share in China's total newly installed capacity. According to statistics, in 2022, the newly installed capacity of wind and photovoltaic power accounted for 78% of the country's total newly installed capacity. Second, the country's newly added power generation capacity has been largely attributed to wind and photovoltaic power. In 2022, China's newly added wind and photovoltaic power generation capacity accounted for more than 55% of its total newly added. Third, the role of wind and photovoltaic power generation in ensuring supply is becoming more and more evident. According to power dispatching data from power grid companies, the average output of wind and photovoltaic power generation in most regions of the country accounted for about 15% of the average power load in 2022, or even 40% at its maximum. During the peak season in the summer of 2022, the average output coefficient of photovoltaic power reached 0.5 during the noon peak period in Jiangsu, Shandong, Zhejiang, and other provinces which have a larger installed capacity of photovoltaic power, providing strong support for the country's safe energy supply. Thank you.
_ueditor_page_break_tag_
ThePaper.cn:
Recently, some heat suppliers said they were facing losses, and some even announced that they would stop supplying heat. It is known that heat suppliers are facing tremendous pressure in their business operations. Given this, what measures will be adopted? Thank you.
Lian Weiliang:
Thank you for your question. We confirmed that the situation was true after an investigation. However, this is an individual case, and the problem has been addressed. Despite being an individual case, it reminds us that we need to make more efforts to investigate and identify risks and hidden problems in energy enterprises, in a bid to identify problems early and correct them while they are nascent. We will deal with every single problem that impacts energy and heat supply so as to keep people warm in the winter.
Some heat suppliers said that they are grappling with greater operating pressure due to surging costs in fuels. It is a problem that many enterprises have experienced, but we need to adopt proper and targeted approaches and methods in line with specific cases. We will make greater efforts in five aspects to ensure energy supplies.
First, we will ensure the supply of resources. Regardless of their size or ownership, heat suppliers will all be involved in medium- and long-term coal contracts and strictly follow the contracts' pricing policies to control fuel costs appropriately.
Second, we will ensure the full implementation of policies regarding pricing and subsidies. Local governments should deliver their promised subsidies promptly to alleviate the burden of heat suppliers hit by serious losses due to rising fuel costs. After the heating period, prices should be adjusted according to the law to manage the costs appropriately. The price adjustments regarding people's heating services should be strictly implemented via legal procedures.
Third, we will make sure that local governments take on the responsibility of ensuring energy supplies. If a heat supplier stops their supply, then local governments must take on the responsibility of ensuring heat supply unconditionally.
Fourth, we will implement targeted measures to help enterprises. We will strictly implement a government responsibility system to assist and support heat suppliers. The working group sent by the government should take on responsibilities and make coordinated efforts to deal with the difficulties and problems encountered by enterprises in a timely manner.
Fifth, we will implement the monitoring and fast-handling mechanism to deal with individual cases. While the total amount of heat supply can be ensured, it is crucial to prevent the emergence of various individual cases. We will thus give full play to the coordination mechanism to address individual cases in the supply of energy, as well as the hotline 12398 for complaints and reports on energy supervision across the nation, which has been mentioned by Mr. Zhang. By doing so, we will intensify public opinion monitoring and supervise the handling of individual cases in a bid to ensure that each case is assigned to the relevant department and addressed with feedback. Thank you.
_ueditor_page_break_tag_
Shou Xiaoli:
Two last questions.
China Daily:
The global energy supply and demand situation has been grim and complicated since last year, leading to energy supply shortages and drastic price fluctuations. What measures has the NEA adopted to ensure domestic oil and gas markets remain stable? Thank you.
Zhang Jianhua:
Thank you for your question. The Central Economic Work Conference in 2022 pointed out that major enterprises, especially State-owned enterprises, should take the lead in efforts to ensure supply and keep energy prices stable. The NDRC and the NEA have worked with departments, local governments, and enterprises to deal with the drastic fluctuations in the international energy market since the Russia-Ukraine conflict. We have made stepped-up efforts in the following aspects:
First, based on clear market expectations at the beginning of 2022, we have controlled the growth rate of natural gas consumption appropriately and regularly. By doing so, we have prevented large-scale imports of spot LNG products at high prices, while also avoiding the possibility of exacerbating the turmoil in the international market, contributing to our efforts to ensure a stable global market.
Second, we have made great efforts to discover more untapped reserves, and increase production, to ensure supply and maintain the stability of prices. In 2022, China's natural gas production increased by over 10 billion cubic meters, the sixth consecutive year the country has maintained such growth. As the import demand for natural gas is declining, the natural gas self-sufficiency rate, therefore, increased by almost 3 percentage points year on year.
Third, we have made greater efforts to build a new type of energy system with multiple energy sources complementing each other. Coal has been used as an emergency back-up source of power in industrial production or power generation during off-peak hours to reduce the use of natural gas. By doing so, we have ensured that natural gas is used to provide heat for residential homes during the heating season, which is our top priority.
Fourth, we have ensured that centrally administered state-owned enterprises in the oil and gas sectors play a major role in maintaining stable supplies and prices. We have implemented a comprehensive pricing method for the “resources pool” of oil and gas products, which considers prices of domestically produced products, those of the long-term import contracts, and a small amount of the imported spot products. In this way, we have been able to ensure stable prices.
Fifth, we have formulated lists of projects every year since we start to build our energy production, supply, storage and marketing systems. As such, greater efforts have been made to improve our oil and gas pipeline networks and gas storage facilities, with an average annual increase of 100 million cubic meters per day in our supply capacity over the past five years. We have overcome the bottleneck in oil and gas infrastructure capacity since the heating season in 2021. The infrastructure is capable enough to ensure abundant energy supplies during this year's heating season, thus ensuring supplies in terms of total amount and demand during peak hours as long as there are enough resources. Thank you.
_ueditor_page_break_tag_
Economic Daily:
It is widely believed that energy enterprises that sign and honor medium- and long-term energy contracts play a crucial role in keeping stability in energy supplies. However, according to some enterprises, the medium- and long-term energy contracts they signed were not able to fully cover their demands, and some of these contracts could not be fulfilled. What will be done to further promote the signing and honoring of the medium- and long-term energy contracts? Thank you.
Lian Weiliang:
Thank you for your question. As has been mentioned, medium- and long-term energy contracts have served as both a ballast and an anchor for keeping energy supplies and prices stable. It is also an important institutional innovation based on China's national conditions to ensure stability in energy supplies and prices. Medium- and long-term contracts are of great significance for stabilizing supply and demand-side expectations, locking resources, controlling costs, and ensuring supplies. Just now, you mentioned some specific cases. After an in-depth investigation, we found that behind these cases exist, to varying degrees, the problem that enterprises did not sign medium- and long-term contracts or the contracts they signed did not fully cover their demands. Therefore, the role of medium- and long-term energy contracts should be given better play to ensure energy supplies. The problem of fulfilling contracts, as you mentioned, still exists. This year, we will take stronger measures to help solve these problems. To be specific, we will ensure that all contracts that should be signed will be signed and that enterprises will be punished for the breach of contracts.
First, we will ensure that all contracts concerned will be signed. In some medium- and long-term energy contracts, whether to include some contents in the contracts is utterly decided by market entities through their negotiations. However, concerning the contents that relate to public interests, people's livelihoods, and ensuring energy supplies, enterprises should officially sign medium- and long-term contracts under the guidance of the government in a well-regulated way. For example, we have made it clear that when it comes to coal for electricity power generation and heating supplies and gas supplies for household use, medium- and long-term contracts should be signed in a well-regulated way under the guidance of the government. It should also be ensured that all contracts concerned are signed. The goal we put forward in this regard is full coverage of 100%. At present, some small-scale heating and gas supply enterprises lack enough knowledge of the medium- and long-term contract system and fail to make full use of it. Some enterprises exist in special stages and are unwilling to sign medium- and long-term contracts. In response to that, we will guide various functional departments at all levels within the government to make greater efforts to publicize and explain the system to enterprises. Some enterprises have stated that they can't get medium- and long-term contracts. Coordination mechanisms to ensure the supply of coal, electricity, oil, gas, and transportation services at all levels will therefore work to solve the problems enterprises encounter when signing these contracts.
Second, we will ensure that enterprises will be punished for the breach of contracts. A credit system is the base of a market economy. Honoring contracts in good faith is the fundamental responsibility of enterprises. While signing contracts is important, fulfilling contracts is more important. Now, as there is a certain gap between prices in the medium- and long-term contracts and those in the market, there are some cases where some enterprises do not perform well in honoring contracts. The government will therefore tighten regulation of all medium- and long-term energy contracts. As of last year, over 300 complaints have been received regarding enterprises failing to follow or fulfill contracts. We have promoted relevant enterprises to rectify their problems, and most of these problems have been corrected. Concerning medium- and long-term contracts designed to ensure energy supplies, especially in contracts relating to coal for electricity power generation and heating supply, a punishment and constraint mechanism has been established to require enterprises that fail to fulfill their contracts offer three times the quantity and the price of resources as prescribed in the contracts. There are five cases where enterprises have failed to abide by their contracts. Since these enterprises refused to rectify their problems, we have taken measures to punish them in accordance with the punishment and constraint mechanism. We have also put these enterprises on a list of severely dishonest enterprises and will continue to monitor their credit. For government-led medium- and long-term energy contracts, especially contracts concerning people's livelihoods, we will ensure that all contracts concerned are signed and fully implemented. We welcome friends from the media and all sectors of society to strengthen oversight and report clues to us about enterprises that fail to abide by contracts, and we will strictly urge them to fully rectify their problems.
Thank you.
Shou Xiaoli:
Thank you to all the speakers and to the friends from the media for your presence. Later we will hold the next press conference. You are welcome to join us then.
Translated and edited by Zhang Liying, Wang Qian, Huang Shan, Zhou Jing, Liu Stiong, Yan Bin, Zhang Junmian, Qin Qi, He Shan, Zhang Rui, Wang Wei, Gong Yingchun, Ma Yujia, Xu Kailin, Li Huiru, David Ball, Daniel Xu, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
