The annual session of National People’s Congress will be open next week. Observers predict the nation’s energy security issue will continue to be one of the focuses in the session amid the rapid economic growth.
Energy experts say the series of new measures taken by the China for energy mechanism in recent period shows China, now a world main economic entity formed after 10 years economic growth by relying on energy intensive mode development, is currently speeding up structuring a new style comprehensive energy policy framework so as to guarantee energy security and sustainable development.
Last month, China set up a National Energy Committee, a highest level energy institution headed by the director - the State Council Premier Wen Jiabao and the deputy director - Vice Premier Li Keqiang. The Committee is designated to enhance energy strategic decision making and planning coordination and ensure policy succession.
Director of Industrial Economic Department of State Council Development Research Center, Mr. Feng Fei said that the National Energy Committee will mainly solve the crucial problem in energy field and problem of comprehensive nature, and at the same time, solve the present prevailing highlighted and critical issues too.
China has now expedited energy legislation process and list it into legislation program of the State Council. It was learnt that the draft “Energy Law” has been submitted to the State Council. In November last year, Law Reinforcement Office of the State Council modified and presented the exposure draft for review and recommendation from domestic and overseas experts and scholars.
The law will remedy the defect with Chinese comprehensive energy laws. It will provide important support for formulating and implementing a set of complete, coordinated, effective and sustainable energy policy. Previously most legislative and supervisory measures were for temporary purpose and for matters of expediency.
Since the climate change is closely related to excessive consumption of fossil energy, energy law will be an important law for China to confront climate change. It will play a key role to safeguard China in achieving the target of confronting climate change.
By the end of November last year, Chinese Government declared an action objective in controlling greenhouse air emission. Accordingly, China proposed a plan that the weight of non-fossil energy consumption would reach 15% of total one time energy consumption by 2020. In 2008, the production of hydropower, nuclear power and other renewable energy accounted for only 8.4% of all energy output.
Furthermore, Chinese Government is setting out to optimize and adjust the input structure of its energy and other production essentials, expediting the establishment of resources saving technical mechanism and product system in order to push economic and industrial structure renovation and promote the growth pattern transfer of all fields.
It is reported that China is working out national energy development medium and long term planning guideline and has started up the filing of “12th 5-year (2011-2015) energy planning”.
A joint subject research report prepared by World Bank and Development Research Center of State Council shows that, Chinese energy growth is unsustainable without fundamental reform. Therefore it is necessary for China to lay down a new legislative framework and associated policies and measures.
The study stated that Chinese energy sustainable growth should cover a grow rate of energy consumption much less than economic growth rate, scientific and reasonable use of domestic energy resources, strengthening energy mechanism to enable it to endure interrupted supply impact and protect environment.
Mr. Feng Fei, the person in charge of the center from China side, said, “currently, China is mainly relying on investment and export to sustain the rapid economic growth which is in other words based on the backward energy system. As a result, the sustainable growth of Chinese energy industry is on very high risk.
As a result of rapid development of heavy chemical industry, urbanization, modernization and moving in of international manufacturing industries, energy consumption has been at swift growth in the last decade. The total quantity has been increased from 1,390,000,000 tons of standard coal from 2000 to the predicted 3,100,000,000 tons by 2009, much higher than the expected by the Government. Increased quantity in recent 10 years is times of total quantity consumed in 20 years before the onset of reform and opening policy.
In addition, China’s energy consumption elastic coefficient rapidly jumped to over 1 standard (2000-2005) from 0.42 standard 20 years before start of reform and opening policy. Although the coefficient declined below 1 from 2006, it remains higher than the level before 2000.
China became a crude oil net import country since 1993, a coal net import country first time from 2009. In 2009, China’s net import of crude oil was 198,620,000 tons at foreign dependence rate of 51.2%, much higher than 5.3% in 1995.
Unlike the fast speed growth of total consumed energy, China’s energy structural adjustment process is at quite slow pace. Among other things, as for coal consumption, it is extremely difficult to meet the target of 3% reduction set for “11th 5-year planning” (2006-2010) since only 0.7% was reduced in the first 3 years.
As a result of slow pace in economic and industrial structural adjustment, only 50% was achieved in the first 3 years of “11th 5-year planning” against the target set by the 5-year program in respect of energy consumption decline. For instance, in 2008, weight of high energy consuming heavy chemical industry exceeded 70% which even toppled the historical peak value in 1959.
In 2009, to confront the international financial crisis, China implemented large scale economic stimulus program. The program not only guaranteed rapid economic growth but inevitably stimulated the growth of high energy consuming industry like steel and cement, which in the end increased the difficulty in reducing energy consumption. It is predicted this year’s “Government Report” would promulgate decline value of energy consumption intensity for 2009.
Mr. Feng Fei introduced that China would be facing enormous trouble in achieving the target of reducing unit GDP energy consumption by 20% set in “11th 5-year planning”.
President of China, Hu Jintao pointed out this month that “a key to the economic growth patter transformation is attaching importance to “expediting to realize solid effect”.
Former director of Energy Research Center of China Development and Reform Committee, Mr. Zhou Dadi said “Although this year’s task of energy saving and reducing consumption is severally tough, the real progress is better than last year. For long term view, China must make up a comprehensive long effective energy saving consumption reducing mechanism without delay so as to guarantee energy growth sustainability.