Gao Shixian--Assistant Director General from Energy Research Institute NDRC

Summary: 

Over a long time, coal has dominated energy consumption in China, accounting for 67.2% of the total. While petroleum and natural gas have been dominant in global energy consumption, China is still relying on coal, which poses a tremendous challenge to its energy revolution.

There are two observations for the trend of energy consumption in China. First, China is in the process of fast industrialization and urbanization, which means a growing demand for high-quality energy such as oil, natural gas and electricity. Second, the Twelfth Five-year Plan (2011-2015) sets the target for total energy consumption in 2015 at no more than four billion tonnes of standard coal equivalent. The plan also sets targets for energy efficiency, emission reduction and percentage of non-fossil fuels. If the current development model does not change dramatically, energy shortage will remain a long-term challenge to China and may affect its energy security. Therefore, China must make great efforts to bring about revolutionary changes to the way of energy production and consumption.

The report of the Eighteenth National Congress of the Communist Party of China lists a number of objectives such as making progress in ecological protection, bringing about revolutionary changes to energy production and consumption, total energy consumption control, energy conservation, emission reduction, more government support to energy-saving and low-carbon industries, and new energies, and developing renewable energy resources for national energy security. The Plan of Action for the Prevention and Control of Atmospheric Pollution, which was promulgated by the Ministry of Environmental Protection and approved by the State Council, may slow down the fast growth of motor vehicle ownership. In petrochemical and steel industries, there are more stringent requirements and standards for surplus capacity. The control of total energy and coal consumption may help the optimization of energy consumption structure, especially terminal energy consumption. There has been great interest in the development and utilization of unconventional energy resources and the projects of substitute products for petroleum.

Coal supply will remain to be greater than demand, so the level of coal in stock in the country will be high. Coal price will be subject to minor adjustment and coal companies will face severe challenges in the market. There will be gradual convergence of international and domestic coal prices. Coal import will grow at a stable pace. Electricity consumption will reach 5.3 trillion kilowatt-hours. Generally, power supply is sufficient, so supply and demand are in equilibrium.

Oil production for the year is projected to be 210 million tonnes. A new oil refining capacity of about 40 million tonnes is added so the total capacity will surpass 600 million tonnes. The total amount of crude oil processed will reach 480 million tonnes. The total demand for oil in the year is expected to be about 510 million tonnes, 60% of which comes from import. According to projections, natural gas production in China in 2013 will continue to grow at a high speed. It will reach 115 billion cubic meters for the whole year. The national natural gas consumption will be 165 billion cubic meters, representing an 11.9% increase year on year, which equals to the growth rate in the previous year.