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Energy Updates of 2003~2004 in China

Asian Energy Security Workshop. Energy Updates of 2003~2004 in China. Aling ZHANG, Yanjia WANG, Alun GU Tsinghua University 5.12-5.14, Beijing. Review energy changes in China. Energy shortages of coal, oil and electricity in China Coal production: 1.667 billion tons

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Energy Updates of 2003~2004 in China

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  1. Asian Energy Security Workshop Energy Updates of 2003~2004 in China Aling ZHANG, Yanjia WANG, Alun GU Tsinghua University 5.12-5.14, Beijing

  2. Review energy changes in China • Energy shortages of coal, oil and electricity in China Coal production: 1.667 billion tons electricity: 1901 Twh oil consumption: 266 million tons • Energy consumption increases rapidly

  3. Energy consumption in China Million tce Year Source: BP energy review 2003

  4. Energy consumption per capita Source: BP energy review 2003

  5. Consumption Growth rate compared with 2002 Steel 0.27 billion tons 28.6% cement 0.836 billion tons 15.3% Electrolytic aluminium 11.68 million tons 15.7% Recent energy data in China • Investment in three industries steel, cement and electrolytic aluminum increased rapidly this first quarter despite repeated warning from the national government

  6. Overheated investment • the production capacity of steel industry will reach 0.33 billion tons in 2005 , but the demand is expected to 0.33 billion tons in 2010 • In the electrolytic aluminum industry, the production capacity will outreach one time than the market expect in 2005 • In the cement industry, the total investment has grew up 133% in the same period

  7. Raw material Growth rate Crude oil 20% steel 15% Iron stone 3 times than the same period The price increment in raw material • The booming investment has led to a price increase in raw material for three industries • Compared with the same period, the growth rate of some raw material:

  8. Reasons • The demand for steel, electrolytic aluminum and cement is one reason for the fast investment • The other reason is that local governments focus too much on the economic growth and believe in investment growth as a method to push the local economy

  9. The national relevant policy and plan • Driven by the high profits, overheat investment will not slow down without central government intervention • The central government has sent 10 inspection teams to 20 provinces, autonomous regions and municipalities to seek solutions for the investment growth

  10. Electricity Shortage in China • China will still face the shortage in electricity supply in 2004, just similar in 2003 Provinces Electricity blackouts in China comparison

  11. Electricity shortage in China

  12. Electricity Price in rural areas • From April in 2004, the rural electricity price (not including Tibet) in China will be the same with urban price • The power price difference between rural and urban was 0.5 yuan RMB before • The National Development Reform Commission adjusts the electricity price, 0.02-0.03/kwh yuan RMB in western regions, 0.005-0.02/kwh yuan RMB in central and eastern regions. (9th May)

  13. The national relevant policy and plan • in 2004 adjustment and control over such high-power-consuming industries • regulate and clean up the favorable price for electricity • Nonetheless, some factories will be forced to suspend their production

  14. The national relevant policy and plan • Many provinces will suffer electricity blackouts this summer for the power plants under construction will run in 2006. • Speed up the national-wide interconnection of power networks • Increase the power supply and expand power saving measures

  15. Oil price follows global oil market • The National Development Reform Commission raised benchmark gasoline rates by 300 yuan (US$36.5) per ton, or 8 percent, but kept prices of diesel unchanged on March 31, 2004. • That reflects the price hike on the international oil market and the price adjustment is to catch up with the international crude oil price hike.

  16. World Oil Price : 1970-2003 (From EIA)

  17. Oil consumption • In 2003, the import dependency of oil in China is about 36.5% • China imported about 91.12 million tons of crude oil in 2003, year-on-year rise of 31.29% • In the first quarter, the import oil volume reached 30 million tons

  18. Oil consumption per capita Source: BP energy review 2003

  19. Private-owned vehicles per 100 comparison Private-owned vehicles per 100 Source: China Statistical Yearbook 2002

  20. The national relevant policy and plan • How to solve the effect of international oil price fluctuation on our economy. • In the last years, our focus lies on how to find the oil and produce oil. • In the futures, China should learn how to buy the oil in the lower price. • China should take part in the international oil market.

  21. The national relevant policy and plan • Last year China had begun to build up the oil strategy reserve system. • But this system should be speeded up under the oil price fluctuation. • Some researches had supposed that China could build a system of 20 or 30 days, then increase 90 days later. (from IEA)

  22. Expanding Natural gas USE in China • For the reasons of environment, natural gas use in China had rapidly increased recent years. • Government hope that gas will account for at least 10 percent of energy demand by 2020, up from the current 3 percent.

  23. Map of China’s Primary Natural Gas and Coal bed Methane Reserves Source: expanding natural gas use in china 2002

  24. Output and growth of natural gas in China Source: China Statistic Yearbook 2000

  25. Natural Gas Usage in China • In the Chinese market, natural gas usage will be focused in power generation, followed by the chemical industry as feedstock, the industrial sector as fuel, and residential sector as a cooking and heating source • The end usage is to be located in northeast China, near the Bohai Sea and along the southeast coastal provinces.

  26. The national relevant policy and plan • Guangdong Province will import LNG from Australia in 2005 • Fujian Province will import from Indonesia in 2006 • For geographical reason, importing LNG will have cost advantage in southern province in China

  27. The national relevant policy and plan • China has a priority policy on the domestic development for the political reasons • China has set up the Renewable Energy Promotion Law • China has set up the national mid-long technology planning

  28. The Regional Alternative path of LEAP model in China • The base year: 2000. • Data source: from yearbook or the public report. • There is no change in the structure of the model. • We modify the data in the LEAP model.

  29. Next steps • Adjust some data in our LEAP model • How to realize the energy efficiency in the LEAP model

  30. Thank you for your attentiongal@mail.tsinghua.edu.cn

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