Since economic reforms began in 1978, China's Gross Domestic Product (GDP) has expanded at an average rate of over 9 percent per year. However this economic success has been accompanied by a series of energy concerns -- insufficient energy supply, heavy reliance on coal despite its negative environmental impact, and a low level of energy efficiency. These issues are becoming increasingly pressing as Beijing plans to quadruple its GDP within the next 15 years.
Prague, 10 June 2005 (RFE/RL) -- Blessed with an abundance of natural resources, the remote city of Yulin in Shaanxi province is trying to transform itself into a Chinese "Little Kuwait."
The centerpiece of the plan is the Jinjie Industrial Zone, an area of eight square kilometers that is expected to become an energy and chemicals-producing hub.
Workers at a vast construction site are building a plant that will turn coal into electricity here in the middle of a desert in northern China.
When finished, the plant will generate energy for coastal cities and for the 2008 Olympics to be held in Beijing.
The production of the new plant is a reflection of China's new status as the second-largest energy consumer in the world after the United States.
Liu Wei is the director of one of China's biggest independent refineries, called Yanlian, which is pumping out 4.5 million tons of oil per year south of Yulin.
He told Reuters that China's rocketing economy has translated into growing appetite for energy that the country is not always able to satisfy: "China's energy shortages are severe, and market demand is really high. So we don't have the problem of not being able to sell our products. Our problem is how to grow big and strong and develop quickly."
Last year, China was hit by its worst power problems in two decades. More than half of its provinces suffered blackouts due to a lack of generators and a shortage of coal.
Coal makes up a large proportion of the country's energy mix, and will continue to do so in the years to come.
But China's efforts to secure reliable supplies of oil and natural gas around the world reflect just how strong the country's thirst for fossil fuels has become. The country is scrambling against other economic powers to secure sources of fossil fuels in the Caspian Sea region, Russia, Western Africa, Iraq, Iran, and Libya.
Beijing is also developing the exploration of its own resources. Zhang Zhenwen is the director of state-owned PetroChina's natural gas purifying plant in Changqing, also in Shaanxi province.
"Demand for power grows ever greater, so the pressure on us, working in natural gas exploration, rises too," Zhang said. "We continue to explore sources of natural gas, while making sure our existing stocks are used well."
But Zhao Jiarong, from the National Development and Reform Commission, says increasing the domestic and overseas energy production by all means is not enough.
She calls for increased energy saving and efficiency -- a critical issue in China, where end-user energy efficiency is 10 percent below the average of developed countries.
"If we keep going in our current direction, it will be very hard for us to reach the target of quadrupling GDP by 2020," Zhao said. "In order to solve China's energy problem, we must urgently build up our stocks of coal, natural gas, oil, and chemicals, as well as other renewable resources such as nuclear power. We must actively engage in international cooperation. We must also improve energy efficiency and cut down on waste."
Zhao was speaking on 6 June in Beijing at the launch of a 12-year program to make government agencies and private businesses use energy more wisely so that overall consumption, plus attendant pollution, goes down.
Khalid Malik is the resident representative of the United Nations Development Program (UNDP), which is supporting the program. He told Reuters that China's development targets would bring great pressure for China to improve energy efficiency and to address the climate change challenge:
"China has enormous challenge ahead of itself. It plans to quadruple income levels by 2020, but only to double energy levels. So in order to do that, there's a huge amount of wrenching effort which has to be taken. And efficiency is a core element of that."
According to the UNDP, the program should help coal use decline by 19 million tons over three years, and carbon emissions should decline by 76 million tons over 12 years.
The government plans to invite six firms from energy-intensive sectors -- steel, chemicals, and cement -- to join pilot programs over the next three years. Energy efficiency standards and labeling for electrical goods in the residential and service sector ranging from refrigerators to air conditioners would also be brought in over three years.
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