Outline of Energy/Climate
Policies in China

Dr. Xianbing Liu
Kansai Research CentreIGES, Japan

Basics of Energy Sector in China

2

 Excessive growth in energy supply and use (Total consumption: 2000:1.455 → 2005: 2.36 → 2012: 3.617 billion tce).
 Energy structure is dominated by coal (Around 70% in total energy
consumption).
 The second largest in the world in electricity generation and nearly 4/5 iscurrently from coal-fired power stations.
 Dependency of oil import increased from 26% at the beginning of thiscentury to 57% in 2011.
 World leading producer of renewable energies:


Total output of hydropower in 2012: 860.85 TWh (17.43% of all the electricity generated;
World leader in investment in renewable energy during 2009-2011. In 2011, 87.7% wasdevoted to wind power and solar PV.

 15 nuclear power units with a capacity of 11 GW and output of 54.8 billion
kWh in 2012 (1.9% of the total electricity generation).
 Energy efficiency improvement: 19.1% ↓ during the 11th FYP and 5.5% in
the first two years of the 12th FYP.

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Energy Development Target in China3Indicator
Production of primary energy

Unit
100 mill. tce

2005
21.6

2010
29.7

2015
36.6

Annual growth rate (%)
4.3

Among: Coal

100 mill. ton

23.5

32.4

41

4.8

Crude oil

100 mill. ton

1.8

2.0

2.00

Natural gas

100 mill. m3

493

948

1,565

10.5

Non-fossil energy

100 mill. tce

1.6

2.8

4.7

10.9

Consumption of primary energy

100 mill. tce

23.6

32.5

40

4.3

Power installed capacity

100 mill. kW

5.2

9.7

14.9

9.0

Among: Hydro power

100 mill. kW

1.2

2.2

2.9

5.7

Thermal power100 mill. kW

3.9

7.1

Coal-fired power

100 mill. kW

6.6

9.6

7.8

Natural gas power

10,000 kW

2,642

5,600

16.2

Nuclear power

10,000 kW

685

1,082

4,000

29.9

Wind power

10,000 kW

126

3,100

10,000

26.4

Solar power

10,000 kW

86

2,100

89.5

Data source: the 12th Five-year Plan of Energy Development.

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Energy/Climate Policies in China

4ItemsDescriptions

Targets

 To reduce national energy intensity by 20% from 2005 level by 2010;
 To reduce energy intensity by 16% and GHG emissions intensity by 17%
from 2010 level by 2015;
 To increase non-fossil energy in the national mix to 15% by 2020;
 To cut GHG emissions intensity by 40-45% by 2020 from 2005 levels(Voluntary).

Majorpolicies

 Energy efficiency standards
 Top 10,00 (11th FYP) and 10,000 (12th FYP) energy-consuming enterprises
program
 Subsidies and rewards for energy-saving
 Differential electricity pricing system
 Resource-related tax reform Pilot GHG ETS in 5 municipalities and 2 provinces Carbon tax policy in discussions

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5Challenges of Energy/Climate Policies in China
 The large gap between energy resource endowment and demand.
 Energy demand grows too fast due to the extensive andunsustainable development.
 A lack of investment in the grid connection is the biggest problem
for the renewable energy industry.
 The irrational energy structure imposes high pressure to theenvironment and carbon mitigations.
 Energy-intensive development and high needs for further
improvement in energy efficiency.
 Not capable of innovation in energy sector and high reliance of coretechnologies and advanced large equipment highly from abroad.
 The energy efficiency/climate policies are traditionally dominated byregulative and administrative approaches. China shall learn how topractice market-based instruments for realizing its climate target
effectively and efficiently.
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6Carbon Prices Affordable for the Businesses

CountryChina(N=170; Unit: Yuan/t-CO2)

Korea(N=62; Unit: KRW/t-CO2)

SectorIron & steel Cement(N=34)(N=17)

Chemical(N=27)

Iron & steel(N=11)

Cement(N=5)

Chemical(N=20)MEANAFFORD

8.8%

7.7%

9.9%

2.5%

2.8%

2.6%

Affordable carbon
price42.7

38.6

83.73,770

2,600

3,950

CountryJapan (N=230; Unit: JPY/t-CO2)
Food processing(N=29)

Chemical(N=26)

Iron & steel(N=11)

Electronics(N=12)MEANAFFORD

2.0%

3.1%

1.5%

2.6%

Affordable carbon
price683

1,062

426

801

SectorPlease refer to IGES policy brief No. 29 downloadable at:
http://pub.iges.or.jp/modules/envirolib/view.php?docid=5260

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7

Thank you for your attention!

14 June, 2014