Revolutionize Energy Production and Consumption

Revolutionize Energy Production and Consumption* 

June 13, 2014 

Energy security is an issue of general and strategic significance in the economic and social development of a country. It is crucial to driving national development and prosperity, improving standards of living, and ensuring lasting social peace and stability. In the face of changes in energy demand and supply and new developments in the international energy landscape, China must ensure national energy security by increasing energy production and creating a revolution in consumption. This is a long-term strategy, but it must be supported by key tasks and major steps that require immediate action. 

After years of development, China has become the world's largest energy producer and consumer, with an energy supply structure that includes coal, electricity, petroleum, natural gas, new energy, and renewable energy. Remarkable improvements have been made in technology and equipment, and in the efficiency of both domestic and industrial energy use. Although China has achieved great success in energy development, it still faces a range of challenges, including huge pressure on the demand side, a number of supply limitations, serious environmental damage caused by energy production and consumption, and outdated technology. We must develop a strategic overview of national development and security to assess the situation, and then define a sound energy blueprint for the future. 

First, we must revolutionize energy consumption, and rein in irrational energy use. We need to impose strict controls on overall energy use, effectively implement a policy in which energy conservation is the top priority, and save energy across the board in all spheres of economic and social activity. We should also adjust the structure of the energy industry, make energy conservation a priority in urbanization, and encourage an attitude to consumption characterized by diligence and thrift. We must build an energy-conserving society. 

Second, we must revolutionize energy supply. To ensure energy security we must set up a supply system reliant on diversified energy sources, promote the clean and efficient use of coal, and develop non-coal energy sources, thereby creating an energy supply system driven by coal, petroleum, natural gas, nuclear energy, new energy and renewable energy. At the same time, we should upgrade our transmission and distribution network, and build more storage facilities. 

Third, we must revolutionize energy technology, and upgrade the related industrial structure. We should encourage innovation in technology, in industry, and in business models, and pursue green and low-carbon energy development suited to our national conditions and adapted to positive international trends in the energy technology revolution. We will combine such innovation with new and high technology in other fields, and transform our energy technology and related industries into a new powerhouse to drive the overall industrial upgrading of our country. 

Fourth, we must revolutionize the energy market. We will proceed with reform, restore energy's status as a commodity, build a system of workable competition, and put in place a mechanism in which energy prices are largely driven by the market. In addition, we will change the way that the government supervises the energy industry, and establish and improve the legal framework for energy development. 

Fifth, we must enhance international cooperation in all sectors, and ensure that opening up supports energy security. While relying mainly on domestic energy sources, we will strengthen international cooperation in all sectors related to energy production and consumption, and make effective use of resources from other countries. 

We need to study the 13th Five-year Plan for energy development, and work out a strategy to revolutionize energy production and consumption by 2030. We will move faster in revising energy efficiency standards. All outdated regulations must be revised, updated on a regular basis and implemented. We will continue to build large coal-fueled electricity generating power bases each with a capacity of ten million kw. We will tighten the criteria for coal-burning power stations, upgrading all those that do not meet energy conservation and emission reduction standards within a specified time, and continue to develop long-distance, high-capacity power transmission technology. New nuclear projects on the coast will be launched as soon as possible, and they will be subject to the world's highest safety standards. 

In addition, China will encourage energy cooperation through the Belt and Road Initiative, and expand oil and gas cooperation with countries in Central Asia, the Middle East, the Americas and Africa. We will also intensify our efforts in energy exploration and extraction, and build more oil and gas pipelines and storage facilities. We will improve our emergency response, enhance capacity building, improve systems providing energy statistics, and launch initiatives to create, revise and abrogate laws and regulations in the energy sector. 

* Main points of the speech at the sixth meeting of the Central Leading Group on Financial and Economic Affairs. 

(Not to be republished for any commercial or other purposes.)