18 June 2010

China's Energy Supply Conundrum

The FT BeyondBRICs blog reports that China is going to be instituting mandatory restrictions on energy use among its most intensive industries:

China is about to get tougher on energy-intensive industries, according to Xie Zhenhua, a top official responsible for the country’s climate-change policies. Xie, vice-chairman of the powerful National Development and Reform Commission, sounded a note of alarm about China’s decrease in energy efficiency this year and outlined stricter policies to curb energy consumption in an interview with the People’s Daily earlier this week.

Xie said the government may cap electricity supplies in some areas, and that any subsidies provided to energy-intensive industries must end immediately. The Chinese government has set an ambitious goal of reducing China’s energy intensity-a measure of the energy consumption vis a vis GDP-by 20 per cent between 2005 and 2010.
Some are suggesting that the actions of the Chinese government reflect a seriousness about climate policies:
''It's very encouraging overall for the global climate change issues,'' said Wu Changhua, head of greater China operations at the Climate Group. Ms Wu said ''these more aggressive comments and very serious actions'' reflected leadership resolve to hit energy targets and prepare the ground to exceed China's pledge to reduce carbon emissions by 40-45 per cent by 2020.
However, if you think that these polices have much to do with China's efforts to meet targets related to climate change policy, best to think again:
An official with China's economic planning agency said on Thursday that the nation's power supply would meet its general demand, though regional black-outs are likely to occur during peak hours.

Liu Tienan, deputy minister of the National Development and Reform Commission (NDRC), said the electricity supply in northeast and northwest China would be adequate, while electric supplies in the more developed east, south and north China would be rather tight.

The nation's power supply is complicated this summer as new problems arising from the economic recovery could have an impact upon power demands, Liu said during an industrial video conference.

China still faces grim conditions due to planned reductions in factory emissions, while the supply of coal used to generate electricity, along with unpredictable weather conditions, pose uncertainties to the power supply, Liu added.

He asked local authorities to ensure electricity remains available for people's homes, while placing a cap on the power used by power-guzzling industries.

Hospitals, schools and service industries, as well as those with low energy consumption, currently enjoy priority use of electricity.

Further, electricity should be guaranteed for the Shanghai World Expo and within the Yushu region in northwest China which was hard hit by a 7.1-magnitude earthquake in April.
China needs all the energy that it can get and more. The government policies have far more to do with prioritized rationing of energy supply than any serious effort to accelerate decarbonization of the Chinese economy.

5 comments:

  1. "The government policies have far more to do with prioritized rationing of energy supply"

    I think this statement is closer to the truth
    http://www.upi.com/Business_News/2010/06/17/Chinas-energy-policy-leans-toward-supply/UPI-15111276794104/
    "There is a stronger sense of energy security than climate change," said Zou Ji, who retired as China's international climate change negotiator last year"

    If they have to import it, they'll think hard about finding an alternative.

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  2. "The Chinese government has set an ambitious goal of reducing China’s energy intensity-a measure of the energy consumption vis a vis GDP-by 20 per cent between 2005 and 2010."

    HUH??

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  3. jae,

    That was China's self proclaimed goal.
    China's economy expanded by 50% in those 5 years.

    Total 2010 economy = 150% of 2005 X 80% energy intensity = Total energy use 120%.

    Two ways to cut energy intensity, increase GDP or cut energy use. Of course if a recession occurs, the increasing GDP plan goes out the window.

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  4. Not sure this is 'new' news.

    http://economictimes.indiatimes.com/news/international-business/China-nuclear-power-to-hit-70-GW/articleshow/6067358.cms

    "JAPAN: China plans to boost nuclear power generation capacity nearly eightfold by 2020, to 70 gigawatts, a Japanese government official quoted China's Zhang Guobao, head of the National Energy Administration, as saying on Saturday."

    They'll need a build rate of one plant every other month to get there.

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  5. Roger, OT, but I told ya the Stanford poll was bogus:

    http://www.collide-a-scape.com/2010/06/15/the-outlier/

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