China's road to energy security (2)

Oct 03, 2008 (Xinhua via COMTEX) -- EYDVF | Quote | Chart | News | PowerRating -- In the 11th Five-year (2005-2010) Energy Development Plan (FYEDP), an annual average growth of 3.5 percent was targeted in primary energy production to reach 2.446 billion TCE by 2010.

Coal energy would be developed in an orderly manner, the plan said, with digging operations moderately increasing in western China -- Shanxi, Shaanxi and Inner Mongolia. Coal mines in east China would be tapped in an optimal way.

Drilling would be accelerated in oil and gas fields in central and western regions and offshore areas. Onshore oil and gas resources would be tapped in an optimal way, the 11th FYEDP said.

To secure supply in emergency situations, China began to build up its strategic oil reserves in 2004. The first four bases, totaling 12 million tons of storage capacity, are located in the coastal regions. Construction of the Zhenhai facility in the eastern Zhejiang Province has been completed. The rest will be ready in 2010. The entire plan, including the second and third batches of projects to be completed before 2020, aimed at a combined capacity of 68 million tons.

The government has acknowledged the importance of clean and renewable energies. China has abundant resources in hydropower and wind, solar, biofuel, geothermal and tidal energies. Renewable energies and nuclear power accounted for 7.5 percent of total energy consumption last year. The State Renewable Energy Medium- and Long-term Planning (SREMLP) aimed at raising the renewable share to 10 percent in 2010 and 15 percent in 2020.

China's hydro potential ranks first in the world. The country has a long history and rich experience in exploitation. Installations of hydropower reached 145,000 mw through 2007. The target is 190,000 mw for 2010.

Wind and solar are two promising renewable sources. The nation's total wind installation reached nearly 6,000 mw in capacity through 2007. The government lifted the wind target for 2010 from 5,000 mw to 10,000 mw. "The new target is still conservative. Actual installation may reach 20,000 mw by the time," China Wind Energy Association Vice President Shi Pengfei said.

The latest statistics available show the country's nuclear power capacity totaled 9,100 mw, with 11 reactors in operation. By 2020, the State Nuclear Power Development Plan aims at a total installation of 40,000 mw, which would account for 4 percent of the nation's total power capacity. Compared with the world average of 14.8 percent and close to 80 percent in some leading countries, there was much room for China's nuclear development.

About a half of its oil supply now comes from abroad. Saudi Arabia is the biggest source. China diversifies its sources by purchasing from Angola, Iran, Oman, Venezuela, Sudan and Russia. The country has also started to develop oil drilling projects in other countries too.

As energy becomes a common, big problem worldwide, China joins other countries in seeking solutions. The country is part of a seven-party, 30-year international program aiming at exploiting nuclear energy via atomic fusions. It has reached bilateral agreements with governments of more than 30 countries for cooperation in new and clean energy development. In January it signed an accord with India for cooperation in civilian use of nuclear power.

The importance of energy had led to calls for reinstatement of the energy ministry. But the National People's Congress, the top legislature, in March endorsed a plan for reforming the existing Energy Bureau, which was given a bigger say on energy issues than the old bureau nestled in NDRC. The NDRC's Zhang Guobao was also appointed director general of the new institution.

In the case of the Sinopec gas station, government control of oil prices was another factor for the shortage. On June 19, the government announced an increase in petrol and diesel prices by 1,000 yuan per ton. The margins of the price hike were the biggest ever. As a result, retail price of No. zero diesel in Beijing went up to 6.23 yuan from 5.29 yuan a liter.

The line of waiting vehicles shortened at the gas station, where attendants were again busily refueling vehicles stopping by. Business was back to normal, at least for the time being.

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