Bulletin

Energy Production and Consumption Revolution Strategy: A long-term commitment to facilitate energy efficiency improvement in China

26 Jun 2017

As the world’s largest energy consumer, China has been continuously accelerating the pace of its energy policy reforms over the past decades with the aim of improving the country’s energy efficiency. According to the Global Tracking Framework Report by UN SE4ALL, China’s cumulative energy savings between 1990 to 2010 account for over half the world’s total cumulative energy savings in the same period[1]. During the 12th Five Year Plan (2011-2015), its cumulative improvement in energy intensity increased by 18.4%.

Following China’s commitment to peak CO2 emissions in 2030 at the 21st Convention of Parties to the UNFCCC (COP 21), the government launched a long-term Strategy of Energy Production and Consumption Revolution (2016-2030) in December 2016. As a guiding document, this Strategy is seen an ambitious commitment to support China’s Nationally Determined Contribution in the long-run. It includes comprehensive policies and measures to:

  • Reform the demand side: 1) controlling total energy consumption; 2) structural change on industrial transformation (to support the advanced industries and the service sector); 3) further improving energy conservation and emission reduction; 4) promoting urban and rural electrification; and 5) behavior and awareness change.
  • Reform the supply side: 1) optimising the production and utilisation of coal; 2) enabling renewable energy to match the majority of demand growth; 3) promoting supply-side management; and 4) developing smart energy system
  • Reform the energy market: 1) establishing a market-based energy price mechanism; 2) transformation towards a more inclusive, efficient and competitive energy market; 3) innovate administration and reducing government intervention; and 4) optimising the legal system governing energy.
  • Innovation of energy technology: 1) scaling-up the deployment of energy efficient technologies; 2) promoting RD&D of technologies related to energy development and use; 3) developing smart energy system technologies; and 4) improving research capacity for frontier technologies.
  • Strengthen international energy cooperation and improve domestic energy security.

In sum, the Strategy outlines 13 key measures covering behaviour change, “Double Control”, clean energy, energy efficiency, technological innovation, digitalisation of energy networks, standards, and international collaboration.

The Strategy also sets up binding targets to complement China’s existing policies for different timeframes. For example, between 2016 to 2020 (the 13th Five-Year Plan period), China will improve energy efficiency by a minimum of 15% and to cap total energy consumption to 5 billion tons of coal equivalent (TCE). Between 2020 and 2030, China will cap total energy consumption to less than 6 billion TCE, meeting the growing energy demand through renewable energy and having non-fossil fuels account for 20% of total energy consumption by 2030 and over 50% by 2050. In addition, it calls for the further reduction of the total energy consumption share of coal. As a result, the estimated investment demand in energy conservation and renewable energy will amount to USD 10.3 trillion between 2015 and 2030[2].

Through the ambition of its new Strategy, China will continue to work towards meeting the Paris Agreement and take concrete steps to transform its energy system.

 

[1] https://www.iea.org/publications/freepublications/publication/Global_Tracking_Framework.pdf

[2] http://lib.cet.com.cn/paper/szb_con/477943.html