1 China’s Energy Transition Strategy in the Context of Global …
11
Natural Gas and Renewable Energy Become Important Supplement
The decreased share of coal was largely due to the substantial increase in natural gas,
hydropower and wind. The proportion of natural gas in China’s primary energy grew
from 3.2 to 7.5%, whose proportion had the largest increase among all primary energy
sources. This was attributed to China’s vast gas pipelines built during the “11th and
12th Five-Year Plan periods”. The relative growth rate of hydropower reached 120%,
and its proportion increased by 0.2%. Wind power capacity expanded by as much
as 55 times, and its share rose by 1.1%. During the “12th Five-Year Plan” period,
wind power was viewed as the second most important priority of renewable energy
development.
Increasing Dependence on Foreign Oil and Gas Undercut Energy Security
The spike in oil and gas consumption had threatened energy security. Although
China had made a lot of efforts in domestic oil and gas development, it was still
difficult to keep up with the rapid growth of oil and gas demand, which made oil and
gas consumption mainly rely on imports. By 2017, foreign dependence of oil had
approached 70%, and gas nearly 40% (NBSC 2018). This had posed challenge to
China’s energy security. Meanwhile, the rapid penetration of renewable energy such
as solar and wind had brought about serious wind and solar curtailment.
1.3.2.2 Industry
With Rapid Growth of Industrial Energy Consumption and Predominant Steel
Industry, It is in Urgent Need to De-capacity.
Industrial passive systems remained the largest energy consumer in terms of end-use.
The total industrial energy consumption has maintained sustained growth, with its
proportion up from 60% in 2005 to 65% in 2015. The ferrous metal mining and
manufacturing, predominant steel industry, contributed the biggest growth, mainly
because China was still in the process of industrialization which entailed increasing
steel consumption on a per capita basis. In 2008, China offered RMB 4 trillion
stimulus package to boost infrastructure construction. Due to excessive expectation
of demand increase, plenty of steel production plants were launched and subsequently
laid idle, leading to glaring overcapacity in 2015 with great inertia. Thus, achieving
de-capacity in the steel sector was a matter of great urgency in facilitating low-carbon
transition.
11
Natural Gas and Renewable Energy Become Important Supplement
The decreased share of coal was largely due to the substantial increase in natural gas,
hydropower and wind. The proportion of natural gas in China’s primary energy grew
from 3.2 to 7.5%, whose proportion had the largest increase among all primary energy
sources. This was attributed to China’s vast gas pipelines built during the “11th and
12th Five-Year Plan periods”. The relative growth rate of hydropower reached 120%,
and its proportion increased by 0.2%. Wind power capacity expanded by as much
as 55 times, and its share rose by 1.1%. During the “12th Five-Year Plan” period,
wind power was viewed as the second most important priority of renewable energy
development.
Increasing Dependence on Foreign Oil and Gas Undercut Energy Security
The spike in oil and gas consumption had threatened energy security. Although
China had made a lot of efforts in domestic oil and gas development, it was still
difficult to keep up with the rapid growth of oil and gas demand, which made oil and
gas consumption mainly rely on imports. By 2017, foreign dependence of oil had
approached 70%, and gas nearly 40% (NBSC 2018). This had posed challenge to
China’s energy security. Meanwhile, the rapid penetration of renewable energy such
as solar and wind had brought about serious wind and solar curtailment.
1.3.2.2 Industry
With Rapid Growth of Industrial Energy Consumption and Predominant Steel
Industry, It is in Urgent Need to De-capacity.
Industrial passive systems remained the largest energy consumer in terms of end-use.
The total industrial energy consumption has maintained sustained growth, with its
proportion up from 60% in 2005 to 65% in 2015. The ferrous metal mining and
manufacturing, predominant steel industry, contributed the biggest growth, mainly
because China was still in the process of industrialization which entailed increasing
steel consumption on a per capita basis. In 2008, China offered RMB 4 trillion
stimulus package to boost infrastructure construction. Due to excessive expectation
of demand increase, plenty of steel production plants were launched and subsequently
laid idle, leading to glaring overcapacity in 2015 with great inertia. Thus, achieving
de-capacity in the steel sector was a matter of great urgency in facilitating low-carbon
transition.