However, to transform the traditional energy
system into a clean, low-carbon, secure and
efficient modern energy system requires some
deeply seated conflicts and issues to be addressed
urgently. First, the excessive production and use
of coal remains unsolved. The measures to cut
overcapacity, implemented in 2016, haven’t
resolved oversupply. Cutting overcapacity will
remain the industry’s main focus over the next 3–
5 years. Second, the slowdown in growth in
power demand is at odds with the rapidly
increasing installed capacity of new power generation. As it takes time to improve peak-shaving
capacity, there are still difficulties in connecting
renewable energy to the grid. Wind, solar and
hydro curtailments will remain for some time.
Third, as the coal-fired generating units under
construction in the latter part of the 12th
Five-year Plan (2011–15) are put into operation,
the total number of operating hours of coal-fired
generating units are predicted to fall to around
4,100 in 2017. Meanwhile, as the price of coal
returns to a reasonable level, the risk of operating
at a loss increases across the entire coal-fired
power generation sector. Fourth, the development of natural gas is still restricted by its
comparatively expensive price. There are
numerous difficulties in deregulating the natural
gas end-use pricing system, which are slowing
the growth of downstream gas consumption.
3.2 Five Drivers of the Energy
Revolution
3.2.1 Changes and Diversification
in International Energy
Supply
According to the forecasts of energy companies
like BP and agencies like the U.S. Energy
Information Administration (EIA), global energy
demand will continue to grow slowly. By 2020,
total global energy demand will reach 14.6 billion barrels of oil equivalent (boe), and the
growth rate will decrease from 2.0% in 2010 to
1.3% in 2020. By 2030, the growth rate will
decline to about 1.0%, with global energy
demand at 15.4 billion boe.
Meanwhile, with the rise of unconventional
energy like shale oil and shale gas, supply is
becoming increasingly diversified. Influenced by
the shale gas revolution in the USA, other
countries in the Americas—including Argentina,
Brazil, Canada and Venezuela—are exploiting
their rich resources. As the development of
unconventional oil and gas increasingly matures,
the Americas are expected to become the second
Middle East.
According to the EIA, US oil imports dropped
to 24% in 2015, in sharp contrast to 60.3% in
2005. The USA is very likely to become a net oil
exporter by 2020. Canada’s oil production,
according to the IEA’s predictions, will reach
30–60 million barrels per day by 2030. With
abundant conventional oil and gas resources,
both onshore and offshore, Canada is expected to
develop into an energy superpower in the coming
years.
As clean energy, renewables will play an
increasingly important role in diversifying
energy supply. According to the IEA, renewable
energy (including hydropower) will account for
half of newly added global power output and
almost a third of global power generating
capacity by 2035, making it the dominant power
source.
3.2.2 Stable Economic Development Is
a Solid Foundation
for the Energy Revolution
Needless to say, China’s socioeconomic development will face unprecedented difficulties and
challenges in the future. These include a fall in
the working age population, severe overcapacity
in traditional industries like steel and mining, low
participation in high value-added segments, and
increasing exposure to environmental problems
caused by intensive industrial development.
However, China still holds huge development
potential and resilience. It has fully developed
industries, rich human resources and rising
innovation capability, which provide a solid
foundation for future development.
In October 2015, the Fifth Plenary Session of
18th CPC Central Committee adopted the CCP
Central Committee Proposals for the Formulation
Special Report 1: A Study of China’s Energy Supply Revolution
127
system into a clean, low-carbon, secure and
efficient modern energy system requires some
deeply seated conflicts and issues to be addressed
urgently. First, the excessive production and use
of coal remains unsolved. The measures to cut
overcapacity, implemented in 2016, haven’t
resolved oversupply. Cutting overcapacity will
remain the industry’s main focus over the next 3–
5 years. Second, the slowdown in growth in
power demand is at odds with the rapidly
increasing installed capacity of new power generation. As it takes time to improve peak-shaving
capacity, there are still difficulties in connecting
renewable energy to the grid. Wind, solar and
hydro curtailments will remain for some time.
Third, as the coal-fired generating units under
construction in the latter part of the 12th
Five-year Plan (2011–15) are put into operation,
the total number of operating hours of coal-fired
generating units are predicted to fall to around
4,100 in 2017. Meanwhile, as the price of coal
returns to a reasonable level, the risk of operating
at a loss increases across the entire coal-fired
power generation sector. Fourth, the development of natural gas is still restricted by its
comparatively expensive price. There are
numerous difficulties in deregulating the natural
gas end-use pricing system, which are slowing
the growth of downstream gas consumption.
3.2 Five Drivers of the Energy
Revolution
3.2.1 Changes and Diversification
in International Energy
Supply
According to the forecasts of energy companies
like BP and agencies like the U.S. Energy
Information Administration (EIA), global energy
demand will continue to grow slowly. By 2020,
total global energy demand will reach 14.6 billion barrels of oil equivalent (boe), and the
growth rate will decrease from 2.0% in 2010 to
1.3% in 2020. By 2030, the growth rate will
decline to about 1.0%, with global energy
demand at 15.4 billion boe.
Meanwhile, with the rise of unconventional
energy like shale oil and shale gas, supply is
becoming increasingly diversified. Influenced by
the shale gas revolution in the USA, other
countries in the Americas—including Argentina,
Brazil, Canada and Venezuela—are exploiting
their rich resources. As the development of
unconventional oil and gas increasingly matures,
the Americas are expected to become the second
Middle East.
According to the EIA, US oil imports dropped
to 24% in 2015, in sharp contrast to 60.3% in
2005. The USA is very likely to become a net oil
exporter by 2020. Canada’s oil production,
according to the IEA’s predictions, will reach
30–60 million barrels per day by 2030. With
abundant conventional oil and gas resources,
both onshore and offshore, Canada is expected to
develop into an energy superpower in the coming
years.
As clean energy, renewables will play an
increasingly important role in diversifying
energy supply. According to the IEA, renewable
energy (including hydropower) will account for
half of newly added global power output and
almost a third of global power generating
capacity by 2035, making it the dominant power
source.
3.2.2 Stable Economic Development Is
a Solid Foundation
for the Energy Revolution
Needless to say, China’s socioeconomic development will face unprecedented difficulties and
challenges in the future. These include a fall in
the working age population, severe overcapacity
in traditional industries like steel and mining, low
participation in high value-added segments, and
increasing exposure to environmental problems
caused by intensive industrial development.
However, China still holds huge development
potential and resilience. It has fully developed
industries, rich human resources and rising
innovation capability, which provide a solid
foundation for future development.
In October 2015, the Fifth Plenary Session of
18th CPC Central Committee adopted the CCP
Central Committee Proposals for the Formulation
Special Report 1: A Study of China’s Energy Supply Revolution
127