socioeconomic development and energy
consumption.
The Energy Internet can incorporate the different requirements of energy users and extend power
demand-side management into integrated energy
demand management, spanning the entire energy
industry. It enables bidirectional flow and allows
energy consumers to become energy producers,
transforming the traditional way of meeting growing demand with increased energy supply.
6.2 Industry and Energy Capacity
Transformation
In essence, the energy revolution is about
changing the energy system, enabling it to shift
from quantity-based to quality-based supply. It
includes the development of low-carbon energy
from high-carbon sources and the green development of black coal and oil, made possible by
energy system reform and technology innovation. The energy revolution is continuously fostering new types of energy and making
conventional types cleaner and greener. To slow
down energy consumption growth, China’s
energy industry needs to switch from extensive
mode to efficient, high-quality development.
6.2.1 Industry Trends
The goal of energy supply is to build a secure,
efficient, cost-effective, clean and low-carbon
energy production and transmission/distribution
system. To achieve this goal, energy sectors like
coal, oil, natural gas and renewable energy need
to urgently transform their current development
mode into one that is green, efficient and
cost-effective.
(1) Clean, efficient coal
Coal will remain dominant in China’s energy
mix for a long time to come. Clean and efficient
coal use is, therefore, an indisputable requirement for the coal sector. China identifies four
priorities in coal: (i) shift development from
resource-driven to innovation-driven; (ii) shift
coal use from a fuel-only focus to one centred
equally on fuel and the quality of the raw
material; (iii) shift coal production from extensive to intensive green production; and (iv) shift
coal utilisation from high-emission to
low-emission, clean and efficient use.
(2) Green development of conventional and
unconventional oil and gas resources
China’s onshore and conventional oil and gas
production holds limited growth potential, and its
exploitation of deep-sea oil and gas is low.
However, China has abundant unconventional oil
and gas resources. It should therefore adjust its
oil and gas development strategies, switching
focus from: conventional resources to an equal
focus on conventional and unconventional
resources; from onshore to an equal focus on
onshore and offshore; from shallow reservoirs to
middle and deep reservoirs; and to proactively
develop clean and green oil and gas.
(3) Low-cost distributed clean energy
China’s clean energy development of wind, solar
and biomass is still at an early stage. Renewables
do not have a cost advantage over conventional
energy, and their development relies on national
policy support and price subsidies. To deliver the
energy revolution goal of more clean energy,
while remaining competitive and relieving the
fiscal pressure on national government, China
urgently needs to increase investment in clean
energy technologies, reduce clean energy costs
and encourage the development of distributed
systems to use clean energy efficiently.
6.2.2 Energy Capacity Transformation
Replacing fossil energy with clean energy and
substituting electricity for coal and oil is the key
to addressing energy security, environmental
pollution and climate change, and to achieving
the energy revolution. In primary energy, the
goal is to shift from predominantly fossil energy
to predominantly clean energy. In secondary
level conversion, the objective is to replace coal
and oil with electricity and promote the deployment of electric boilers, electric heating systems
and e-mobility to increase the share of electricity
in end-user energy consumption and reduce
fossil energy use and environmental pollution.
Special Report 1: A Study of China’s Energy Supply Revolution
167
consumption.
The Energy Internet can incorporate the different requirements of energy users and extend power
demand-side management into integrated energy
demand management, spanning the entire energy
industry. It enables bidirectional flow and allows
energy consumers to become energy producers,
transforming the traditional way of meeting growing demand with increased energy supply.
6.2 Industry and Energy Capacity
Transformation
In essence, the energy revolution is about
changing the energy system, enabling it to shift
from quantity-based to quality-based supply. It
includes the development of low-carbon energy
from high-carbon sources and the green development of black coal and oil, made possible by
energy system reform and technology innovation. The energy revolution is continuously fostering new types of energy and making
conventional types cleaner and greener. To slow
down energy consumption growth, China’s
energy industry needs to switch from extensive
mode to efficient, high-quality development.
6.2.1 Industry Trends
The goal of energy supply is to build a secure,
efficient, cost-effective, clean and low-carbon
energy production and transmission/distribution
system. To achieve this goal, energy sectors like
coal, oil, natural gas and renewable energy need
to urgently transform their current development
mode into one that is green, efficient and
cost-effective.
(1) Clean, efficient coal
Coal will remain dominant in China’s energy
mix for a long time to come. Clean and efficient
coal use is, therefore, an indisputable requirement for the coal sector. China identifies four
priorities in coal: (i) shift development from
resource-driven to innovation-driven; (ii) shift
coal use from a fuel-only focus to one centred
equally on fuel and the quality of the raw
material; (iii) shift coal production from extensive to intensive green production; and (iv) shift
coal utilisation from high-emission to
low-emission, clean and efficient use.
(2) Green development of conventional and
unconventional oil and gas resources
China’s onshore and conventional oil and gas
production holds limited growth potential, and its
exploitation of deep-sea oil and gas is low.
However, China has abundant unconventional oil
and gas resources. It should therefore adjust its
oil and gas development strategies, switching
focus from: conventional resources to an equal
focus on conventional and unconventional
resources; from onshore to an equal focus on
onshore and offshore; from shallow reservoirs to
middle and deep reservoirs; and to proactively
develop clean and green oil and gas.
(3) Low-cost distributed clean energy
China’s clean energy development of wind, solar
and biomass is still at an early stage. Renewables
do not have a cost advantage over conventional
energy, and their development relies on national
policy support and price subsidies. To deliver the
energy revolution goal of more clean energy,
while remaining competitive and relieving the
fiscal pressure on national government, China
urgently needs to increase investment in clean
energy technologies, reduce clean energy costs
and encourage the development of distributed
systems to use clean energy efficiently.
6.2.2 Energy Capacity Transformation
Replacing fossil energy with clean energy and
substituting electricity for coal and oil is the key
to addressing energy security, environmental
pollution and climate change, and to achieving
the energy revolution. In primary energy, the
goal is to shift from predominantly fossil energy
to predominantly clean energy. In secondary
level conversion, the objective is to replace coal
and oil with electricity and promote the deployment of electric boilers, electric heating systems
and e-mobility to increase the share of electricity
in end-user energy consumption and reduce
fossil energy use and environmental pollution.
Special Report 1: A Study of China’s Energy Supply Revolution
167