day is only 45% that of a petrol-driven taxi
(measured at the Beijing price level in March
2016). This amounts to a lower daily fuel cost of
RMB 85, or RMB 30,000 per year over
350 days. Even though it costs up to RMB
10,000 to convert a small taxi from petrol to
CNG, operating costs are much lower than those
of petrol taxis.
LNG offers a long driving range and is more
suitable for large trucks and urban buses. The
price of an LNG-fuelled heavy-duty truck is
RMB 80,000–100,000 higher than a diesel truck
of the same horsepower. Given the price of LNG
is only 50–70% that of #0 diesel of the same
calorific value, the fuel cost of an LNG-fuelled
heavy truck travelling 150,000 km per year is
around RMB 140,000 lower than diesel, enabling
the difference in purchase price to be recovered
in less than a year.
(2) Optimal paths for gas-fired power
generation
Constraints are holding back the development of
gas-fired power generation in China. These
include barriers to collaboration on critical technologies between China’s major gas-fired
equipment manufacturers and overseas companies, a lack of locally developed gas-fired alternative technologies, uncoordinated gas supply
and power generation, incomplete support policies and standards, and rising gas prices. And
power plant design, construction, operation and
maintenance, and safety management need to be
improved.
To make gas-fired power generation sustainable, China should: (i) increase investment in
innovation and develop core technologies,
including gas-fired power generation equipment;
(ii) unplug the management bottlenecks in the
power and gas industries; and (iii) deepen power
system and gas pricing reform, and allow the
market to truly play the decisive role in resource
allocation.
To summarise, due to technology and pricing
constraints, there are still big uncertainties in
China’s gas-fired power generation sector.
However, with sufficient support from the government and breakthroughs in local development
of core technologies, the sector has great growth
potential in the future.
5.4 Accelerate the Integration of New
Energy with Conventional
Fossil Energy
In the vast country of China, the geographical
distribution of fossil energy and new energy
sources like solar, hydro, wind and biomass is
uneven. Due to unbalanced economic development in east, central and west China, energy
supply and demand in these regions vary greatly.
Energy development should therefore be adapted
to local conditions and local energy resources.
National energy revolution policies should be
implemented to diversify energy demand. And,
energy consumption should consistently follow
resource conservation and be clean, sustainable
and efficient.
An integrated development system and
cooperation platform for conventional and new
energy should be established. Currently, conventional energy and new energy develop separately. A cooperation platform that gives play to
their complementary advantages and delivers
synergies is absent. For instance, the
long-distance transmission of solar photovoltaic
and wind power needs the infrastructure of coal
power transmission networks. But due to higher
energy costs and unstable output, as well as
constraints from the power industry, it is difficult
to connect new energy to the grid and deliver it
to consumers. China, therefore, needs to build a
flexible cooperation platform for different types
of energy demand to speed up the integration of
conventional and new energy.
Subsidy policies should be improved to drive
the sustainable development of new energy. It
will take a long time for new energy to replace
fossil fuels, but the shift is already under way.
The initial stages of new energy development are
characterised by high capital investment, low
returns and high production and operating costs,
so national subsidy policies are needed. When
new energy technologies mature and their costs
fall to an acceptable level, new energy can be
276
Y. Jianlong and M. Haigh
(measured at the Beijing price level in March
2016). This amounts to a lower daily fuel cost of
RMB 85, or RMB 30,000 per year over
350 days. Even though it costs up to RMB
10,000 to convert a small taxi from petrol to
CNG, operating costs are much lower than those
of petrol taxis.
LNG offers a long driving range and is more
suitable for large trucks and urban buses. The
price of an LNG-fuelled heavy-duty truck is
RMB 80,000–100,000 higher than a diesel truck
of the same horsepower. Given the price of LNG
is only 50–70% that of #0 diesel of the same
calorific value, the fuel cost of an LNG-fuelled
heavy truck travelling 150,000 km per year is
around RMB 140,000 lower than diesel, enabling
the difference in purchase price to be recovered
in less than a year.
(2) Optimal paths for gas-fired power
generation
Constraints are holding back the development of
gas-fired power generation in China. These
include barriers to collaboration on critical technologies between China’s major gas-fired
equipment manufacturers and overseas companies, a lack of locally developed gas-fired alternative technologies, uncoordinated gas supply
and power generation, incomplete support policies and standards, and rising gas prices. And
power plant design, construction, operation and
maintenance, and safety management need to be
improved.
To make gas-fired power generation sustainable, China should: (i) increase investment in
innovation and develop core technologies,
including gas-fired power generation equipment;
(ii) unplug the management bottlenecks in the
power and gas industries; and (iii) deepen power
system and gas pricing reform, and allow the
market to truly play the decisive role in resource
allocation.
To summarise, due to technology and pricing
constraints, there are still big uncertainties in
China’s gas-fired power generation sector.
However, with sufficient support from the government and breakthroughs in local development
of core technologies, the sector has great growth
potential in the future.
5.4 Accelerate the Integration of New
Energy with Conventional
Fossil Energy
In the vast country of China, the geographical
distribution of fossil energy and new energy
sources like solar, hydro, wind and biomass is
uneven. Due to unbalanced economic development in east, central and west China, energy
supply and demand in these regions vary greatly.
Energy development should therefore be adapted
to local conditions and local energy resources.
National energy revolution policies should be
implemented to diversify energy demand. And,
energy consumption should consistently follow
resource conservation and be clean, sustainable
and efficient.
An integrated development system and
cooperation platform for conventional and new
energy should be established. Currently, conventional energy and new energy develop separately. A cooperation platform that gives play to
their complementary advantages and delivers
synergies is absent. For instance, the
long-distance transmission of solar photovoltaic
and wind power needs the infrastructure of coal
power transmission networks. But due to higher
energy costs and unstable output, as well as
constraints from the power industry, it is difficult
to connect new energy to the grid and deliver it
to consumers. China, therefore, needs to build a
flexible cooperation platform for different types
of energy demand to speed up the integration of
conventional and new energy.
Subsidy policies should be improved to drive
the sustainable development of new energy. It
will take a long time for new energy to replace
fossil fuels, but the shift is already under way.
The initial stages of new energy development are
characterised by high capital investment, low
returns and high production and operating costs,
so national subsidy policies are needed. When
new energy technologies mature and their costs
fall to an acceptable level, new energy can be
276
Y. Jianlong and M. Haigh