shareholding in SunPower, the world’s second
largest solar panel manufacturer. SunPower made
net profits of $246 million in 2014 and became a
key pillar of Total’s business performance. In
2016, Total acquired Saft Groupe, a Francebased battery manufacturer, for €950 million.
This company ranks 15th in the world in fields
like nickel-cadmium batteries, high-performance
disposable lithium batteries and lithium-ion
satellite batteries.
It is clear that these traditional energy titans
have had a profound influence on technological
progress, especially in new energy, while carrying out their own strategic readjustments.
2 Current Developments in China’s
Energy Industry
In 2016, China’s energy supply and demand
situation was generally improving. Structural
reform of the supply side was under rapid
implementation, and there was steady progress in
realigning the energy system. However, the traditional sectors—coal, coal-fired power generation, refining and chemicals—were still running
at overcapacity, and the development of clean
energy was facing major challenges.
2.1 Slight Growth in Energy Demand
and Significant Progress
in Changing the Energy
System
In 2016, China’s total energy demand was 4,360
million tonnes of coal equivalent (Mtce), up
1.4% (60 Mtce) on 2015. This was 2.2% lower
than the average annual growth rate during the
12th Five-Year Plan (2011–15) and 5.3% lower
than that for the 13th Five-Year Plan (2016–20).
The first reason for this change was a sharp
decrease in China’s coal consumption, especially
scattered coal. In 2016, China’s total coal consumption was 3,780 Mt, down 4.7% (185 Mt)
from 2015. This was the third consecutive
decrease since 2014, and it slowed down growth
in total energy consumption. Between 2011 and
2015, China’s total energy consumption
increased by 7.4%, an annual growth rate of less
than 1.5%. This was in sharp contrast to the
average annual growth rate of 7.9% between
2000 and 2011. China’s energy consumption per
unit of GDP fell by 18.2% between 2011 and
2015, exceeding the goal of the 12th Five-Year
Plan (2011–15); it then declined by a further 5%
in 2016. This shows that China is supporting
economic and social development, while reducing energy consumption and using less resources.
Individual sectors tell a similar story: between
January and November 2016, coal consumption
in the power and steel industries decreased by
0.4% and 0.6% respectively, compared to the
same period in 2015; coal consumption in
building materials remained at the same level as
2015; coal consumption in chemicals increased
by 7.2%; and coal use in other sectors decreased
by 10.7%. Coal consumption in power, steel,
building materials and chemicals represented
47.9%, 16.3%, 13.8% and 7.2% respectively of
total coal use during the same period, up 0.6, 0.1,
0.3 and 0.6% from 2015, while coal consumption
in other sectors accounted for 14.9% of the total,
down 1.5% from 2015. The reduction in coal
consumption in other sectors, especially of scattered coal, was driven mainly by the policies on
air pollution control introduced in the previous
two years. From 2016, major projects designed to
reduce coal consumption, such as modernising
coal-fired boilers and substituting waste heat and
shallow geothermal energy for coal in household
heating, were developed in the Beijing-TianjinHebei region to reduce coal consumption. The
scope of this pilot coal reduction and substitution
programme was gradually expanded to include
the Yangtze River and Pearl River deltas, as well
as Liaoning, Shandong and Henan. The scope
was also extended from power projects to
non-power projects.
The second influential factor was that China’s
power consumption grew steadily and the
demand for power from service industries and
households increased significantly. The National
Energy Administration’s data show that China’s
total power consumption was 5,920,000
gigawatt-hours (GWh) in 2016, up 5% from
Special Report 4: China’s Energy System Revolution
411
largest solar panel manufacturer. SunPower made
net profits of $246 million in 2014 and became a
key pillar of Total’s business performance. In
2016, Total acquired Saft Groupe, a Francebased battery manufacturer, for €950 million.
This company ranks 15th in the world in fields
like nickel-cadmium batteries, high-performance
disposable lithium batteries and lithium-ion
satellite batteries.
It is clear that these traditional energy titans
have had a profound influence on technological
progress, especially in new energy, while carrying out their own strategic readjustments.
2 Current Developments in China’s
Energy Industry
In 2016, China’s energy supply and demand
situation was generally improving. Structural
reform of the supply side was under rapid
implementation, and there was steady progress in
realigning the energy system. However, the traditional sectors—coal, coal-fired power generation, refining and chemicals—were still running
at overcapacity, and the development of clean
energy was facing major challenges.
2.1 Slight Growth in Energy Demand
and Significant Progress
in Changing the Energy
System
In 2016, China’s total energy demand was 4,360
million tonnes of coal equivalent (Mtce), up
1.4% (60 Mtce) on 2015. This was 2.2% lower
than the average annual growth rate during the
12th Five-Year Plan (2011–15) and 5.3% lower
than that for the 13th Five-Year Plan (2016–20).
The first reason for this change was a sharp
decrease in China’s coal consumption, especially
scattered coal. In 2016, China’s total coal consumption was 3,780 Mt, down 4.7% (185 Mt)
from 2015. This was the third consecutive
decrease since 2014, and it slowed down growth
in total energy consumption. Between 2011 and
2015, China’s total energy consumption
increased by 7.4%, an annual growth rate of less
than 1.5%. This was in sharp contrast to the
average annual growth rate of 7.9% between
2000 and 2011. China’s energy consumption per
unit of GDP fell by 18.2% between 2011 and
2015, exceeding the goal of the 12th Five-Year
Plan (2011–15); it then declined by a further 5%
in 2016. This shows that China is supporting
economic and social development, while reducing energy consumption and using less resources.
Individual sectors tell a similar story: between
January and November 2016, coal consumption
in the power and steel industries decreased by
0.4% and 0.6% respectively, compared to the
same period in 2015; coal consumption in
building materials remained at the same level as
2015; coal consumption in chemicals increased
by 7.2%; and coal use in other sectors decreased
by 10.7%. Coal consumption in power, steel,
building materials and chemicals represented
47.9%, 16.3%, 13.8% and 7.2% respectively of
total coal use during the same period, up 0.6, 0.1,
0.3 and 0.6% from 2015, while coal consumption
in other sectors accounted for 14.9% of the total,
down 1.5% from 2015. The reduction in coal
consumption in other sectors, especially of scattered coal, was driven mainly by the policies on
air pollution control introduced in the previous
two years. From 2016, major projects designed to
reduce coal consumption, such as modernising
coal-fired boilers and substituting waste heat and
shallow geothermal energy for coal in household
heating, were developed in the Beijing-TianjinHebei region to reduce coal consumption. The
scope of this pilot coal reduction and substitution
programme was gradually expanded to include
the Yangtze River and Pearl River deltas, as well
as Liaoning, Shandong and Henan. The scope
was also extended from power projects to
non-power projects.
The second influential factor was that China’s
power consumption grew steadily and the
demand for power from service industries and
households increased significantly. The National
Energy Administration’s data show that China’s
total power consumption was 5,920,000
gigawatt-hours (GWh) in 2016, up 5% from
Special Report 4: China’s Energy System Revolution
411