2015 (an increase of 282,500 GWh). Specifically, the growth rate of power consumption by
the service industries and urban and rural
households was 11.2% and 10.8% respectively,
far higher than the growth rate of 2.9% in manufacturing. The service industries and urban and
rural households accounted for 56% of the
country’s total power consumption.
The third factor was that consumption of oil
products kept growing, though there was a clear
difference between petrol and diesel. In 2016, as
China restructured its economy and modernised
consumption patterns, use of oil products continued to rise. According to the Bureau of Economic Operations Adjustment of the National
Development Reform Commission (NDRC),
China’s total consumption of oil products was
289 Mt in 2016, up 5% on 2015. Specifically,
petrol consumption grew by 12.3%, due to the
rising number of vehicles on the road. At the
same time, macroeconomic trends and industrial
restructuring led to a decline in diesel consumption, down 1.2% from 2015, although there
was a gradual increase in demand for industrial
diesel. Aviation fuel continued its high growth
trend, up 10.4% on the preceding year but 7%
points lower than previously due to the popularity of high-speed rail. High consumption
levels of oil products and significant imports of
crude oil meant China’s apparent oil consumption reached 556 Mt in 2016, up 5.5% on the
previous year.
The fourth factor was that China’s natural gas
consumption picked up, though its share of total
energy use remained low. Data from the National
Bureau of Statistics (NBS) show that China’s
total apparent natural gas consumption reached
208.6 billion cubic metres in 2016, up 8 or 4.6%
points on 2015 (an increase of 15.5 billion cubic
metres). However, natural gas’s share of primary
energy consumption remained at a low 6.3, only
4% higher than in the early 21st century. Driven
by a market-oriented natural gas pricing system
and new controls on air pollution, natural gas has
begun to replace coal projects in many provinces.
And on the residential side, a tiered gas pricing
mechanism has been launched to encourage the
shift to gas. In addition, natural gas consumption
in several major sectors has significantly
increased. According to the NBS data, the power
sector used the most natural gas in 2015; gas
consumption in the coal, gas and water production and supply sectors reached 35.27 billion
cubic metres, up 30.87% on 2014 (an increase of
8.106 billion cubic metres).
The fifth factor is a significant increase in the
use and share of non-fossil energy. In 2016, use
of commercial non-fossil energy was around 541
Mtce, accounting for 12.4% of China’s total
energy consumption. Adding non-commercial
new energy brings the share to 13.3%, a rise of
1.3% on 2015. Initial estimates show that consumption of primary electricity reached about
1,701,000 GWh, up 11.2% (171,000 GWh) on
2015. Non-fossil energy use rose by about 60
Mtce, making it the largest contributor to the
increase in consumption.
9
So, by taking a broad range of measures,
China continued to optimise its energy system in
2016. Coal’s share of energy consumption
decreased for the third consecutive year, and
non-fossil energy was the main source of new
energy use. Coal’s share of primary energy
consumption was 62%, down 1.7% points on
2015, whereas oil’s share was 18.3%, similar to
2015. The share of natural gas and fossil fuels in
primary energy consumption was 6.4% and
13.3% respectively, up 0.5% and 1.25% on 2015.
Changes in China’s patterns of energy production and consumption over the past decade have
impacted the relationship between supply and
demand, driving reform (Fig. 14).
2.2 Sharp Decrease in Energy
Production and Significant
Rise in Clean Energy Supply
In 2016, China’s total primary energy production
was about 3.46 Btce, down 4.2% from 2015.
Coal and crude oil production sharply decreased,
9
Xiao Jianxin et al., Analysis of China’s Energy Development in 2016 and the 2017 Energy Outlook for China,
in Energy of China, Issue 3, 2017.
412
S. Yaodong and A. Gillespie
the service industries and urban and rural
households was 11.2% and 10.8% respectively,
far higher than the growth rate of 2.9% in manufacturing. The service industries and urban and
rural households accounted for 56% of the
country’s total power consumption.
The third factor was that consumption of oil
products kept growing, though there was a clear
difference between petrol and diesel. In 2016, as
China restructured its economy and modernised
consumption patterns, use of oil products continued to rise. According to the Bureau of Economic Operations Adjustment of the National
Development Reform Commission (NDRC),
China’s total consumption of oil products was
289 Mt in 2016, up 5% on 2015. Specifically,
petrol consumption grew by 12.3%, due to the
rising number of vehicles on the road. At the
same time, macroeconomic trends and industrial
restructuring led to a decline in diesel consumption, down 1.2% from 2015, although there
was a gradual increase in demand for industrial
diesel. Aviation fuel continued its high growth
trend, up 10.4% on the preceding year but 7%
points lower than previously due to the popularity of high-speed rail. High consumption
levels of oil products and significant imports of
crude oil meant China’s apparent oil consumption reached 556 Mt in 2016, up 5.5% on the
previous year.
The fourth factor was that China’s natural gas
consumption picked up, though its share of total
energy use remained low. Data from the National
Bureau of Statistics (NBS) show that China’s
total apparent natural gas consumption reached
208.6 billion cubic metres in 2016, up 8 or 4.6%
points on 2015 (an increase of 15.5 billion cubic
metres). However, natural gas’s share of primary
energy consumption remained at a low 6.3, only
4% higher than in the early 21st century. Driven
by a market-oriented natural gas pricing system
and new controls on air pollution, natural gas has
begun to replace coal projects in many provinces.
And on the residential side, a tiered gas pricing
mechanism has been launched to encourage the
shift to gas. In addition, natural gas consumption
in several major sectors has significantly
increased. According to the NBS data, the power
sector used the most natural gas in 2015; gas
consumption in the coal, gas and water production and supply sectors reached 35.27 billion
cubic metres, up 30.87% on 2014 (an increase of
8.106 billion cubic metres).
The fifth factor is a significant increase in the
use and share of non-fossil energy. In 2016, use
of commercial non-fossil energy was around 541
Mtce, accounting for 12.4% of China’s total
energy consumption. Adding non-commercial
new energy brings the share to 13.3%, a rise of
1.3% on 2015. Initial estimates show that consumption of primary electricity reached about
1,701,000 GWh, up 11.2% (171,000 GWh) on
2015. Non-fossil energy use rose by about 60
Mtce, making it the largest contributor to the
increase in consumption.
9
So, by taking a broad range of measures,
China continued to optimise its energy system in
2016. Coal’s share of energy consumption
decreased for the third consecutive year, and
non-fossil energy was the main source of new
energy use. Coal’s share of primary energy
consumption was 62%, down 1.7% points on
2015, whereas oil’s share was 18.3%, similar to
2015. The share of natural gas and fossil fuels in
primary energy consumption was 6.4% and
13.3% respectively, up 0.5% and 1.25% on 2015.
Changes in China’s patterns of energy production and consumption over the past decade have
impacted the relationship between supply and
demand, driving reform (Fig. 14).
2.2 Sharp Decrease in Energy
Production and Significant
Rise in Clean Energy Supply
In 2016, China’s total primary energy production
was about 3.46 Btce, down 4.2% from 2015.
Coal and crude oil production sharply decreased,
9
Xiao Jianxin et al., Analysis of China’s Energy Development in 2016 and the 2017 Energy Outlook for China,
in Energy of China, Issue 3, 2017.
412
S. Yaodong and A. Gillespie