significantly declined. In 2016, the gas price in
international markets dropped—the average
annual Port Henry price, UK National Balancing
Price (NBP) and Japan Liquefied Natural Gas
Import price were 2.49/$ per million British
thermal units (Mbtu), $4.64/Mbtu and $6.8/Mbtu
respectively, down 5%, 30% and 36% respectively on the previous year, and the price differences between the three indexes narrowed.
According to statistics from the General Administration of Customs, China’s average natural gas
import price was $305/t in 2016, down 27% on
2015. In particular, the average price of imported
pipeline gas and imported LNG were $270/t and
$343/t, 31 and 24% lower than in 2015.
The electricity price continued to decline,
which helped lower the cost to the real economy. In January 2016, China introduced the
coal-electricity price linkage mechanism, and
lowered the feed-in tariff for coal-fired generating
units and the retail price for general industrial
and commercial use by RMB 0.03/kWh, helping
businesses to reduce their electricity expenditure
by about RMB 22.5 billion. The feed-in tariff for
renewable energy decreased: the benchmark
feed-in tariff for onshore wind power in Class 1,
2 and 3 resource-rich areas was decreased by
RMB 0.03/kWh, and in Class 4 resource-rich
areas by RMB 0.01/kWh. The benchmark feed-in
tariff for solar photovoltaic power in Class 1 and
2 resource-rich areas was decreased by RMB
0.1/kWh, and in Class 3 resource-rich areas by
RMB 0.02/kWh. The pilot reform of power
transmission and distribution pricing passed the
strict cost supervision and review test, reducing
power transmission and distribution prices by
16.3%.
2.5 Imports of Major Energy Sources
Grow Rapidly and Oil
and Gas Imports Hit
a Record High
In the context of lower international energy prices, China’s imports of coal, crude oil and natural gas grew rapidly in 2016, with growth rates
exceeding 10%. As a result, China’s dependence
on oil and gas imports rapidly increased. Exports
of oil products also grew significantly.
The strong rebound in China’s coal price
stimulated a significant increase in coal imports.
International coal prices, affected by trends in
bulk energy commodities like oil, rose only
slightly. Meanwhile, lower shipping prices made
imported coal more price-competitive in China’s
south-east coastal areas. All these factors led to
coal imports increasing from May 2016 onwards,
with total coal imports in 2016 reaching 256 Mt,
up 25.2% from 2015, while coal exports were
8.78 Mt. Net coal imports were 247 Mt, 48 Mt
(24.2%) higher than in 2015.
Due to a build-up in oil reserves and changes
in the regulations regarding the right to import
crude oil, China’s crude oil imports grew sharply
to 381 Mt in 2016, equal to that of the USA. This
figure was 45 Mt higher than in 2015, reflecting
an annual growth rate of 13.6%. Driven by this
significant growth, China’s dependence on oil
imports hit a record high of 64.4, 3.9% points
higher than in 2015.
Despite the limited growth in domestic
demand, China’s annual net exports of oil products reached 32.55 Mt, a substantial increase of
11.2 Mt compared to 2015. Exports of oil products accounted for 10.7% of China’s total crude
oil processing capacity, and 17.9% of the total
net oil product exports of the Asia-Pacific region
in 2016, 5.2% points higher than in 2015. China
became the third largest exporter of oil products
in Asia-Pacific, after Japan and South Korea.
In 2016, due to lower international natural gas
prices, rising natural gas demand in China and
many new long-term contracts, China’s natural
gas imports resumed their high growth, though
this came at the cost of lower production at
domestic gas fields. Data issued by the National
Bureau of Statistics of China show that natural
gas imports were about 74.5 billion cubic metres
in 2016, an increase of 21.9% on the previous
year. LNG imports increased particularly sharply, by 11 billion cubic metres. In addition,
China’s dependence on natural gas imports
reached 34.2%, up 3.1% points.
Special Report 4: China’s Energy System Revolution
417
international markets dropped—the average
annual Port Henry price, UK National Balancing
Price (NBP) and Japan Liquefied Natural Gas
Import price were 2.49/$ per million British
thermal units (Mbtu), $4.64/Mbtu and $6.8/Mbtu
respectively, down 5%, 30% and 36% respectively on the previous year, and the price differences between the three indexes narrowed.
According to statistics from the General Administration of Customs, China’s average natural gas
import price was $305/t in 2016, down 27% on
2015. In particular, the average price of imported
pipeline gas and imported LNG were $270/t and
$343/t, 31 and 24% lower than in 2015.
The electricity price continued to decline,
which helped lower the cost to the real economy. In January 2016, China introduced the
coal-electricity price linkage mechanism, and
lowered the feed-in tariff for coal-fired generating
units and the retail price for general industrial
and commercial use by RMB 0.03/kWh, helping
businesses to reduce their electricity expenditure
by about RMB 22.5 billion. The feed-in tariff for
renewable energy decreased: the benchmark
feed-in tariff for onshore wind power in Class 1,
2 and 3 resource-rich areas was decreased by
RMB 0.03/kWh, and in Class 4 resource-rich
areas by RMB 0.01/kWh. The benchmark feed-in
tariff for solar photovoltaic power in Class 1 and
2 resource-rich areas was decreased by RMB
0.1/kWh, and in Class 3 resource-rich areas by
RMB 0.02/kWh. The pilot reform of power
transmission and distribution pricing passed the
strict cost supervision and review test, reducing
power transmission and distribution prices by
16.3%.
2.5 Imports of Major Energy Sources
Grow Rapidly and Oil
and Gas Imports Hit
a Record High
In the context of lower international energy prices, China’s imports of coal, crude oil and natural gas grew rapidly in 2016, with growth rates
exceeding 10%. As a result, China’s dependence
on oil and gas imports rapidly increased. Exports
of oil products also grew significantly.
The strong rebound in China’s coal price
stimulated a significant increase in coal imports.
International coal prices, affected by trends in
bulk energy commodities like oil, rose only
slightly. Meanwhile, lower shipping prices made
imported coal more price-competitive in China’s
south-east coastal areas. All these factors led to
coal imports increasing from May 2016 onwards,
with total coal imports in 2016 reaching 256 Mt,
up 25.2% from 2015, while coal exports were
8.78 Mt. Net coal imports were 247 Mt, 48 Mt
(24.2%) higher than in 2015.
Due to a build-up in oil reserves and changes
in the regulations regarding the right to import
crude oil, China’s crude oil imports grew sharply
to 381 Mt in 2016, equal to that of the USA. This
figure was 45 Mt higher than in 2015, reflecting
an annual growth rate of 13.6%. Driven by this
significant growth, China’s dependence on oil
imports hit a record high of 64.4, 3.9% points
higher than in 2015.
Despite the limited growth in domestic
demand, China’s annual net exports of oil products reached 32.55 Mt, a substantial increase of
11.2 Mt compared to 2015. Exports of oil products accounted for 10.7% of China’s total crude
oil processing capacity, and 17.9% of the total
net oil product exports of the Asia-Pacific region
in 2016, 5.2% points higher than in 2015. China
became the third largest exporter of oil products
in Asia-Pacific, after Japan and South Korea.
In 2016, due to lower international natural gas
prices, rising natural gas demand in China and
many new long-term contracts, China’s natural
gas imports resumed their high growth, though
this came at the cost of lower production at
domestic gas fields. Data issued by the National
Bureau of Statistics of China show that natural
gas imports were about 74.5 billion cubic metres
in 2016, an increase of 21.9% on the previous
year. LNG imports increased particularly sharply, by 11 billion cubic metres. In addition,
China’s dependence on natural gas imports
reached 34.2%, up 3.1% points.
Special Report 4: China’s Energy System Revolution
417