Five-Year Plan (2016–20) for Coalbed Methane
(CBM) Development and Use. The 3rd
Five-Year Plan (1966–70) for the CBM sector is
the guideline for China’s exploration and use of
CBM during the 13th Five-Year Plan. The 13th
Five-Year Plan is the decisive stage in building a
moderately prosperous society in all respects and
a critical period for adjusting the energy system
towards diversified energy supply and clean
energy. The CBM sector faces both opportunities
and challenges, but the opportunities tend to
outweigh the challenges.
On the one hand, the external environment is
generally favourable. China has implemented the
necessary energy supply structural reforms to:
(i) increase the share of non-fossil energy and
natural gas in total energy production and
demand; (ii) raise the share of natural gas in total
primary energy demand to 10%; and (iii) encourage the development of CBM. China has
also implemented an innovation strategy and
accelerated the local development of critical
technologies and equipment. As a result, the
technological bottlenecks constraining CBM
development are expected to disappear. As China
introduces increasingly strict requirements for
safety in coal mines, the safe extraction of coalmine gas is a fundamental means to prevent gas
explosions. China has made a solemn commitment to the international community to decrease
CO 2 emissions per unit of GDP by 40–45% by
2020, and that CO 2 emissions will peak around
2030. These factors bring a hard-won opportunity for the rapid development of the CBM
sector.
On the other hand, the sector still has some
challenges that need to be addressed urgently.
CBM is still in its infancy. The size of the market
is small and competition is weak. In recent years,
the price of CBM has dropped significantly due
to the adjustment of natural gas prices, which
offsets the positive effects of subsidies. Moreover, gradually rising production costs and
slowing investment in CBM exploration and
development have created a large gap between
the production and use of CBM. In some regions,
CBM does not have open and fair access to
natural gas pipelines, and the transmission and
distribution facilities of some CBM projects are
inadequate. The large number of potentially
dangerous mines in China increases the difficulty
of extracting gas. In addition, the gas extracted
from coal mines is of low concentration and very
difficult to use. China therefore needs to make
vigorous efforts to address these challenges during the 13th Five-Year Plan (2016–20).
2.8 Steadily Promote Energy
Development in the Belt
and Road Initiative
In September and October 2013, during his visits
to Kazakhstan and Indonesia, President Xi Jinping proposed building the Silk Road Economic
Belt and the 21st Century Maritime Silk Road,
which together form the Belt and Road Initiative
(BRI).
Energy cooperation is an important part of the
BRI, which connects energy consumption markets in Europe and Asia with major energy
exporters in the Middle East, Central Asia and
Russia. The BRI covers two high-quality fossil
energy-rich regions—Russia-Central Asia and
the Persian or Arabian Gulf—as well as Western
Europe, which has advanced energy technologies
and widely deployed green energy. Building the
BRI with other countries can promote stability in
the energy market in Eurasia and drive the transition to green energy.
In March 2016, the Outline of the 13th
Five-Year Plan (2016–20) for the National Economic and Social Development of the People’s
Republic of China was published. The BRI was
included in the Five-Year Plan because it is an
important means to coordinate regional development in China and it opens up and actively
involves China in global governance.
The 13th Five-Year Plan (2016–20) for the
Development of the Energy Industry states that
China will: (i) take the domestic and the international markets into consideration and use all
available resources to implement its energy
cooperation strategy; (ii) seize the major opportunities of the BRI to interconnect energy
infrastructure, expand international cooperation
Special Report 4: China’s Energy System Revolution
419
(CBM) Development and Use. The 3rd
Five-Year Plan (1966–70) for the CBM sector is
the guideline for China’s exploration and use of
CBM during the 13th Five-Year Plan. The 13th
Five-Year Plan is the decisive stage in building a
moderately prosperous society in all respects and
a critical period for adjusting the energy system
towards diversified energy supply and clean
energy. The CBM sector faces both opportunities
and challenges, but the opportunities tend to
outweigh the challenges.
On the one hand, the external environment is
generally favourable. China has implemented the
necessary energy supply structural reforms to:
(i) increase the share of non-fossil energy and
natural gas in total energy production and
demand; (ii) raise the share of natural gas in total
primary energy demand to 10%; and (iii) encourage the development of CBM. China has
also implemented an innovation strategy and
accelerated the local development of critical
technologies and equipment. As a result, the
technological bottlenecks constraining CBM
development are expected to disappear. As China
introduces increasingly strict requirements for
safety in coal mines, the safe extraction of coalmine gas is a fundamental means to prevent gas
explosions. China has made a solemn commitment to the international community to decrease
CO 2 emissions per unit of GDP by 40–45% by
2020, and that CO 2 emissions will peak around
2030. These factors bring a hard-won opportunity for the rapid development of the CBM
sector.
On the other hand, the sector still has some
challenges that need to be addressed urgently.
CBM is still in its infancy. The size of the market
is small and competition is weak. In recent years,
the price of CBM has dropped significantly due
to the adjustment of natural gas prices, which
offsets the positive effects of subsidies. Moreover, gradually rising production costs and
slowing investment in CBM exploration and
development have created a large gap between
the production and use of CBM. In some regions,
CBM does not have open and fair access to
natural gas pipelines, and the transmission and
distribution facilities of some CBM projects are
inadequate. The large number of potentially
dangerous mines in China increases the difficulty
of extracting gas. In addition, the gas extracted
from coal mines is of low concentration and very
difficult to use. China therefore needs to make
vigorous efforts to address these challenges during the 13th Five-Year Plan (2016–20).
2.8 Steadily Promote Energy
Development in the Belt
and Road Initiative
In September and October 2013, during his visits
to Kazakhstan and Indonesia, President Xi Jinping proposed building the Silk Road Economic
Belt and the 21st Century Maritime Silk Road,
which together form the Belt and Road Initiative
(BRI).
Energy cooperation is an important part of the
BRI, which connects energy consumption markets in Europe and Asia with major energy
exporters in the Middle East, Central Asia and
Russia. The BRI covers two high-quality fossil
energy-rich regions—Russia-Central Asia and
the Persian or Arabian Gulf—as well as Western
Europe, which has advanced energy technologies
and widely deployed green energy. Building the
BRI with other countries can promote stability in
the energy market in Eurasia and drive the transition to green energy.
In March 2016, the Outline of the 13th
Five-Year Plan (2016–20) for the National Economic and Social Development of the People’s
Republic of China was published. The BRI was
included in the Five-Year Plan because it is an
important means to coordinate regional development in China and it opens up and actively
involves China in global governance.
The 13th Five-Year Plan (2016–20) for the
Development of the Energy Industry states that
China will: (i) take the domestic and the international markets into consideration and use all
available resources to implement its energy
cooperation strategy; (ii) seize the major opportunities of the BRI to interconnect energy
infrastructure, expand international cooperation
Special Report 4: China’s Energy System Revolution
419