managing national oil reserve bases, collection
and storage, rotation and use of strategic oil
reserves, and monitoring supply and demand in
international and domestic markets.
Natural gas reserves are used mainly to adjust
gas supply. China’s gas reserves have difficulty
meeting normal demand. Due to the small scale
of gas reserve storage facilities and absence of a
peak-shaving gas pricing mechanism, the
peak-shaving capability of gas reserves is below
international levels. At the end of 2014, the
increased production of residential gas and weak
downstream gas demand resulted in higher
inventories at several liquefied natural gas terminals, but there is still not enough space to store
more spot gas.
Coal reserves are not as crucial as oil reserves.
China has begun building an emergency coal
reserve system. Many provinces are building
emergency coal reserves, and large coal enterprises, utilities and ports already have emergency
coal reserves. Currently, China’s thermal power
plants consider a coal stock of 15 days to be
normal and of seven days to be a warning. The
thermal coal stock of a power generation company should not be less than 20 days. In terms of
administration, China’s emergency coal reserve
system is mainly the responsibility of the
National Development and Reform Commission
(NDRC), the Ministry of Finance and government departments for transport, railway and
energy. Organisations like the China National
Coal Association (CNCA) and State Grid provide coal market monitoring, early warning services and information support. The enterprises
responsible for emergency coal reserves build
dedicated storage facilities. Overall planning and
regulation of emergency coal reserves are carried
out by national government and specific task
fulfilment is the responsibility of enterprises and
ports.
In the event of a severe natural disaster or
emergency, the NDRC and the Ministry of
Finance make decisions on using reserves based
on applications from provincial governments or
suggestions from organisations like the CNCA or
State Grid. NDRC and the Ministry of Finance
then give the order to use the emergency reserves
to the relevant enterprises that hold the reserves.
Since normal production and operation are
ongoing, reserves are rotated so that used stocks
are replaced with new, and at least one rotation
per quarter takes place.
Enterprises that undertake coal emergency
reserve tasks can apply for bank loans, and the
national government can grant subsidies for
newly built reserve facilities and reconstruction
or expansion projects. For enterprises that have
fulfilled their emergency reserve tasks, the central finance department will pay interest on their
loans or on the capital they have invested in the
emergency reserves, as well as subsidise other
costs such as site occupancy and storage charges.
China’s energy emergency reserve system is
designed to respond to energy emergencies,
ensure secure and stable energy supply, and
make short-term decisions on energy security. At
the centre of emergency management is the
“inter-ministerial coordination mechanism for
ensuring coal, electricity, oil and transport security”. China’s energy emergency reserve system
is decentralised and short term, with the relevant
central enterprises performing the emergency
management function. First, the NDRC has the
largest say in energy emergency management
and also has administrative responsibility for
energy regulations. Second, the responsibilities
of the NEA include ensuring energy emergency
supply, managing oil reserves, guiding implementation of administrative measures by national
oil companies, and emergency management of
the power sector, which was previously the main
responsibility of the former SERC. Third, the
State Administration of Work Safety is responsible for leading production safety and emergency rescue work in key energy sectors, such as
coal and petrochemicals. In addition, the State
Administration of Science, Technology and
Industry for National Defence is responsible for
emergencies in nuclear power. The general
administration office and the energy authority of
local governments cooperate with the central
government in carrying out energy emergency
management. China’s energy emergency management has played an important role in
addressing energy emergencies, such as the 2008
Special Report 4: China’s Energy System Revolution
431
and storage, rotation and use of strategic oil
reserves, and monitoring supply and demand in
international and domestic markets.
Natural gas reserves are used mainly to adjust
gas supply. China’s gas reserves have difficulty
meeting normal demand. Due to the small scale
of gas reserve storage facilities and absence of a
peak-shaving gas pricing mechanism, the
peak-shaving capability of gas reserves is below
international levels. At the end of 2014, the
increased production of residential gas and weak
downstream gas demand resulted in higher
inventories at several liquefied natural gas terminals, but there is still not enough space to store
more spot gas.
Coal reserves are not as crucial as oil reserves.
China has begun building an emergency coal
reserve system. Many provinces are building
emergency coal reserves, and large coal enterprises, utilities and ports already have emergency
coal reserves. Currently, China’s thermal power
plants consider a coal stock of 15 days to be
normal and of seven days to be a warning. The
thermal coal stock of a power generation company should not be less than 20 days. In terms of
administration, China’s emergency coal reserve
system is mainly the responsibility of the
National Development and Reform Commission
(NDRC), the Ministry of Finance and government departments for transport, railway and
energy. Organisations like the China National
Coal Association (CNCA) and State Grid provide coal market monitoring, early warning services and information support. The enterprises
responsible for emergency coal reserves build
dedicated storage facilities. Overall planning and
regulation of emergency coal reserves are carried
out by national government and specific task
fulfilment is the responsibility of enterprises and
ports.
In the event of a severe natural disaster or
emergency, the NDRC and the Ministry of
Finance make decisions on using reserves based
on applications from provincial governments or
suggestions from organisations like the CNCA or
State Grid. NDRC and the Ministry of Finance
then give the order to use the emergency reserves
to the relevant enterprises that hold the reserves.
Since normal production and operation are
ongoing, reserves are rotated so that used stocks
are replaced with new, and at least one rotation
per quarter takes place.
Enterprises that undertake coal emergency
reserve tasks can apply for bank loans, and the
national government can grant subsidies for
newly built reserve facilities and reconstruction
or expansion projects. For enterprises that have
fulfilled their emergency reserve tasks, the central finance department will pay interest on their
loans or on the capital they have invested in the
emergency reserves, as well as subsidise other
costs such as site occupancy and storage charges.
China’s energy emergency reserve system is
designed to respond to energy emergencies,
ensure secure and stable energy supply, and
make short-term decisions on energy security. At
the centre of emergency management is the
“inter-ministerial coordination mechanism for
ensuring coal, electricity, oil and transport security”. China’s energy emergency reserve system
is decentralised and short term, with the relevant
central enterprises performing the emergency
management function. First, the NDRC has the
largest say in energy emergency management
and also has administrative responsibility for
energy regulations. Second, the responsibilities
of the NEA include ensuring energy emergency
supply, managing oil reserves, guiding implementation of administrative measures by national
oil companies, and emergency management of
the power sector, which was previously the main
responsibility of the former SERC. Third, the
State Administration of Work Safety is responsible for leading production safety and emergency rescue work in key energy sectors, such as
coal and petrochemicals. In addition, the State
Administration of Science, Technology and
Industry for National Defence is responsible for
emergencies in nuclear power. The general
administration office and the energy authority of
local governments cooperate with the central
government in carrying out energy emergency
management. China’s energy emergency management has played an important role in
addressing energy emergencies, such as the 2008
Special Report 4: China’s Energy System Revolution
431