fair access is difficult. National oil companies
still monopolise investment and construction of
the pipeline network, while bundling and
intra-company transactions continue in gas
transmission, distribution and sales. In some
regions there are still pipeline monopolies.
4.2.5 Incomplete Legislative System
China’s energy legislation system is incomplete,
as evidenced by the lack of a fundamental energy
law, the delayed adoption and revision of other
laws, and the incomplete scope and poor operability of the system. Provisions are spread
across laws, administrative regulations, regional
regulations and departmental rules, with varying
degrees of enforcement. Due to the lack of consistent legislative guidelines and fundamental
principles, the links between specific regulations
at different administrative levels are absent.
Some departments legislate regulations for the
benefit of the department itself. Other notable
concerns include an excessive reliance on
administrative enforcement and inadequate punishment for infringements.
China is now confronted with severe resource
and environmental constraints, pressure to reduce
greenhouse gas emissions, and the challenges of
maintaining energy security and driving the
energy technology revolution. China’s initiative
to combat climate change requires that its carbon
emissions peak around 2030. While energy
consumption will still rise in the future, the
abundant clean energy resources of hydro, wind
and solar have not been exploited effectively.
This suggests there is huge scope for adjustment
in the energy system. The dependence of oil and
gas on imports is 70% and 40% respectively, and
China is the largest importer of oil and gas from
the Middle East, making energy security a challenge. The development of emerging technologies like the Energy Internet will radically
change the industry. This will force the government to change its regulatory and administrative
practices, and drive innovation in industrial
organisation and government administration,
which in turn will set new demands on the
energy revolution.
In brief, to solve the above issues and address
emerging situations and challenges, it is necessary to transform China’s energy system
urgently. In this critical window, when international energy prices are low, China will waste no
time in initiating its energy system revolution,
based on the consensus of all stakeholders.
4.3 System Design for China’s Energy
System Revolution (2030)
4.3.1 Guiding Ideas
In the spirit of the 18th and 16th National Congress of the Communist Party of China in 2012
and 2002 respectively, China should embark on
its energy system revolution with the goal of
building an ecological civilisation. This should
focus on accelerating energy transition in line
with the development concepts of “Innovation,
Coordination, Green, Openness and Sharing”.
The market should play a decisive role in
resource allocation, while the government should
carry out its administrative and regulatory roles
better in order to break down the barriers to
energy sustainability and shape a modern, open,
complete and competitive energy system. Such a
system will prioritise renewables and gas, ensure
the well-coordinated development of centralised
and distributed energy, soundly balance supply
and demand, and improve energy efficiency, all
for the benefit of the national economy, people’s
livelihoods and the environment.
4.3.2 Fundamental Principles
(1) Market orientation
Taking into account industry characteristics and
laws, China will distinguish between areas of
natural monopoly and areas of competition and
give participants equal access to the market.
Efforts will be channelled towards creating an
Special Report 4: China’s Energy System Revolution
451
still monopolise investment and construction of
the pipeline network, while bundling and
intra-company transactions continue in gas
transmission, distribution and sales. In some
regions there are still pipeline monopolies.
4.2.5 Incomplete Legislative System
China’s energy legislation system is incomplete,
as evidenced by the lack of a fundamental energy
law, the delayed adoption and revision of other
laws, and the incomplete scope and poor operability of the system. Provisions are spread
across laws, administrative regulations, regional
regulations and departmental rules, with varying
degrees of enforcement. Due to the lack of consistent legislative guidelines and fundamental
principles, the links between specific regulations
at different administrative levels are absent.
Some departments legislate regulations for the
benefit of the department itself. Other notable
concerns include an excessive reliance on
administrative enforcement and inadequate punishment for infringements.
China is now confronted with severe resource
and environmental constraints, pressure to reduce
greenhouse gas emissions, and the challenges of
maintaining energy security and driving the
energy technology revolution. China’s initiative
to combat climate change requires that its carbon
emissions peak around 2030. While energy
consumption will still rise in the future, the
abundant clean energy resources of hydro, wind
and solar have not been exploited effectively.
This suggests there is huge scope for adjustment
in the energy system. The dependence of oil and
gas on imports is 70% and 40% respectively, and
China is the largest importer of oil and gas from
the Middle East, making energy security a challenge. The development of emerging technologies like the Energy Internet will radically
change the industry. This will force the government to change its regulatory and administrative
practices, and drive innovation in industrial
organisation and government administration,
which in turn will set new demands on the
energy revolution.
In brief, to solve the above issues and address
emerging situations and challenges, it is necessary to transform China’s energy system
urgently. In this critical window, when international energy prices are low, China will waste no
time in initiating its energy system revolution,
based on the consensus of all stakeholders.
4.3 System Design for China’s Energy
System Revolution (2030)
4.3.1 Guiding Ideas
In the spirit of the 18th and 16th National Congress of the Communist Party of China in 2012
and 2002 respectively, China should embark on
its energy system revolution with the goal of
building an ecological civilisation. This should
focus on accelerating energy transition in line
with the development concepts of “Innovation,
Coordination, Green, Openness and Sharing”.
The market should play a decisive role in
resource allocation, while the government should
carry out its administrative and regulatory roles
better in order to break down the barriers to
energy sustainability and shape a modern, open,
complete and competitive energy system. Such a
system will prioritise renewables and gas, ensure
the well-coordinated development of centralised
and distributed energy, soundly balance supply
and demand, and improve energy efficiency, all
for the benefit of the national economy, people’s
livelihoods and the environment.
4.3.2 Fundamental Principles
(1) Market orientation
Taking into account industry characteristics and
laws, China will distinguish between areas of
natural monopoly and areas of competition and
give participants equal access to the market.
Efforts will be channelled towards creating an
Special Report 4: China’s Energy System Revolution
451