Zhang Yusheng, deputy director of the Energy Industry Development Department of China International Engineering Consulting Corporation, expressed in an interview that from the energy supply situation in recent years, it can be seen that it is becoming increasingly difficult to continuously increase coal and oil production and imports to ensure stable energy supply. It is necessary to take the path of transforming the energy development mode as a new way to ensure energy supply, and this process also brings many investment opportunities. Zhang Yusheng believes that in the next five years, there will be significant investment opportunities in several areas including coalbed methane and coal mine gas development and utilization, comprehensive utilization of coal slime and coal gangue, rural renewable energy construction, energy circulation and storage, independent research and development of major energy technologies, and international energy cooperation.
Reporter: How do you view the continuously rising energy consumption in recent years? Facing international pressure and domestic transformation needs, the National Energy Administration recently proposed a total energy consumption control plan. What do you think of this policy?
Zhang Yusheng: Since the beginning of the new century, China's energy consumption has continued to increase. In 2010, China's energy consumption reached 3.25 billion tons of standard coal, an increase of 123% compared to 2000, with an average annual growth rate of 8.3%. This is mainly because China is in a stage of "dual acceleration" in industrialization and urbanization. Driven by infrastructure construction and industrial demand, industries characterized by raw material production and primary processing, such as chemicals, metallurgy, metal products, and power, have developed at an unprecedented pace, leading to massive consumption of energy resources. The development history of developed countries shows that the massive consumption of steel, cement, and fossil energy during the mid-stage of industrialization is a law of economic development, unless new basic raw materials and new energy can be found to replace steel, cement, and fossil energy.
Due to the accelerated expansion of high-energy-consuming industries such as steel, cement, electrolytic aluminum, and calcium carbide in recent years, energy consumption intensity remains high. At exchange rates, China's energy intensity in 2010 was 0.77 tons of standard oil per thousand US dollars, 2.5 times the world average (0.31), 4.3 times that of the United States (0.18), and 7.7 times that of Japan (0.10). Currently, China's energy consumption and carbon dioxide emissions have both become the largest in the world. The contradiction between the rapid growth of energy consumption and economic development, environmental protection, and climate change has become increasingly prominent, and international environmental protection pressure is unprecedented. In 2010, the Chinese government solemnly committed to reaching 15% non-fossil energy in primary energy consumption by 2020, and reducing carbon dioxide emissions per unit of GDP by 40%-45% compared to 2005. To achieve these two goals, during the "12th Five-Year Plan" period, efforts will be made to accelerate the transformation of economic development mode, rationally control total energy consumption, and reduce energy consumption intensity; at the same time, it is necessary to further accelerate energy structure adjustment and increase the proportion of high-quality and clean energy.
Reporter: From the perspective of supply, what do you think is the current state of China's energy supply?
Zhang Yusheng: China is a country rich in coal, poor in oil, and low in gas, with abundant coal resources, complete varieties, and wide distribution, while proven reserves of oil and natural gas are severely insufficient. China's total proven conventional energy reserves are about 830 million tons of standard coal, with remaining recoverable reserves of about 160 million tons of standard coal, accounting for about 10% of the world total. China's energy resources are relatively abundant, but per capita possession is less than half of the world average, and oil is only one-tenth. Due to domestic resource constraints, China needs to use both international and domestic markets and resources to ensure energy supply, especially oil and gas resource supply. The stability of the international oil and gas market has an increasing impact on China's energy security, economic security, and even national security. In 2010, oil production was 203 million tons, natural gas was 94.85 billion cubic meters, and imports were 295 million tons and 16.35 billion cubic meters respectively, with oil supply dependence on foreign sources exceeding 50%. Coal, as China's main energy source, accounts for more than 70% of China's energy structure. However, due to the gradual depletion of coal resources in the east, the intensifying reverse distribution of resources and consumption, and the bottleneck of railway transportation that has not been fundamentally resolved, regional and temporal coal supply shortages occur every year during peak summer or when encountering rain, snow, and ice disasters, indicating poor stable coal supply capacity. In 2010, coal production was 3.24 billion tons, and imports reached a historical high of 165 million tons.
From the energy supply situation in recent years, it can be seen that it is becoming increasingly difficult to continuously increase coal and oil production and imports to ensure stable energy supply. It is necessary to take the path of transforming the energy development mode as a new way to ensure energy supply.
Reporter: Energy issues are related to the overall economic situation. What insights do you have on energy structure adjustment?
Zhang Yusheng: The current world energy system has shifted from the coal era to the oil and gas era. In 2010, oil and natural gas accounted for more than 60% of primary energy consumption, coal for 29.6%, and nuclear energy and hydropower each accounted for about 6%, showing a clear trend of diversified energy supply. However, China has long maintained a coal-based energy consumption structure. In 2010, coal consumption accounted for 70.9% of primary energy consumption, more than 40 percentage points higher than the world average. There are a series of problems in China's energy development, such as severe environmental pollution, large total carbon emissions, and low energy utilization efficiency, which bring huge pressure to China's future energy and even economic and social sustainable development. It is necessary to optimize and adjust the energy supply structure. On the eve of the Copenhagen Conference, China solemnly announced that non-fossil energy would reach about 15% of primary energy consumption by 2020. Vigorously developing clean energy has become the only way to adjust energy strategy, ensure energy security, protect the ecological environment, address climate change, and fulfill national commitments.
Reporter: From your energy consulting work this year, what has impressed you the most? Are there any new changes or trends worth paying attention to in 2011?
Zhang Yusheng: 2011 is the first year of the "12th Five-Year Plan." From the energy consulting work that year, the country has done a lot of work in the following areas: first, coal base construction and enterprise merger and reorganization; second, coal mine safety transformation and gas prevention and control; third, oil and gas exploration, storage, and pipeline construction; fourth, optimizing thermal power and grid construction; fifth, developing clean energy such as hydropower, wind power, and solar energy; and sixth, rural energy construction.
From the work in the above areas, it can be seen that the country's energy work has always implemented the spirit of the "12th Five-Year Plan" for national economic and social development, focusing more on the transformation of energy production and utilization modes, taking vigorous adjustment of energy structure as the main direction for transforming the energy development mode, rationally controlling total energy consumption as an important focus point for transforming the energy development mode, expanding international energy cooperation, strengthening scientific and technological innovation capabilities, and continuously promoting the construction of a safe, stable, and clean modern energy supply system to provide solid energy guarantees for building a moderately prosperous society in all respects.
Reporter: Where do you think investment opportunities in China's energy sector will mainly be reflected in the next five years?
Zhang Yusheng: During the "12th Five-Year Plan" period, China's national economy will maintain steady and accelerated development, industrialization and urbanization will be further accelerated, energy demand will continue to increase, and it is expected to reach 4.1 billion tons of standard coal by 2015, providing greater space for energy development. In the next five years, the country's energy development will adhere to the diversified and clean development path, promote the transformation of energy production and utilization modes, improve scientific and technological innovation capabilities, accelerate the optimization and upgrading of traditional industries, and promote the development of new energy and renewable energy. I believe there will be significant investment opportunities in several areas including coalbed methane and coal mine gas development and utilization, comprehensive utilization of coal slime and coal gangue, rural renewable energy construction, energy circulation and storage, independent research and development of major energy technologies, and international energy cooperation.
