Security, emissions top China’s energy priorities: NEA

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China's leading energy regulator has given a clearer idea of the energy priorities in the country's new five-year plan, with security and emissions targets identified as the top two areas.

The national energy administration (NEA) this week called for public comments on the energy elements of the 14th five-year plan, a key document that sets government policy direction for 2021-25.

The NEA lists seven topics in its call for comments, which closes on 30 November. First on the list is the need to guarantee energy security through diversifying supplies, developing sufficient storage capacity and infrastructure and improving logistics.

The second key area identified is green and low-carbon development, indicating that the five-year plan will support China's pledge to peak CO2 emissions before 2030. This could involve "market-based trading of the rights to use energy" and carbon emissions, it said.

The other energy priorities listed by the NEA are technology innovation, the construction of "smart" energy systems, market reforms, regional development and international co-operation.

But it is China's emissions targets, including president Xi Jinping's pledge to achieve "carbon neutrality" by 2060, that have the biggest potential to reshape China's energy strategy.

Government think-tank the Development Research Centre of the State Council (DRC) forecast in late October that China's energy total primary energy consumption growth should fall compared to 2019 to an average of 2.5pc/yr in the five-year plan period. Consumption should be "over" 5.5bn t of coal equivalent (tce) by 2025, it said, without being more specific.

The DRC expects cleaner energy sources like non-fossil fuels and natural gas to account for more than 30pc of China's energy mix by 2025, with oil holding largely steady at the current level of around 700mn t (14mn b/d), equivalent to 18pc of the total. Coal's share is expected to fall below 50pc.

China's total energy consumption was 4.86bn tce last year. Coal accounted for 57.7pc of this, with oil and gas at 18.9pc and 8.1pc respectively and the other 15.3pc coming from non-fossil fuels.

By 2030, China's primary energy supply should be fall by around 10pc from the projected 2025 level to about 5bn tce, with natural gas and non-fossil accounting for a 45pc share, the DCE said. It set targets for natural gas output at 280bn m³/yr, up by 60pc from 174bn m³ in 2019, and crude output at 4mn b/d, in line with current production. Older coal-fired power units should be eliminated and all existing capacity should be upgraded to ultra-low emission units, it said.

The DRC is also calling for China to build more oil storage facilities to take advantage of lower prices. Total crude storage capacity should be enough to cover more than 90 days of demand by 2030. This would be equivalent to around 1.4bn bl, based on apparent demand of 15.7mn b/d so far this year.

Gas storage capacity should be increased to 65bn m³, or 12pc of total forecast gas consumption by 2030, the DRC said.

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