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China: Energy conservation to top government agenda

The government has given energy conservation top priority in its long-term energy policy, as the country has been feeling the pinch of energy supply shortages since last year.

The new philosophy represents a distinct shift from a previous focus solely on energy exploitation.

The transformation, however, will be a decade-long and challenging campaign which requires an overhaul of the whole economic structure, huge investment in upgrading oil refineries and power plants, and cultivation of energy-saving habits, experts said.

Last week, the State Council approved a draft of China's energy development programme for 2004-2020. It is China's first long-term energy policy in almost half of a century.

Remarkably, the programme lists energy conservation as its first concern, along with other principles such as optimization of the energy consumption mix, promotion of environmental protection, and protection of energy security.

"The mode of economic growth should be transformed. Efforts should be made to foster an energy conservation-minded economy and society," Xinhua News Agency quoted the State Council as saying.

Experts said the idea of energy conservation, which was initiated long ago, used to be more symbolic than a serious consideration of the matter.

"Now, the government has reached consensus following the current energy shortfall," said Hu Jie, an engineer with a research institution of the China National Petroleum Corp. "It will not be sustainable to rely on heavy energy consumption to drive the economy."

China at present is suffering from the most serious energy crunch since the late 1980s.

Two-thirds of the nation's area has been afflicted with brownouts and regular blackouts since last year. Supply failure is attributed to insufficient construction of new plants in past years, and rampant consumption rises in energy-intensive industries such as steel, aluminium, cement and chemicals.

The electricity shortfall has triggered a chain reaction in the supply of coal and oil: the coal stockpile dropped to a two-decade low in April, while crude oil imports rose by a record 59 per cent year-on-year in May.

Government officials started to worry that the energy shortage and increasing imports would become a bottleneck hindering economic growth and a threat to the environment and to national security.

Experts said China has great potential to improve the efficiency of energy consumption to alleviate the impact of the energy supply shortfall.

According to a report by the State Council's Development and Research Centre, China spends 13 per cent of its GDP on energy consumption, almost double the level in the United States.

As an important move for energy conservation, Ni Weidou, a thermal engineering professor with the Chinese Academy of Engineering, said China should optimize the economic structure, relying less on energy-intensive industries such as steel and aluminium.

"There should be a balance between industrialization and energy consumption," said Ni.

Meanwhile, new investment should be poured to improve the consumption efficiency in power generation, transportation and housing.

The coal consumption per kilowatthour in Chinese power plants is 22 per cent more than that in the Untied States, according to Ni.

In the booming housing sector, for instance, only 2.5-5 per cent of new housing meets energy conservation standards.

The Development Research Centre's report said China could decrease its energy consumption from 3.2 billion tons of coal equivalent to 2.4 billion tons in 2020, should effective energy-saving approaches be taken.

The challenge, however, is that there is a lack of economic incentives and legal systems to make energy conservation efforts rewarding, experts said.

For example, the cost saved by increasing the coal consumption efficiency may not justify a huge investment in energy-saving facilities, said Ni.

And education in energy-conservation consciousness is ever difficult.

"It is not an overnight strike, but long-term hard work," said Hu.

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