Full Text: China's Energy Policy 2012

V. Promoting Clean Development of Fossil Energy

Worldwide, fossil energy, including coal and oil, will continue to play a dominant role in energy supply for a long time to come. China is no exception. Therefore, China will continue to plan fossil exploitation and utilization, with environmental protection taken into account. It will speed up the construction of advanced production capacity, eliminate outdated capacity, push forward the clean development of fossil energy, protect the ecological environment and cope with climate change, so as to attain the goal of energy conservation and emission reduction.

-- Developing the coal industry in a safe and highly efficient way. China sticks to the guideline of "scientific overall arrangement, intensive development, safe production, efficient utilization and environmental protection" in the development of the coal industry. Following the principle of "enforcing control in the eastern regions, maintaining stability in the central regions, and promoting development in the western regions," it will push ahead with the building of 14 large coal-mining bases, including the Shaanbei, Huanglong and Shendong coalfields. By means of integration of coal resources, and merger and reorganization of coal mining enterprises, the country will bring into being large coal mining conglomerates. Priority will be given to the development of large open-pit and super-large coal mines. It aims to enhance overall mechanization and safe production in coal mining through upgrading and reconstruction, and elimination of outdated production capacity. Vigorous efforts will be made to develop a circular economy in the mining areas, increase the washing and dressing rate of raw coal, and rationally develop associated resources. Following the approach of energy, technology and capital-intensive development with extensive industrial chain and high added value, the country will develop demonstration projects of upgraded downstream products in an orderly way. It will encourage the construction of projects for clean production, utilization, processing and conversion of low-calorific-value coal. It will strengthen environmental protection and ecological construction in the mining areas by way of comprehensive ecological management and land reclamation in mining-subsidence and other areas affected by coal-mining operations.

-- Spurring clean and highly efficient development of thermal power. Upholding the principle of low-carbon, clean and efficient development, China actively promotes green thermal power generation. It encourages coal-electricity integration, and steadily pushes forward the construction of large coal-fired power bases. It vigorously applies advanced technologies, including supercritical and ultra-supercritical power generation, in the construction of clean, highly efficient and environment-friendly coal-fired power generating sets and energy-saving power plants. It speeds up the elimination of small thermal power units marked by high energy consumption and heavy pollution. In order to strictly control pollutant emissions from coal-fired power plants, newly built coal-fired power generating sets must install dust-removing, desulfurization and denitration facilities, and the existing plants are asked to speed up their dust removal, desulfurization and denitration upgrading. It encourages the construction of thermoelectricity co-generation units in large- and medium-sized cities and industrial parks where thermal loads are relatively concentrated. It constructs combined-cycle gas-steam peak-load units and promotes heat-electricity-cooling co-generation with natural gas as fuel in accordance with local conditions. It has imposed strict restrictions on the construction of new coal-fired power generating sets in the Bohai Rim, Yangtze River Delta and Pearl River Delta areas, except those built for the purpose of "constructing large units and restricting small ones" and co-generation. Intensified efforts have been made to spread water-saving technology in thermal power plants. It develops the integrated gasification combined cycle power generation, and demonstration projects of carbon capture, utilization and storage.

-- Intensified efforts in prospecting and exploitation of conventional oil and gas resources. China will continue to implement the policy of "simultaneous development of oil and gas," with the target of stabilization in the east, acceleration in the west, development in the south and exploitation in the offshore areas. The country will steadily increase crude oil output and reserves by means of stepping up efforts in prospecting for and exploiting oil in major oil-production areas, including those in the Tarim and Ordos basins, and improving renovation for stable yields and increasing the recovery ratio in old oilfields. In its efforts to speed up the development of natural gas, the country will enhance the productivity and increase the output of natural gas in major gas fields in the central and western regions, push forward the development of offshore oil-gas fields, and gradually increase the proportion of natural gas in the primary energy structure. It will optimize the distribution of the refining industry, construct some large refining and chemical bases, and establish three major refining cluster areas in the Bohai Rim, Yangtze River Delta and Pearl River Delta, so as to realize upstream and downstream integration, refining and chemicals integration, and refining-reserve integrated management.

-- Actively promoting the development and utilization of non-conventional oil and gas resources. China's efforts to expedite the development of non-conventional oil and gas resources are an important way to enhance its security of energy supply. It will speed up the exploration and exploitation of coal-bed gas, increase the proven geological reserves, and push forward the construction of industrial bases in the Qinshui Basin and eastern edge of the Ordos Basin. In order to accelerate the development of shale gas, the country will select a group of prospective areas and favorable exploration target areas, intensify efforts to solve difficulties in core technology, set up a new development mechanism, implement incentive polices for the shale gas industry, and improve supporting facilities. China aims to increase its annual output of shale gas to 6.5 billion cu m by 2015, and lay a solid foundation for the future rapid development of shale gas. In addition, it will strengthen the development of shale oil, oil sand and other non-conventional oil and gas resources.

-- Enhancing the construction of energy storage and transportation facilities. When making a plan for the construction of energy output channels, China takes many factors into consideration, including target market, industrial restructuring, construction of plants that rely on coal, wind, nuclear energy, natural gas and pumped storage for electricity generation, imported energy resources, and bearing capacity of local water resources and the ecological environment. It will increase the cross-regional coal transport capacity through technological renovation of existing railway lines, construction of new coal-transport channels, and building of supporting piers. It will expand the scope of power transmission from western to eastern China and from northern to southern China, strengthen the building of regional power grids, improve the technology of ultra-high voltage transmission, and enhance the grids' ability to optimize resource allocation. The country will expedite the construction of networks of crude oil, product oil and natural gas pipelines, increase the proportion of oil and gas transported by pipelines, improve regional networks of oil and gas pipelines, and build large coastal loading and unloading stations. It will strictly enforce laws and regulations concerning the protection of oil and gas pipelines to ensure their safe operation. China will balance its resource reserves, both state reserves and commercial reserves, enhance its ability to extend emergency support, and improve the reserve system of crude oil, product oil, natural gas and coal. Efforts will also be made to enhance the peak-shaving ability of natural gas, and build and improve coal peak-shaving reserves.