By Bian Siying, China Huanqiu Contracting & Engineering Co., Ltd.
Zhang Wei, Kunlun Digital Technology Co., Ltd.
China's economic situation in 2022: Overcoming various unfavorable factors and maintaining economic growth
According to the Statistical Communiqué of the People's Republic of China on the 2022 National Economic and Social Development, China in 2022 took both domestic and international situations into consideration, coordinated pandemic prevention and control, and economic and social development, coordinated development and security, responded to unexpected impacts, and maintained economic growth. According to preliminary calculations, the annual GDP was RMB121 020.7 billion, up by 3.0% over the previous year. Of the total, the added value of the primary industry was RMB8 834.5 billion, up by 4.1% over the previous year; that of the secondary industry was RMB48 316.4 billion, up by 3.8%; that of the tertiary industry was RMB63 869.8 billion, up by 2.3%. The added value of the primary industry accounted for 7.3% of the GDP, that of the secondary industry accounted for 39.9%, and that of the tertiary industry accounted for 52.8%.
Analysis of the current situation of China's energy structure
In recent years, China's energy structure was constantly optimized. Especially after the development of the 13th Five-Year Plan (2016-2020), the energy industry has shown strong supply elasticity and consumption resilience, taking a solid step forward energy security, powerful energy country and energy transformation.
1. Constant optimization of energy structure
The low-carbon trend of energy consumption remains unchanged, and the green and low-carbon transformation is developing in depth. Of China's primary energy consumption in 2022, coal accounted for 56.4%, oil accounted for 17.7%, natural gas accounted for 8.7%, and non-fossil energy accounted for 17.2%. From the perspective of energy consumption structure, coal remained stable in general, with an increase of about 0.4 percentage points, oil decreased by 0.8 percentage points year-on-year, the proportion of natural gas did not vary much, and non-fossil energy increased by 0.6 percentage points. Firstly, in terms of oil consumption, on the one hand, in the context of the Russia-Ukraine conflict, international oil prices soared and had off-normal violation, in the meantime, pandemic repeatedly broke out, and the penetration of new energy vehicles continued to increase rapidly, which inhibited the growth of domestic refined oil consumption. On the other hand, with the concentrated release of domestic growth stabilization policies, domestic demand for petrochemical products recovered to a certain extent, and the annual growth rate of oil consumption fell by about 2.0% year-on-year. Secondly, in terms of natural gas consumption, with the moderate advancement of natural gas infrastructure investment and construction projects, the development of China's natural gas industry was generally stable, of which gas consumption in cities increased steadily, gas consumption in chemical fertilizer expanded slightly, gas consumption in commercial service decreased due to the pandemic, and gas consumption in industrial and power generation had an obvious fall due to the rising price of natural gas. Generally, overall natural gas consumption of the whole year was basically the same as last year. Thirdly, in terms of coal consumption, the demand of thermal coal was increased due to the abnormal climate, severe high temperature and drought in many parts of China. Coal, as an anchor, played an increasingly important role, and the production and sales of coal-to-oil, coal-to-gas, coal-to-olefin and other coal chemical products was booming, and the capacity utilization rate increased year-on-year. On the whole, the demand for coal continues to linger at a high level, with sufficient quantities, stable price and good supply. The annual coal consumption increased by about 3.2% year-on-year. Finally, in terms of non-fossil energy, the annual consumption growth reached 6.0%, mainly from solar energy, wind energy and hydropower, all of which contributed about 80% of the increase in non-fossil energy.
2. The supply of non-fossil energy exceeded 900 million tons of standard coal
The development of China's non-fossil energy made new achievements. In 2022, the supply of China's non-fossil energy exceeded 900 million tons of standard coal, reaching 910 million tons of standard coal, a year-on-year increase of 6.0%, and the growth rate was about 3 percentage points higher than that of fossil energy. Among them, non-hydro renewable energy (hereinafter referred to as new energy) was 390 million tons of standard coal, hydropower was 410 million tons of standard coal, nuclear energy was 120 million tons of standard coal, and new energy maintained a medium-to-high growth rate. China is vigorously building a new energy supply and consumption system based on large-scale wind and solar bases, supported by clean, efficient, advanced and energy-saving coal power, and carried by stable, safe and reliable UHV power transmission and transformation lines. Efforts have been made to actively develop new models of new energy industries, promote the comprehensive utilization of nuclear energy, accelerate the demonstration of non-grain biofuel ethanol industry, carry out demonstrations of hydrogen production from renewable energy according to local conditions, and explore the development route and commercial application path of hydrogen energy technology.
The development of wind and solar still faces the challenges of regional imbalance between resource consumption and supply, and insufficient consumption capacity. According to the data of the National New Energy Consumption Monitoring and Early Warning Center, the photovoltaic utilization rate in key areas such as Qinghai, Tibet, and Inner Mongolia Province has been lower than the national average for a long time. Among them, the annual photovoltaic utilization rate in Tibet is about 82%, far lower than the national 98%. On the other hand, the development of energy storage has stepped into the accelerated stage, but it is still insufficient. In 2022, the world's first non-supplementary combustion compressed air energy storage power station was completed and put into operation in Jiangsu Province, and the 100 MWh user-oriented gravity energy storage demonstration project in Rudong country, Nantong City Jiangsu Province started construction. The energy storage technology continued to be enriched. As more than 20 provinces and regions clarify the requirements for new energy distribution and energy storage, the construction of energy storage facilities will enter a period of accelerated development along with the construction of wind and solar bases.
Prospects for the transformation direction of China's energy
1. The state has issued a series of energy policies
In 2022, the Chinese government issued a series of policies, mainly including: The 14th Five-Year Plan on Modern Energy System Planning, The 14th Five-Year Plan for Scientific and Technological Innovation in the Energy Field, Guiding Opinions on Promoting the High-speed Development of the Petrochemical and Chemical Industry during the 14th Five-Year Plan, Medium and Long-Term Plan for Hydrogen Energy Industry Development (2021-2035), etc. The policies attracted domestic and foreign industries attention, and will have a profound impact on China's energy transformation. Innovation is the primary driving force leading energy development. The energy technology revolution should be accelerated to support and lead the high-quality development of energy.
(1) The 14th Five-Year Plan on Modern Energy System Planning
The plan clarifies the main goals of the construction of a modern energy system during the 14th Five-Year Plan Period (2021-2025):
First, energy security will be more secure and powerful. By 2025, the annual comprehensive production capacity of domestic energy will reach more than 4.6 billion tons of standard coal, the annual output of crude oil will rebound and stabilize at 200 million tons, the annual output of natural gas will reach more than 230 billion cubic meters, and the total installed capacity of power generation will reach about 3 billion kilowatts. The energy reserve system will be further improved, and the self-supply capacity of energy will be further enhanced.
Second, the low-carbon transformation of energy will achieve remarkable results. Carbon dioxide emissions per unit of GDP have dropped by 18% over the past five years. By 2025, the proportion of non-fossil energy consumption will increase to about 20%, the proportion of non-fossil energy power generation will reach about 39%, the electrification will continue to increase, and the proportion of electric energy in terminal energy consumption will reach about 30%.
Third, the efficiency of the energy system will be greatly improved. Remarkable results will be achieved in energy conservation and consumption reduction, with energy consumption per unit of GDP decreasing by 13.5% in five years.
(2) The 14th Five-Year Plan for Scientific and Technological Innovation in the Energy Field
The plan puts forward the development goal: to basically achieve breakthroughs in the existing major weak technologies and equipment in the energy field. Forward-looking and disruptive energy technologies will be rapidly emerging, and new business forms and models continue to emerge, forming a number of new advantageous technologies. The energy technology innovation system will be further improved. The innovation of energy technology will strongly support and lead the high-quality development of the energy industry.
In the field of oil and gas, efforts should be made to promote the clean, low-carbon and efficient development and utilization of fossil energy. Major breakthroughs in oil and gas development technologies such as "two deep and one unconventional"(deep structure, deep sea and unconventional field), enhanced oil recovery in mature fields will strongly support the stable and increased production of oil and gas and the construction of a production, supply, storage and marketing system. Maintaining international leading position in green and intelligent coal mining, clean and efficient transformation, and advanced coal-fired power generation technology, making good use of coal.
(3) Guiding Opinions on Promoting the High-speed Development of the Petrochemical and Chemical Industry during the 14th Five-Year Plan
The document puts forward development goals: by 2025, the petrochemical industry will basically form a high-quality development pattern with strong independent innovation capabilities, reasonable structure and layout, green, safe and low-carbon development, the support capacity of high-end products will be greatly improved, the core competitiveness will be significantly enhanced, and self-independence and self-improvement in top level will take solid steps.
In terms of industrial structure, the concentration of bulk chemical products production will be further improved, and the capacity utilization will reach more than 80%; the guarantee level of equivalent of ethylene will be greatly improved, and the guarantee level of new chemical materials will reach more than 75%.
2. Development of China's energy transformation
(1) Strengthen energy strategy security guarantee
In accordance with The 14th Five-Year Plan on Modern Energy System Planning to strengthen strategic security guarantees.
Enhance oil and gas supply capacity. Intensify domestic oil and gas exploration and development, uphold the the combination of conventional and unconventional methods, pay equal attention to land and sea, strengthen the basic geological survey and exploration of oil and gas in key basins and sea areas, and consolidate the foundation of resource continuity. Accelerate the production of reserves, gradually decrease the volume of developed oil fields and enhance recovery, promote stable production of mature oil and gas fields, increase production capacity construction in new areas, and ensure continuous stable and increased production. Actively expand the exploration and development of unconventional resources, and accelerate the development of shale oil, shale gas and coalbed methane. Oil production will be rising steadily, striving to rise to 200 million tons in 2022 and maintaining long-time stable production. Natural gas production will be growing rapidly, striving to reach more than 230 billion cubic meters in 2025.
(2) Vigorously develop non-fossil energy
Accelerate the development of wind and solar power. Comprehensively promote the large-scale and high-quality development of wind and solar power generation, give priority to local development and utilization, accelerate the construction of distributed wind power and distributed photovoltaics in load centers and surrounding areas, and promote the application of wind power technology in low wind speed. Orderly promote the centralized development of wind power and photovoltaic power generation in areas with good wind and solar resource, superior construction conditions, continuous development conditions, and requested regional ecological and environmental protection, accelerate the construction of large-scale wind power photovoltaic base projects focusing on desert, Gobi and desert areas, and actively promote the construction of multi-energy complementary clean energy bases in the upstream of the Yellow River, Xinjiang, and northern Hebei. Actively promote the development and utilization of rooftop photovoltaics in industrial parks and economic development zones, and promote the photovoltaic power generation and building integrated photovoltaic. Carry out the demonstration of hydrogen production by wind power and photovoltaic power generation. Encourage the construction of offshore wind power bases, and promote the deployment of offshore wind power to deep-water and far-shore areas. Actively develop solar thermal power generation.
(3) Accelerate the large-scale application of new energy storage technologies
Vigorously promote the development of power-side energy storage, rationally allocate the scale of energy storage, improve the output characteristics of new energy stations, and support the rational allocation of energy storage systems for distributed new energy. Optimize the layout of grid-side energy storage, and play multiple roles such as energy storage and consumption of new energy, load shifting, enhancement of grid stability, and emergency power supply. Actively support the diversified development of user-side energy storage, improve the reliability of power supply in user side, and encourage electric vehicles users, uninterruptible power supply users, etc to store energy to participate in system peak regulation and frequency regulation. Broaden the application scenarios of energy storage, promote the diversified application of technologies such as electrochemical energy storage, cascade power station energy storage, compressed air energy storage, and flywheel energy storage, and explore new models and business forms such as aggregated utilization and shared utilization of energy storage.
(4) Implement energy-saving and carbon-reducing actions in key industries
Strengthen energy conservation and energy efficiency improvement in the industrial field, in-depth implement energy conservation monitoring and energy conservation diagnosis, promote energy conservation and low-carbon process technology and equipment, promote energy conservation transformation in key industries, accelerate the formulation and revision of industrial energy conservation and green manufacturing standards, and carry out energy efficiency benchmarking and energy efficiency leadership action, promote green manufacturing. Build a green and low-carbon transportation system, optimize and adjust the transportation structure, vigorously develop multimodal transport, promote the "road-to-rail" and "road-to-water" transportation of bulk cargo in the middle and long distance, and encourage heavy-duty trucks and ships to use LNG and other clean fuels instead, strengthen the guarantee of clean energy supply in the transportation industry.
(5) Improve low-carbon electrification of end-use energy
Comprehensively and deeply expand the substitution of electric energy, expand the application of electric boilers, electric kilns, and electric power in industrial production, and strengthen the connection of the replacement of backward production capacity. Promote new electric heating equipment such as air source heat pumps, water source heat pumps, and thermal storage electric boilers according to local conditions. Actively promote the application of new energy vehicles in urban public transportation and other fields. By 2025, new energy vehicle sales will account for about 20%. Optimize the layout of charging infrastructure, comprehensively promote the coordinated development of vehicle piles, promote the two-way interaction of energy and information between electric vehicles and smart grids, and carry out pilot demonstrations of new charging and swapping stations that combine light, storage, charging, and switching.
(6) Make overall plans to improve regional energy development
Promote the green and efficient development of the clean energy base in western China. Promote the green mining, clean and efficient utilization of coal and oil and gas in resource-rich areas such as the Yellow River Basin and Xinjiang Province, and reasonably control the intensity and scale of coal development in the Yellow River Basin. Focusing on the upstream the Yangtze River Economic Belt including Sichuan, Yunnan, and Tibet, adhere to ecological priority, optimize the layout of large-scale hydropower development, and promote the construction of hydropower projects for west-to-east power transmission. Actively promote the construction of multi-energy complementary clean energy bases, scientifically optimize the ratio of power supply scale, use of existing conventional power sources first to implement multi-energy complementary projects such as "wind, solar and water (storage)", "wind solar and coal(storage)", and vigorously develop wind power and solar energy power generation and other new energy, maximize the use of renewable energy. During the 14th Five-Year Plan period (2021-2025), the annual comprehensive production capacity of the clean energy base in western China will increase by more than 350 million tons of standard coal.
Improve the development of clean and low-carbon energy in the eastern and central regions. Focusing on the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, etc., give full play to regional comparative advantages, accelerate the adjustment of energy structure, and carry out demonstrations of green transformation of energy production and consumption. Promote the construction of nuclear power projects in coastal areas in a safe and orderly manner, coordinate and promote the large-scale development of offshore wind power, and actively develop new energy sources such as wind energy, solar energy, biomass energy, and geothermal energy. Vigorously develop the integration of source, network, load and storage. Strengthen the supply of clean energy such as electricity natural gas, etc., and steadily expand the scale of imports from outside the region. Strictly control coal consumption in key areas for air pollution prevention and control, and optimize the production capacity structure on the basis of strictly controlling the scale of oil refining production capacity. During the 14th Five-Year Plan period (2021-2025), the annual production capacity of non-fossil energy in the eastern and central regions will increase by more than 150 million tons of standard coal.
