No end in sight for severe energy shortages

PUBLISHED : Monday, 15 December, 2003, 12:00am
UPDATED : Monday, 15 December, 2003, 12:00am

A State Council report sees challenges in decades ahead, saying 60pc of the oil supply will have to be imported by 2020

The mainland will continue to face serious energy shortages in the next 20 years, according to a report by the State Council.

Xinhua quoted the report as saying oil consumption in the country had markedly increased in line with recent economic growth and a surge in people's incomes.

It predicted that when gross domestic product reaches US$10,000 per capita in 2020, oil consumption will reach 450 million tonnes, of which 60 per cent will need to be imported.

'The report by the State Council Development Research Centre shows that China's energy sector will face a series of challenges in the coming 20 years,' Xinhua said.

An earlier Xinhua report said the mainland had already become the largest consumer of coal and the second largest consumer of oil and electricity in the world.

The shortage of domestic energy supply has already increased the demand for imports.

Over the first three quarters of this year, the country imported US$50 billion worth of energy resources and raw materials, 49 per cent up compared with the same period last year, Xinhua said last week.

The report said the country's recoverable reserves per capita was lower than the world average at 2.6 tonnes for oil, 1,074 cubic metres for natural gas and 90 tonnes for coal in 2000 - 11 per cent, 4.3 per cent and 55.4 per cent of the world average respectively, it said.

Critical power shortages in a number of provinces and regions, including Guangdong and Shanghai, have already forced some local governments to take drastic measures, such as periodically cutting power supplies this summer.

High energy consumption due to falling winter temperatures, a shortage of coal and a prolonged drought were blamed for the power shortages.

A lack of water in reservoirs in Sichuan, Yunnan, Qinghai, Hunan, Hubei and part of Guangxi provinces has seriously reduced hydropower generation, and a surge in demand in the eastern coastal provinces and cities like Shanghai, Jiangsu and Zhejiang also contributed towards the electricity shortages.

The State Electricity Regulatory Commission, the industry watchdog, has said insufficient power plant construction in previous years means electricity supply shortage will likely continue until 2006.

The energy market is largely state-owned and experts have suggested that the mainland should consider opening the market to private investment to speed up the construction of new plants as well as improving the industry's efficiency.

Over the weekend, Premier Wen Jiabao said in Mexico the country's leaders were acutely aware of such problems and said they could not afford to be complacent in the midst of the country's stellar economic performance.

'China is still a developing country, we don't regard ourselves as a powerhouse ... our leaders have always maintained a sense of crisis,' he said.

To meet its energy needs, the mainland has signed deals with Australia to import natural gas and is currently in discussion with Russia to import oil and gas from Siberia.