China Energy Drive Slows

Energy-saving campaign lags as emissions climb.
By Michael Lelyveld
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Traffic passes below power lines in Beijing, July 20, 2010.
Traffic passes below power lines in Beijing, July 20, 2010.

China's government has acknowledged trouble in meeting its energy-saving targets as it prepares new measures to deal with the trend.

On Dec. 8, a top environmental official said China is unlikely to meet its energy efficiency goal for the year after disappointing results in the first three quarters, China Securities Journal and Dow Jones reported.

Energy use per unit of GDP declined just 1.6 percent during the period, making the 2011 goal of a 3.5-percent cut "hard to achieve," said Zhao Jiarong, deputy secretary-general of the National Development and Reform Commission (NDRC).

On the bright side, the country showed some improvement in its "energy intensity" index, although far short of the pace for a promised 16-percent cut by 2015 under the 12th Five-Year Plan.

On the darker side, some major pollutants have climbed, despite the government's call for a 1.5-percent drop in 2011. Nitrogen oxide (NOx) emissions jumped 6.17 percent in the first half of the year, Zhao said.

The smog-forming gas is caused by burning fuel at high temperatures in cars, trucks and coal-fired power plants, according to the U.S. Department of Energy. China is both the world's biggest coal consumer and top auto market.

Close watch on pollution

China's press has paid close attention to air pollution in Beijing after weeks of thick smog, but it has yet to focus on excessive energy use as the cause.

The government has also said little this year about the missed energy targets, in sharp contrast to the campaign for meeting previous goals under the last five-year plan that ended in 2010.

"It seemed to have gone completely off the agenda," said Philip Andrews-Speed, a China energy expert at the German Marshall Fund of the United States.

On Friday, NDRC director Zhang Ping vowed the situation would change.

The government is set to announce a plan for controlling total energy consumption, said Zhang at the NDRC's annual work meeting, although he gave no precise time frame, the official English-language China Daily reported.

"We need to achieve a better balance between economic growth, economic transformation, energy conservation, and emissions reduction," Zhang said.

'Harsh, haphazard steps'

The government's earlier energy-saving campaigns have included some harsh but haphazard steps.

Last December, China's provinces responded to the push for a 20-percent drop in energy intensity from 2005 by shutting off power to businesses and even hospitals and homes.

The government claimed partial success for the past five-year period, reporting an improvement of 19.1 percent. But there have been no similar measures and few reports about energy efficiency this year.

In October, the NDRC reported in a single-line statement that the energy-GDP index had dropped by 0.8 percent in the first half from a year before. Because the index is only a proportional measure, China's GDP growth suggests total energy use climbed at least 8 percent.

The poor performance may raise doubts about China's climate commitments, which are closely tied to the energy index. The government has pledged to cut 40 percent of carbon emissions per unit of GDP by 2020 from 2005 levels, but the task may be made tougher by emissions this year.

The rise in NOx pollution appears to be a sign of a lower priority for energy-saving at high levels of government, said Andrews-Speed.

"We may have been optimistic in thinking that lots of things were going on in the background to make sure that the earlier trend continued," he told RFA.

Boost in production

Heavy industry is believed to have burned more energy in the first quarter as it boosted production to make up for power cuts at the end of 2010.

So far, officials have provided no details or supporting data for efficiency estimates, but a slew of reports suggest that conservation has taken a back seat to economic concerns this year.

In October, the NDRC said that coal consumption rose 10.3 percent in the first three quarters, somewhat more the 9.4-percent GDP growth for the period.

China accounts for about half of the world's coal use, the International Energy Agency (IEA) said in a new report. Its coal production now represents more primary energy supply that Middle East oil, the IEA said.

Power generation has risen 12 percent in the first 11 months, already exceeding the 2010 total, according to Reuters.

At thermal power plants, fueled largely by coal, output rose 15.2 percent through October, the Platts energy newswire reported, citing the Singapore-based brokerage UOB Kay Hian.

Rise in demand for oil

In November, China's implied oil demand increased only 1.7 percent from a year earlier, but the rate of 9.5 million barrels per day was the second-highest in history. Crude imports also rose 13 percent from October to a near-record, Reuters said.

In a key link to air pollution, the official Xinhua news agency said this year's new car sales are expected to top 18 million vehicles.

The figures from the China Association of Automobile Manufacturers mean that nearly 50,000 new cars are hitting the road each day, pushing oil demand and pollution even higher.

Facing the effects of slowdowns in both the United States and Europe, China's leaders have had their hands full with steering the economy past the shoals of recession.

The efficiency campaign may have been left behind as a result.

"With falling international demand for Chinese goods, they are seeking to boost domestic consumption, and what better way to do it than to build more buildings and make more cars," Andrews-Speed said.

There are also signs that the efficiency lag will have consequences for the future even if the government renews its earlier campaign.

Development 'guzzles energy'

Also in November, a senior housing official complained that 95 percent of China's new buildings are "energy-guzzling" projects that fail to meet standards, Xinhua reported.

Consumption in buildings accounts for 30 percent of China's energy use, said Tang Kai, chief planner of the Ministry of Housing and Urban-Rural Development.

It is unclear why the government has been unwilling or unable to require developers to meet energy standards, but the results are likely to hamper conservation efforts for as long as the buildings stand.

Industry profits from rapid development may be a primary reason for failure to enforce efficiency rules.

In the first nine months of the year, profits in building material industries climbed 57.5 percent to 214.6 billion yuan ($33.7 billion), the NDRC reported. In the cement industry, profits soared 130 percent, Xinhua said.

Few details of the NDRC's new plan have been available, but China Daily cited experts as saying that provinces would not be allowed to improve their efficiency ratios by simply reporting more GDP.

"Setting limits on energy use means putting limits on GDP," said Lin Boqiang, director at Xiamen University's China Center for Energy Economics Research.





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