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    China Business
     Jul 12, 2006
China learns to conserve its energy

BEIJING - For the first time, China has published a list of energy consumption in 2005 for each of its 31 provinces on the mainland, except Tibet. This is also the first time that China has ever compiled and publicized statistics on gross domestic product (GDP) energy efficiency; ie, how much energy is consumed to generate 10,000 yuan (US$1,250) of GDP.

The statistics, generated by the National Development and Reform Commission (NDRC), the National Bureau of Statistics and the National Energy Leading Group Office, also include energy consumption figures for every 10,000 yuan of industrial value-added output.

According to the list, Guangdong was the most energy efficient province, with its energy consumption for every 10,000 yuan of



GDP being equivalent to the burning of 0.79 tonnes of thermal coal last year. Beijing ranked second, with 0.8 tonnes of coal consumed for 10,000 yuan of GDP.

The Ningxia Hui Autonomous Region in northwest China was the most energy inefficient province, burning 4.14 tonnes of thermal coal to generate 10,000 yuan of GDP.

The national average was 1.22 tonnes, which was much lower than previous official estimates. And the national average of energy consumption for every 10,000 yuan in industrial value-added output was equivalent to the burning of 2.59 tonnes of thermal coal in 2005.

Using energy consumption per unit of GDP as a new yardstick to measure economic development and officials' performance was first officially proposed by Premier Wen Jiabao in March. In his Government Work Report to the annual session of the National People's Congress (NPC) in March, Wen set a target of cutting energy consumption per unit of GDP by 4% each year for the next five years.

Beijing adopted this new yardstick in order to reduce wasteful consumption of energy in pursuit of sustainable economic growth. Beijing has blamed the wasteful energy consumption on local officials' "blindly" chasing after GDP growth.

At that time, the Chinese media quoted official figures as saying that the average energy consumption per 10,000 yuan of GDP was equivalent to burning of 2.6 tonnes of thermal coal, more than double the 1.22 tonnes reported by the latest statistics.

Nevertheless, the revised energy consumption per unit of GDP in China is still about three times that of the United States and 10 times that of Japan, according to Zhang Jianyu, a visiting scholar at Tsinghua University in Beijing.

"The list will help provincial officials compare themselves with other regions, and push them to improve efficiency," said Zhou Dadi, director general of the Energy Research Institute of the NDRC, the nation's top economic planning body. "Officials will be assessed in terms of energy saved, instead of just the GDP growth rate which they were measured on in the past," said Zhou. "Energy efficiency will take top priority in the promotion of officials."

As for Ningxia's poor performance in energy efficiency, Zhou explained that the region's economic growth was highly dependent on heavy industries such as metal production.

"It is good to require provinces and industries to take part in this energy-saving drive," he said. But he warned against fraud in the reporting of energy consumption by some regions. It was unclear whether the data used to compile the just-released list were gathered by the three central government bodies or only presented to them by the respective provinces.

A recent report on world energy resources by BP, one of the world's largest energy groups, said that although China had maintained a rapid rate of growth, its energy consumption growth rate had declined from 15.5% in 2004 to 9.5% in 2005. In terms of oil consumption, China's growth also slowed from 17% in 2004 to only 2.9% in 2005, according to BP's Statistical Review on World Energy.

According to the BP report, the average price of Brent crude oil was US$54.52 per barrel in 2005, surging more than 40% year-on-year; current prices are considerably higher.

Xu Dingming, deputy director of the General Office of the National Energy Leading Group and former director of the NDRC's Energy Bureau, said he fully agreed with the view of BP. He said it was unfair and not a scientific attitude to make the groundless accusation that China had directly caused the high oil prices on international market.

The BP statistics indicated that although China's oil imports dropped sharply last year, oil prices still rose substantially, Xu said. Gary Dirks, vice president of BP and president of BP (China), also said that when China's consumption of oil dropped, international oil prices still continued rising from 2004.

To curb the growth of energy-thirsty industries, the NDRC has decided to increase the price of electricity by an average of 0.025 yuan per kilowatt-hour since last July 7. The price adjustment, according to the NDRC, will not have a huge impact on household expenses.

"It will promote the development of renewable energy, fund more power grid projects and resolve the contradiction caused by rising coal prices," said a statement issued by the NDRC.

(Asia Pulse/XIC)


Why China's energy saving drive may be wasted (Jun 27, '06)

Zhejiang uses energy efficiency to evaluate officials (Jun 21, '06)

Auto boom worsens China's energy crunch (Jun 3, '06)

Market pricing likely to push up energy prices (Feb 8, '06)

 
 



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