SCIO press conference on ensuring energy supply and winter heating
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E-mail China.org.cn, January 20, 2023
Shou Xiaoli:
Thank you for your introduction, Mr. Lian. Next, we'll move on to the question and answer session. Please identify the media outlet you represent before asking a question.
CCTV:
The world is facing tight energy supplies amid the current complex and grave international energy situation. Is a safe, stable, and steady energy supply guaranteed in China? Meanwhile, a new round of cold waves is about to hit the country as the Spring Festival approaches. What measures will be taken to guarantee a warm winter for the Chinese people? Thank you.
Lian Weiliang:
Thank you for your questions. Energy supply is of great concern to all of us. Since last year, facing a tight global energy supply and soaring prices, China has experienced increasing pressure to maintain its energy supply. Under the strong leadership of the CPC Central Committee and the State Council, China rolled out a series of effective response measures in an orderly manner. Clear progress has been made in stabilizing energy supplies and prices. As I introduced before, China's safe, stable, and steady energy supply is guaranteed, which can be demonstrated in five aspects: space for increasing production and supply, long-term agreements on resource imports, reserves of key energies, policies to stabilize prices, and mechanisms to ensure supplies in an emergency.
First, there is space for China to increase its energy production and supply. Coal is our basic energy source. In recent years, our advanced coal production capacity has remarkably increased through measures of constructing large units, restricting small ones, increasing quality units, and cutting backward ones. Our power supply capacity has also been steadily enhanced, with the country's installed power generation capacity reaching 2.6 billion kW. Increases have been seen in oil and gas reserves and production. The production capacity of crude oil has exceeded 200 million metric tons annually, and that of natural gas is more than 220 billion cubic meters.
Second, we have signed long-term agreements on resource imports. People are concerned as to whether China's energy supplies, especially in crude oil and natural gas, which partly depend on imports, will be affected by fluctuations in the international market. I would like to take this opportunity to specify that spot goods are subject to being affected but that long-term agreements are relatively stable. We have followed international norms and market rules and secured imported resources through long-term agreements. For example, most of China's imported natural gas is secured through long-term agreements, which can effectively control and fend off risks of supply shortages and drastic price fluctuations.
Third, we have sufficient key energy reserves. We have substantially increased investment in reserve capacity building over the years. China's natural gas reserve capacity has exceeded 32 billion cubic meters. Natural gas has been stored as much as possible before the heating season. At present, halfway through the heating season, there are still 20 billion cubic meters of gas storage available. Moreover, there are about 50 million metric tons of coal that can be distributed by the government. As for coal stockpiles at power plants, the number remains at 175 million metric tons, fueling 22 days of heating, and can guarantee additional power generation during peak periods.
Fourth, we have launched policies to stabilize prices. Stable energy prices are crucial to people's well-being and stable economic performance. The pricing mechanism of coal has been further improved, enabling thermal coal prices to remain within the appropriate range. Steady progress has been made in reforms, making the pricing of on-grid electricity from coal-fired power plants increasingly market-based. The transmission mechanism of coal and electricity prices has been gradually improved. Government prices are strictly enforced in the arenas of residential electricity and gas so as to keep prices stable.
Fifth, we have set up a mechanism to ensure emergency supply. We have coordinated and let different types of energy, such as coal, natural gas, electricity, and petroleum products supplement each other so as to ensure their supply. The capability of ensuring energy supplies during peak usage has been steadily improved. The contingency plans for demand-side load management have been further improved. We will not limit the use of electricity or gas except in extreme scenarios. During extreme conditions, we will only limit the use of electricity and gas and not completely cut their supply in order to meet the basic demands for civilian energy use.
You just mentioned forthcoming cold fronts and the holiday energy supply. A cold front would increase heating energy demands. And if it brings rain, snow, and freezing weather, the production and transportation of coal will be affected as well as the power transmission. According to previous experience, general energy demands around Spring Festival are relatively lower, so supply can be guaranteed and the heating demands prompted by lower temperatures will be met. Even under extreme circumstances, when encountering unexpected civilian energy demands, we can act according to contingency plans and limit other energy usage to ensure civilian use is unaffected. Our energy supply is secure, and people will be able to enjoy sufficient heating in winter and have a happy Chinese New Year.
We should take the new cold fronts seriously, maintain bottom-line thinking, and take active measures to respond to issues. The focus should be on ensuring production, transportation, peak-time operations, and quick responses to individual cases.
First, to ensure production, we should guide energy enterprises to make contingency plans in the event of interruptions or a drop in production that may be caused by rain and snow. This is with the aim of maintaining production safely while making sure production does not drop or does not drop significantly. Second, to ensure transportation, we should guide power and heating plants and ports in the north to do a better job in unloading frozen coal and smooth the arteries and key links of coal transportation. Third, to ensure peak-time operations, we should enhance coordination, increase supply at peak times, and make sure additional civilian energy demands in extreme, low temperatures can be met. Fourth, to ensure quick response to individual cases, we should improve monitoring and pre-warning systems so as to identify potential risks before they grow into serious problems. All such issues should be tackled through coordination and in a timely manner. Thank you.
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