China Focusing on Long-term Achievement of Energy-Efficiency Goal

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At the opening of the National People’s Congress on Monday, the Chinese government vowed to stick to its goal of reducing energy consumption per unit of gross domestic product (GDP) by 20 percent by 2010, despite failing to meet last year’s annual target. The government chose to leave out mention of the annual target in this year’s report to the Congress, but still expects long-term achievement of the goal by the end of 2010, Xinhua News reported.

“Adjusting national economic structure is the most important way to achieve China’s energy-efficiency goal, which is a strategy for the mid- or long-run. Only gradual progress happens within one year, but significant improvement is likely to be achieved over a five-year period,” explained Zhizhou Cai, a researcher with the China Center for National Accounting and Economic Growth at Peking University.

China is taking three major steps to speed up nationwide energy savings, including targeting the top energy consumers in the power and steel industries, as well as addressing the large contribution of manufacturing to the national economy. This year small coal-fired power plants representing 10 million kilowatts of total capacity have been asked to shut down because of their low efficiency and high pollution, and 50 million kilowatts of these plants are slated to close by 2010.

The iron and steel industry, another major energy waster, is required to cut its low-efficient production of iron by 30 million tons, and of steel by 35 million tons, this year, and to achieve reductions of up to 100 million tons and 55 million tons, respectively, by 2010. China is the world’s largest steel producer, generating nearly one third of all steel annually, with a surplus domestic market.

In the long run, adjusting the national economic structure is China’s fundamental strategy for achieving its ambitious energy-efficiency goal. The National Development and Reform Commission estimates that switching 1 percent of GDP from manufacturing to the service industry will save 1 percent of energy per unit of GDP.