Energy in China

Rising Oil prices have been a hot topic in 2005 and are expected to be a major issue in 2006 in China and worldwide. With energy shortages bringing entire shifts and productions to a halt, every company in China, Foreign Invested Enterprise or not, is effected by China's energy policies and rising oil prices. China has identified energy as one of their important areas for change; however it is not only battling against rising demand, but also against energy inefficiency and increasing concern for environmental problems.

This calls for increased investments for power generation, transmission and the distribution infrastructure, and at the same time ways to reduce the high energy consumption. After all, China is the second largest energy consumer after the USA. Energy demand has doubled since 1980 and could even triple until 2020, representing nearly 25 percent of the world's energy demand increase. In order to facilitate for the increased demand and the changes, large investments, including foreign, are necessary.

Thermal power is the biggest source for power, particularly coal fired plants. Coal accounts for 67.7% of China's generated energy in 2005. Coal will also in the near future represent a large percentage of all energy produced, bearing in mind China's large coal reserve. However, coal is one of the main factors for air pollution and increased reports about accidents and poor safety in coal mines are a major concern. In November and December 2005 over 200 people were killed in two blasts in Heilongjiang Province and Heibei Province. Air pollution is becoming worse and worse in China, where it is estimated that only approximately 10% of coal-burning plants have proper sulfur reduction equipment.

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