Promote energy subsidies reform for energy transition in China

Transcription

1 Promote energy subsidies reform for energy transition in China Han Wenke Energy NDRC, P.R. China 14 December 2015 Honolulu

2 China s preparations for the G20 peer review Wide engagement with the government, academic and industry Close cooperation with the government departments and Chinese Expert Team Government departments State Council MOF Chinese Expert Team of G20 voluntary peer reviews Co-chair: - DG Han Wenke, ERI/NDRC - DG Su Ming, RIFS/MOF NDRC NEA Chinese Expert Panel Chinese Expert Working Group Industry Specialists Committee International Group

3 China s preparations for the G20 peer review cont. TORs China/the US have held multiple video conferences on terms of reference of voluntary peer reviews, work plans, peer reviews methodology and self-reviewing framework. Self-report the Ministry of Finance, NDRC, NEA and the Chinese Expert Team worked together in carrying out relevant research and draft the self-review report. Best practice discussions the Chinese Expert Team held academic exchange events on IFFSR, to discuss best practice, lessons learnt and methodologies. Participants including delegates from government departments, the industry, international organizations such as the World Bank, IMF, OECD, IEA, GSI, G20 ESWG, and Foreign Embassies. Methodology discussions the Chinese Expert Team and government delegation visited relevant international institutes for IFFSR, exchanged policy experiences and academic discussions.

4 Significance of IFFSR in China Energy revolution Reforming and phasing out IFFS whilst improving the energy supporting policy framework is conducive to an energy production and consumption revolution in China, optimizing energy mix, ensuring energy security. Energy market reform Deepening energy system reform and further promoting the marketization of the energy sector. International cooperation Enhancing international energy collaboration, learning from international experience in an open environment and propelling the pace of reform. Emission reduction Propelling energy saving and emission reduction, improving the environment, achieving sustainable economic and environmental development. Fiscal policies Alleviating fiscal stress, optimizing financial spending structure, as well as improving public welfare IFFSR will support China s energy transition

5 Energy transition has started in China - towards a green, low carbon, clean and efficient pathway Annual growth rate for energy consumption was 4.4% in the last twenty years of 20 th Century Annual growth rate for energy consumption was 8.4% from (2.6 times of world average-2.26%) Annual growth rate for energy consumption in China decreased to 3.2% from

6 Motivations for accelerating energy transition in China President Xi Jinping calls for Energy revolution in China Promote energy consumption revolution, curb unreasonable energy consumption Promote energy supply revolution, establish diversified supply system Promote energy technology revolution, drive industrial upgrading Promote energy system revolution, establish a fast lane for energy development Comprehensively strengthen energy international cooperation, achieve energy security under opening-up conditions Make strategy for energy production and consumption revolution in 2030 Policy framework for supporting energy transition in China Macro-policies and measures to deal with the new normal Policies and measures to curb haze and air pollution Policies and measures to reduce greenhouse gas emissions Policies and measures to promote the construction of ecological civilization and environmental governance Promote energy production and consumption revolution strategy implementation

7 IFFSR s roles in energy transition in China Closely incorporate IFFSR under the G20 process into domestic reforms, for both production and consumption side energy transition policies Production side High proportion renewable energy development Ultra low emissions in coal power Safe and efficient development of nuclear power Build integrated power grid and smart power system Low-cost and green exploitation of oil and gas Economic, safe and green exploitation of coal Consumption side Strictly control total energy consumption and energy intensity Strictly control various unreasonable energy consumption Increase proportion of power in end users Vigorously improving energy efficiency in industrial sector Promoting low and zero energy consumption buildings Vigorously promote electric vehicles and fuel-efficient cars

8 IFFSR helps to accelerate renewable energy development Straw Waste Solar Wind Hydro Nuclear Gas Coal China s future power development: only high proportion renewable power will achieve transition Under High Proportion Renewables Scenario, non-fossil power can reach more than 50% of total generation in 2030

9 FFS and energy market reform progress in China Fiscal and taxation systems have been optimized. Preferential tax policies have been rationalized gradually. Oil price forming mechanism insists on market-oriented direction and gradually changes from government pricing toward integrating with international market pricing. Natural gas pricing mechanism has experienced reform from cost plus method to market net back value method. Market-based pricing mechanism has been realized on coal, at the same time, policies and measures for coal consumption cap control are strengthening. Power system reform is further promoted, and pricing mechanism is constantly adjusted and improved according to electric power development situation.

10 Lessons learnt with IFFSR in China IFFSR can not be independent efforts. The subsidy policies are closely linked to energy price, fiscal and taxation system reforms, also associated with public welfare, diplomacy and environmental policies, which must be incorporated into the overall economic and social reform of China. IFFSR can be very challenging. Realise green growth with lower costs, at the same time tackle energy poverty is a common challenge faced by many developing economies. There is not a one size fits-all approach for reform or peer review. A flexible approach, which adapts to economy specifics, will better help the volunteer economies to promote the reform, both domestically and internationally.

11 Thank you