Energy Resources Climate OCTOBER 2013
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record energy resources climate OCTOBER 2013 Chinese O&G firms ‘go global’ must rely on market forces rather than administrative fiat. MIIT issued new regulations to expedite consoli- China University of Petroleum’s Wang Zhen dation and structural upgrade—which should reduce 王震 announces Chinese O&G firms as the industry to five or six large firms. Irrational product globally competitive ‘state-owned multinationals’. Hu mixes, overreliance on exports, and unbalanced tech- 胡卫平 Weiping China Overseas Development Associ- nological development remain key structural prob- ation is less sanguine. Chinese O&G investments over- lems says Chinese consultants Zero Power Intelligence. seas are concentrated in politically unstable regions, They praise the new NDRC and MIIT industry support were recently acquired at high cost and lack technical policies, but caution that timely delivery of promised know how. Bilateral investment protection mecha- subsidies is key to the survival of many PV generators. nisms, greater familiarity with international laws and conventions, and coordinated government policies at Surviving the doldrums in wind power home would help. Curtailed wind power led to more than C¥10 Dependency on foreign oil—how much is too much? billion in economic losses in 2012. Xiamen University’s Lin Boqiang 林伯强 says grid inadequacies China must harness new technologies in cause over-capacity in northern wind-rich areas— extraction, energy saving, coal liquefac- better to restrict wind power installation where coal- tion and gasification, and renewable energy to reduce fired power dominates. Xinjiang Goldwind chairman oil dependency, says Xu Hongcai 徐洪才 China Centre Wu Gang 武钢 says the industry has been responsive for International Economic Exchanges. Chen Liuqin 陈 to the NEA’s March measures on wind power grid inte- 柳钦 China Institute of Energy Economics also recom- gration. Transmission systems are improved, investors mends strategic energy diplomacy, gaining influence more discerning, and weaker companies eliminated. in the global oil pricing system and developing better overseas transportation systems. Still too much coal Major action plan for air pollution control announced Yang Jintian 杨金田 Chinese Academy for Environ- mental Planning advocates disaggregated, The new ‘Atmospheric pollution prevention and binding coal reduction targets for all levels control action plan’ for Beijing is an integrated of local government. The coal sector must continue to approach to environmental and developmental consolidate despite ambiguous SOE property rights issues—meeting targets, however, will not be easy. Li and local interest conflicts says Xing Lei 邢雷 Central Zhiqing 李志青 Fudan University Centre for Environ- University of Finance and Economics. mental Economics Studies praises a proposed total cap on emissions, targeting the full pollution ‘life-cycle’, EIAs for public buildings granting oversight powers to municipal environmental protection bureaus, and raising the status of environ- Beijing municipal judicial official Fu Jin 付金 mental protection in provincial performance criteria. highlights the lack of mandatory environmental Ministry of Environmental Protection (MEP) Depart- impact assessment for public buildings that can allow ment of Pollution Prevention and Control’s Wang Jian schools to be sited next to toxic sites. He urges new 汪键 a major contributor to the action plan, says MEP regulations which clearly stipulate both indoor and will directly supervise data collection andlocal govern- surrounding environment standards. ments will sign liability agreements to ensure reduced coal use in the mega-city regions. The sun never sets on nuclear power? Light at the end of the tunnel for PV industry? Nuclear power is relatively cheap and reduces coal reliance says Zhang Guobao 张国宝 National New NDRC 20-year tariff and subsidy policies are Energy Commission (NEC) Expert Advisory Committee. welcomed by the PV industry—though they will Since the Fukushima accident, new plants in China not encourage distributed power generation on private were submitted to rigorous safety inspections—and buildings. China General Certification Centre’s Qin now meet or exceed international standards. This Haiyan 秦海岩 says, in the long run, the PV industry ‘sunrise industry’ ought to steadily develop. The ERC Policy Record is prepared by China Policy, Beijing 1 record energy resources climate OCTOBER 2013 people CHEN LIUQIN 陈柳钦 b.1969, CCP member Chen’s expertise is in energy economics, international trade, urban economics, and financial theory. He directs Centres for Strategic Studies and Petroleum Studies at the China Institute of Energy Economics Research, and advises the Tianjin municipal government. A low-carbon economy, he suggests, requires more transparent carbon trading and setting up entities like the Green Climate Fund supporting investment in low carbon technology, green buildings and vehicles. A ‘low carbon economic zone’ in eastern China would be a good way of testing these ideas. Hu WEIPInG 胡卫平 b. 1951 Expert in oil and gas exploration and pipelines, liquefied natural gas develop- ment, and shale oil and gas development, Hu is a career technocrat. Joining the State Planning Commission (now NDRC) in 1991, he retired from the NEA’s Oil and Gas Division in 2012. China Overseas Development Association secre- tary general from 2013, Hu advises companies investing abroad. Investments and acquisitions overseas help enterprises enhance their own operational and management capabilities, he believes. Hu dislikes the pursuit of prestige proj- ects by some firms, oblivious to commercial feasibility. WANG ZHEN 王震 b.1969 Wang Zhen is China University of Petroleum (Beijing) Academy of Chinese Energy Strategy executive dean. Alert to overseas investment and mergers and acquisitions, Wang frequently comments on the international oil market. Given that fossil fuels will be fundamental to meeting energy needs in the foreseeable future, Wang urges deepening energy diplomacy. State-owned O&G companies, having imbibed the operational standards of Western O&G multinationals, act increasingly as ‘state-owned MNCs’. A PhD in Finance from Peking University, Wang was a Fulbright scholar at the University of Virginia. WU GANG 武钢 b.1958 Wu Gang is chairman and CEO of Xinjiang Goldwind Science & Technology Co Ltd the third largest wind turbine manufacturer in the world. Convinced wind will be indispensable in China’s sustainable development, Wu has led his company to become one of the most successful players in the global wind industry. In 2010, Wu was found to have illegally provided C¥100 million credit guarantees to construct a wind farm in Cyprus without releasing any public statement to shareholders. But his stature in the industry was such that he survived the episode largely unscathed. XU HONGCAI 徐洪才 b.1964 Xu Hongcai, China Centre for International Economic Exchanges Information Department deputy director, an international economist, he now focuses on energy and environmental economics. Green credit, bonds and insurance products are crucial for eco-friendly growth, says Xu. Banks should not issue loans to high-polluting enterprises. Naturally pro-market, Xu argues govern- ment must simplify bureaucratic procedures, reduce direct intervention in micro-level economic activities and provide credit guarantees to encourage private entry to the energy and environmental sectors. The ERC Policy Record is created by China Policy, Beijing 2 record energy resources climate OCTOBER 2013 organisations 环保部 污染防治司 In charge of the inspection and regulation of environmental Ministry of Environmental Protection pollution ranging from air, water and soil to noise, chemi- Department of Pollution Prevention and cals and vehicles, the Department conducts comprehensive Control analyses of environmental conditions across the country, and proposes and monitors the implementtion of pollution control plans. It assesses corporate environmental behaviour and regulates domestic application of international environ- mental treaties. Standing at the frontline of tackling PM2.5, the Department contributed to drafting and regulating the imple- mentation of the September 2013 ‘Air pollution prevention and control action plan’. 中国产业海外发展和规划协会 China Overseas Development Association (CODA), a GONGO China Overseas Development Association founded in 2004, helps to facilitate the ‘going global’ strategy (CODA) by offering consultation and legal services to Chinese enter- prises pursuing overseas investment and development. It publishes targeted investment information in monthly peri- odicals and co-organises the annual China Overseas Invest- ment Fair. CODA reports directly to the National Development and Reform Commission (NDRC).Its current President Zhang Guobao 张国宝 was an NDRC vice chairman and National Energy Administration director. A close collaborative relation- ship with government ministries, embassies and chambers of commerce stationed abroad allows CODA to facilitate commu- nication between the authorities and the corporate sector. 环境保护部环境规划院 Chinese Academy for Environmental Planning (CAEP), a policy Chinese Academy for Environmental Planning planning institute under the Ministry of Environmental Protec- (CAEP) tion, provides technical support and policy proposals to the central and provincial governments on environment-related issues. In May 2013, CAEP’s four-year study delivered four potential models for environmental tax law pilots to the State Administration of Taxation. The Academy has