China steps up energy conservation but coal still to play key role

Sep 15, 2006, 11:08 GMT

Hamburg - Fast-paced economic growth and criticism by environmental groups has forced China to step up moves to conserve energy, with leading members of the country's power sector laying out plans Thursday to cut consumption.

'Reducing that consumption has become a major issue to resolve in supporting sustainable growth,' Xie Qihua, chief of the Baosteel Group Corporation, the nation's biggest steelmaker, told a major business summit on China in the northern German city of Hamburg.

'As a huge developing country undergoing the process of industrialization and modernization, China is facing an increasingly severe shortage of energy and resources,' she said with her industry's energy consumption representing between 10 and 15 per cent of the national economy's total.

'We need to optimize the protection of the environment,' Zhao Xizheng, president of the China Electric Council told the China- Europe conference, which was organized by the Hamburg Chamber of Commerce.

But despite China's concerns about the environmental fallout from it's rapidly growing energy demand, Zhao made clear that coal will continue to be the foundation of powering its economy.

This despite Beijing's plans to diversify its energy sources away from coal.

'Coal suits China,' said Zhao. 'It suits China where it is in the world economy.'

Officials attending the three-day conference insisted that moves to boost renewable energy sources had been incorporated into China's power policy.

But they expressed doubts about the overall role alternative energy could play in helping the country to meet enormous energy demands.

'Wind energy is a growing part of the power sector,' Zhao told the conference. 'But it has its weakness,' he said. 'The total capacity is small.

'For wind to be important it needs to be backed up by the development of nuclear power,' he said.

In the meantime, Chinese energy officials are battling to meet Beijing's demands that energy consumption needs to be curtailed before the nation's economic growth suffers.

'This is a serious issue for the iron and steel industry,' said Xie with her industry faced with having to meet a series of tough targets in cutting its high energy consumption, which in addition to iron and steel includes water.

She said that her company had made progress in cutting its power consumption. 'But there is still a long way to go before we reach the targets,' she told the conference. 'This is a serious task.'

Xie said that five per cent of her company's investment had been earmarked for helping to develop ways of conserving energy. But she added, 'more needs to be done.'

The Baosteel Group chief said that her company already manufactures energy-saving products and had introduced new furnace with an energy-conserving technology.