The energy industry is a basic industry that the Chinese Government has always considered as a priority area in its national economic development strategy. After a development period of 42 years, and especially with the reform and opening policies conducted in the recent 10 years, energy production and construction in China has developed rapidly. In 1991, national production of primary energy in China was about 1.044 billion tons of coal equivalent, including 1.09 billion tons of raw coal, 139.5 million tons of crude oil and 675 billion kwh of electricity generated. China has become a major world consumer and producer of energy. But the average energy consumption per capita in China is less than 50% of the world's level. Therefore, in order to speed up China's economic construction and increase the people's living standard, it is necessary to achieve a rational increase of national energy consumption and to increase the per capita energy consumption level. According to the economic and social development plan in China, the primary energy production by the year 2000 will be up to 1.4 billion tons of coal equivalent, including 1.48 billion tons of raw coal, 200 million tons oil equivalent of oil and natural gas, and 1,200 billion kwh of electricity generated (including 240 billion kwh of hydro-electricity.)

　　The energy structure in China is mainly based on coal. At present, coal represents 74% of the national primary energy. However, only 23% of the coal is turned into clean and convenient electricity power. As a great part of coal in China is being directly burned or separately fired, the environment issues this causes are becoming more obvious, especially in the cities where the industries and population are of high density, the energy consumption is high and pollution is serious. The statistics from the environmental protection department show that 70% of the smoke dust emitted and 90% of SO2 are derived from coal combustion.

　　Energy development is facing a serious challenge from environmental protection. In order to ease pressures on the environment due to energy applications, the Chinese Government has adopted a series of measures, such as to annually increase the budget for environmental protection in energy industries, to improve the facilities for pollution control and treatment and to strictly control pollution emissions from energy applications. All of these factors have played an important role in the control of environmental pollution caused by energy production and consumption.

　　Due to the out of date technology, poor equipment and the large number of energy producers and consumers, the utilization efficiency of energy is low and the treatment and control of pollution is difficult. It is also hard to maintain the achievements of treatment and control. Based on the special nature of China's energy structure, the above measures adopted at present are not sufficient. We should make a great effort to promote advances in technology combined with rational application of resources, high efficiency of energy application, energy saving and environmental protection.

　　1. Rational Utilization of Resources and Improving the Energy structure.

　　Improving the energy structure is a significant strategic alternative for China. It includes the following two areas. First is to speed up the development and application of hydro-electric power, nuclear power and new energy sources in order to reduce the percentage of coal in the national energy consumption. The second is to reduce direct coal consumption tonnage and increase the conversion of coal into electricity and clean secondary energy.

　　1.1 The construction of hydro-power should be speeded up. Water resources in China, with an exploitable hydro-power capacity of 380 million kw, are ranked the highest in the world. The Chinese Government has always paid great attention to hydro-electricity in China's energy development and the budget for hydro-electric construction has been increasing year by year. By the end of 1991, the installed capacity of national hydro-power was 37.16 million kw and the hydro-electricity production was 122.3 billion kwh, about 18% of the national electricity production. The feasibility study of the world famous Three Gorges Project has been finished. Due to its suitable geographical position and resources concentration, it could have an installed capacity of 17 million kw with an annual electricity production of 83 billion kwh which means 40 million tons of raw coal could de saved. That will have strategic significance in improving China's energy structure and distribution.

　　During the rapid development of large and medium hydro-power stations, we should actively support the development of small hydro-power stations built by local governments. The small stations are like stars all over the country and there is a great potential in development of small stations. The small station needs a small investment, but has a quick economic benefit. Such small stations can be widely distributed and can meet the local electric power requirements of industry and residents located far from power supply networks. In this case, the electricity from the small station can partly replace firewood and coal required by local farmers an could reduce the impact on the ecological surroundings. By the end of 2000, the national installed capacity of hydro-power will reach 80 million kw.

　　1.2. Nuclear power should be actively developed. Qingshan Nuclear Power Station has finished its first phase project and is connected with the grid. Daya Nuclear Power Station in Guangdong will have its first unit connected with the grid at the beginning of next year. By the end of the century, the installed capacity of nuclear power is planned to reach 6 million kw. At that time, nuclear power will be a very small part in the national energy structure, but it will provide a basis and experience for the development of nuclear power in the next century. Nuclear power, as a clean energy source without emission of CO2, will have a more and more important place in China's future energy structure.

　　1.3 The conversion ratio of coal to electricity should be increased. To compare with the developed countries, coal for electricity generation in China is only about 23% of the national coal production: there is a long way for China to go in that area. To reduce environmental pollution caused by direct coal burning, more coal should be converted into electricity. In the next 8 years, China plans an increase of coal-fired generation equipment of over 10 million kw installed capacity annually. About 50% to 60% of the annual increased coal production will be used for electricity generation. It is planned that, by the end of the century, the ratio of coal to be converted into electricity will be increased to 33%.

　　2. To Promote Technology Advance and Make Great Efforts to Save Energy.

　　To guarantee the achievement of strategic targets in China's economic and social development, and to solve the contradiction of supply and demand in energy, the solution is to make great efforts in energy saving and to increase the efficiency of energy applications. Energy saving not only reduces energy consumption and increases the economic benefits, but is also a basic measure to coordinate the development of energy and environment. Especially in China, coal is the main sour ce of energy. Energy saving can reduce coal combustion which means less pollution is discharged. At present, energy supply in China is tight, while, there are major problems of high unit consumption and low heat efficiency in coal burning equipment. Therefore, there is a great potential in energy saving in China. According to the estimations from certain departments, average available efficiency in China's energy applications is only about 2/3 of the world's advanced level. The energy consumption of the main industrial products in China has an energy consumption about 30% to 90% higher than the developed countries. National energy saving in China will have an overall potential of 300 million tons of coal equivalent.

　　For example, the coal fired plants produce 80% of China's total electricity gene ration. Compared with the advanced countries in the world, the average coal consumption per kwh in China is 100 grams higher than in the advanced countries. If China's coal-fired electricity generation is calculated at about 540 billion k wh in 1991, then there were about 50 million tons of standard coal or 70 million tons of raw coal consumed inefficiently.

　　The average energy consumption in producing one ton of steel in China is about 1000kg of standard coal, 300 to 400kg higher than the advanced level in the word. Last year, China had a steel production of 70 million tons, which means 20 million tons of standard coal was consumed inefficiently.

　　At present, there are 0.4 million industrial boilers in China with a total steam production of 0.8 million tons and an annual raw coal consumption of over 300 million tons. The heat efficiency of the boilers only about 50% to 60%. Therefore, there are serious problems in energy waste and environmental pollution. There are 0.14 million industrial kilns with a total annual raw coal consumption of over 200 million tons and a low heat efficiency. The potential energy saving in the above two kinds of equipment will equal to 100 million tons of raw coal in a year.

　　The operational efficiency of electric fans and water pumps used in China's industrial departments is 20% lower than the world advanced level which means 30 billion kwh electricity being additionally consumed. There are eight kinds of high electricity consuming products, including electric furnace steel, ferrous alloy, electrolytic aluminum etc., in China. If the energy consumption of each of the above products could reach the world advanced level, the potential electricity saving would be 10 billion kwh a year.

　　All the above mentioned aspects show that there is a great potential and future for energy saving in China. In the next decade, we should set measures for significant technology advance and use new and improved equipment in order to decrease the unit energy consumption and to have a national annual raw coal saving of 20 million tons.

　　2.1 By the end of the century, the electric power industry should decrease the coal consumption per kwh down to 370g of standard coal, saving 60g of standard coal.

　　2.1.1 The newly built coal-fired power plants should mainly install 300 and 600 MW units with a requirement of coal consumption less than 330 g/ kwh. The heat supply units should have a coal consumption less than 270 to 280 g/ kwh. Any proposed power project with a coal consumption over the coal consumption index should not be approved. By the end of 2000, the installed capacity of the planned new coal-fired units will be 90 million kw. If all new installed units would have a high efficiency, they will play a big role in decreasing the coal consumption for electricity generation in China.

　　2.1.2. Technical reform should be speeded up by using high efficiency and large capacity units to replace low efficiency and medium or low pressure units. For t he existing 26 million kw medium and low pressure units, 18.5 million kw units w ill be refitted by the end of the century. And during the 8th Five-Year Plan, 5. 5 million kw units will be refitted and some will be turned into thermal and electricity cogeneration power plants. After completing the 8th Five-Year Plan targets, 3 million kw of new capacity, producing 15 billion kwh of electricity, can be added while leaving coal consumption at present levels. At that time, those power plants would provide more heat to cities and would reduce the smoke dust emission by 50 to 60 tons per year.

　　2.1.3 To improve Chinese-made 125 MW, 200 MW and 300 MW units, the rebuilding will be mainly on the flow parts of steam turbines, the low efficiency auxiliary equipment and the combustion system of the boilers on the 200 MW units. After the improvement of the 200 MW units, the existing coal consumption of 390 g/kwh should be reduced by 20 g/kwh. There are over 110 sets of the 200 MW units in China and after their improvement, the annual generating capacity of those units will be increased by about 5 billion kwh.

　　With the above measures taken, it is estimated that the average per kwh coal con summation will be reduced by 60g at the end of the century. At that time, 80 mill ion tons of raw coal could be saved based on the calculation of coal fired electricity of 100 billion kwh. In terms of environmental protection, it means a potential reduction of pollution due to consuming 80 million tons less raw coal.

　　With the above measures taken, it is estimated that the average per kwh coal con summation will be reduced by 60g at the end of the century. At that time, 80 mill ion tons of raw coal could be saved based on the calculation of coal fired electricity of 100 billion kwh. In terms of environmental protection, it means a potential reduction of pollution due to consuming 80 million tons less raw coal.

　　2.2 We should speed up the improvement of the existing 400,000 sets of industrial boilers. The way to improve these industrial boilers is to replace them with largue boilers, linked to central heating systems and cogeneration. By using a pulverized coal-fired boiler with a capacity of 60 to 70 tons, the heat efficiency could be increased from the present 60% to 90%. In particular, the combined heat and electricity power plants will have a significant effect in energy saving and environmental protection. In the last decade, China has made great efforts in these areas and has achieved great results. In the next decade, we should continure to follow a policy of introducing central heating systems and combine heat and electricity, to make great efforts to save 100 million tons of coal from industrail boilers.

　　2.3 The big energy consuming enterprises of iron, steel, chemistry and building materials should make energy saving an important policy for technical innovation and capital construction and should make great efforts to reduce the unit product energy consumption by 10% to 20% within the next decade.

　　2.4. We should further promote the application of coal briquettes. As the briquette burns well with a high heat efficiency, smoke and dust emission can be reduced by 60% and coal consumption reduced by 20% to 30%. If a sulfur catcher agent is mixed in the briquette, it could reduce SO2 emission by 50%. At present, central heating systems are not popular in China. The promotion and development of coal briquettes are an appropriate, economical and practical way for saving coal and controlling environmental pollution from raw coal consumption. We should set up some incentive policies to speed up the application of domestic coal briquettes in order to have them basically popularized in China's cities and towns at the end of the century.

　　3. To set up Practical Measures and Improve the Quality of Coal Supply.

　　At present, raw coal produced in China is mostly not washed, has a low heat value, and has a high ash and sulfur content. Direct burning or combustion of such coal not only makes it more difficult for environmental pollution control, but also increases the inefficiency of coal transportation. Therefore, we should take the improvement of coal quality and coal variety as important measures for technological advance in the coal industry from now on.

　　3.1 We should increase the ratio of washed coal. During the period of the 8th Five-Year Plan, the ratio of washed coal will be increased from 17.2% to 19%. After that period, the percentage should be steadily increased, especially for coal due to be transported over a long distance.

　　3.2 Priority should be given to the development and application of high quality coal and rational coal distribution. In order to reduce air pollution in the cities, we should try to supply more high quality coal. If the average heat value of coal used in the cities can be increased by 25%, the relative reduction of emitted pollutants may play a great role in improving the air and environmental quality in the cities. The funds saved from the air and environment control can be used for the development of urban central heating and town gas.

　　Some areas in China have acid rain which is mainly due to burning high sulphur coal. A practical and economical way to control the emission of SO2 is to restrict high sulphur coal mining and to use quality coal. The Shenfu-Dongsheng coal field and other coal fields have large coal reserves with good mining conditions and the coal has a high heat value and low sulfur content. Giving priority to the development of those coal fields will have combined economic and environmental benefits. Especially for Beijing, Tianjin and Shanghai, each with an annual coal consumption of 20 million tons, we should set some favorable policies and give priority to supply more quality coal from Shenfu-Dongsheng coal field to those large cities in China.

　　The above mentioned three strategic alternatives are basic measures conducive to reduction of the emissions of smoke dust, sulfur dioxide and oxide fluorine and even reduce the emissions of CO2 which is of world concern. To reach the strategic targets set by China, a developing country, will require substantial funds and advanced technologies. The main approach presently is utilizing afforestation as a natural means to turn CO2 into oxygen. The ratio of forest coverage in China is up to 13.4% and by the end of 2000 the ratio of forest coverage will be 17. 1%, or an increase in new forest area of 0.36 million square meters.

　　In deepening the reform and expanding the opening-up policies, we wish to have further international exchange and cooperation with other countries and to introduce foreign investment and technologies in order to promote the coordination and development of energy and environment and to make contributions to the environmental protection of the world.