The starting point of natural gas distributed energy and future energy

The Future Energy Transformation of Natural Gas

The reform and opening up in the last century enabled China's economy to develop rapidly, but the rapid development of the economy also brought huge energy consumption, and the cost of development was also enormous. The total primary energy consumption in China increased from 570 million tons of standard coal in 1978 to 4.36 billion tons of standard coal in 2016, and the proportion of coal consumption has remained between 60% and 70%. The extensive consumption of coal based energy has brought about severe ecological and environmental problems, with the most prominent example being the widespread air pollution problem. This also means that future economic development cannot follow the old path of the past 20 years. Although energy demand will continue to grow with economic growth, energy supply and consumption must strictly adhere to the ecological red line of sustainable development. In this situation, it is urgent to accelerate the transformation of China's energy towards clean, low-carbon, safe and sustainable development.

In April of this year, the National Development and Reform Commission and the National Energy Administration issued the "Energy Production and Consumption Revolution Strategy (2016-2030)" (hereinafter referred to as the "Strategy"), which is also the release of China's national revolutionary energy strategy to the outside world. This ambitious strategy has significant practical and long-term implications for energy development.

The Strategy points out that China's energy development is entering a new stage of transformation from total expansion to improving quality and efficiency. This is the need for China's supply side structural reform, improving the quality of economic development, breaking through resource and environmental constraints, controlling air and water pollution, promoting ecological civilization construction, actively addressing climate change, achieving long-term sustainable development, and increasing energy public services to benefit all people and accelerate national modernization.

The previous "13th Five Year Plan for Energy Development" released by the Chinese government proposed to implement dual control over the total energy consumption and energy intensity, fundamentally reversing the extensive growth mode of energy consumption. It requires that by 2020, the proportion of coal consumption in primary energy should be reduced to below 58%, and the joint proportion of non fossil energy and low-carbon energy such as natural gas should reach 25%. On this basis, the Strategy proposes further energy revolution goals: by 2030, the use of renewable energy, natural gas, and nuclear energy will continue to grow, while the use of high carbon fossil fuels will significantly decrease. Non fossil energy accounts for about 20% of total energy consumption, while natural gas accounts for over 15%. The new energy demand is mainly met by clean and low-carbon energy.

Natural gas becomes the main energy source

Compared to traditional fossil fuels, natural gas has advantages in environmental protection and utilization. As a clean and low-carbon energy source, natural gas can complement other low emission energy sources such as nuclear and renewable energy, making it the most practical choice for clean energy supply. Accelerating the development of the natural gas industry and increasing the proportion of natural gas in primary energy consumption is of great significance to China.

In December 2016, the National Development and Reform Commission released the "13th Five Year Plan for Energy Development", proposing the development goals of increasing the proportion of non fossil energy consumption to over 15% by 2020, striving to reach 10% of natural gas consumption, and reducing the proportion of coal consumption to below 58%.

In June of this year, the National Development and Reform Commission and 13 other ministries jointly issued the "Opinions on Accelerating the Utilization of Natural Gas", which clearly stated that natural gas should gradually be cultivated as one of the main energy sources in China's modern clean energy system, striving to make the proportion of natural gas in the primary energy consumption structure reach about 10% by 2020, and to increase the proportion of natural gas in the primary energy consumption structure to about 15% by 2030.

Not long ago, the National Development and Reform Commission also issued a notice on reducing the price of non residential natural gas benchmark stations. The price of non residential gas benchmark stations will be reduced by 100 yuan per thousand cubic meters, which will be implemented from September 1, 2017. Analysts point out that the recent reduction in non residential gas station prices means that the reform of natural gas prices is breaking the ice

In addition, in terms of resources, China's natural gas supply guarantee capability has been enhanced, achieving a diversified domestic and multi-channel import supply pattern; In terms of infrastructure, the main framework has also been basically formed, and the natural gas pipeline network has covered almost all provinces and cities except Xizang.

Our country has a population of 1.37 billion, and based on the total natural gas consumption of about 210 billion cubic meters last year, the total population we cover now is just over 400 million. This means that our natural gas supply can only meet the needs of one-third of the country's population, and there are still two-thirds of the market that we need to explore. Nur Bekri, Director of the National Energy Administration, believes that China still has a long way to go to achieve the goal of natural gas accounting for 10% of primary energy by 2020.

In this situation, a package of policies is preparing to take effect. The Ministry of Land and Resources is studying and formulating normative documents for the reform of the oil and gas management system. The National Energy Administration has issued relevant documents on the interconnection of oil and gas pipelines to local governments. At the same time, opinions will be issued to accelerate the construction of natural gas infrastructure and establish a natural gas peak shaving market mechanism, and relevant policies for the integrated development of natural gas and new energy will be brewing.

The primary next step is to accelerate the utilization of natural gas. Nur Baikeli pointed out that natural gas power generation projects should be implemented, natural gas distributed energy should be vigorously developed, natural gas peak shaving power stations should be encouraged, natural gas cogeneration should be developed in an orderly manner, and the integration of natural gas and new energy should be promoted.

Let a hundred flowers bloom together to promote the 'gasification of China'

Due to the localized characteristics of natural gas distributed energy, the role of local governments in its development cannot be ignored. As urban planners, local governments can integrate natural gas distributed energy into urban and energy development plans; As a promoter of energy development, local governments can formulate targeted support policies based on local characteristics; Considering the clean and environmentally friendly characteristics of natural gas distributed energy, local governments can promote the entry of natural gas distributed energy into urban heating and cooling networks through pricing and policy mechanisms; As energy regulators, local governments can innovate their regulatory system to better meet the demand for distributed natural gas energy; In addition, as energy consumers, local governments can demonstrate the advantages of natural gas distributed energy and promote its application through public engineering demonstration projects.

According to the "Special Support Measures for the Development of Natural Gas Distributed Energy Supply Systems and Gas Air Conditioning in Shanghai", Shanghai provides equipment investment subsidies of 1000 yuan/kW for natural gas distributed energy supply system projects with a single unit scale of 10000 kW or less; For distributed energy supply projects with an annual average comprehensive energy utilization efficiency of 70% or more and an annual utilization hours of 2000 hours or more, an energy-saving subsidy of 2000 yuan/kilowatt will be provided; For natural gas distributed energy supply projects with an annual average comprehensive energy utilization efficiency of 80% or more and an annual utilization hours of 3000 hours or more, an energy-saving subsidy of 500 yuan/kW will be provided.

The Interim Measures for Promoting the Development of Distributed Natural Gas Energy in Changsha City stipulate that the subsidy standard is 3000 yuan/kilowatt, and the maximum subsidy amount enjoyed by each project shall not exceed 50 million yuan. And propose preferential policies such as franchising, tax reduction, and fiscal incentives. After the comprehensive demonstration period of national energy-saving and emission reduction fiscal policies ends, Changsha will allocate an annual budget of 30 million yuan specifically for the development of natural gas distributed energy projects and related industrial chains.

The "Implementation Rules for Several Policies to Accelerate the Development of Clean Energy Heating in Qingdao" not only breaks through the heating operation rights restrictions of existing franchise areas for clean energy heating projects, but also provides strong support for the development of clean energy heating projects in terms of land transfer, construction investment subsidies, operation subsidies, electricity and gas source guarantees, etc. For newly built natural gas distributed energy heating projects, equipment investment subsidies will be provided at a standard of 1000 yuan/kW. For projects with an annual average energy utilization efficiency of 70% or above, an additional subsidy of 1000 yuan/kW will be provided. The maximum subsidy amount enjoyed by each project shall not exceed 30 million yuan.

Gasification Jiangsu "is a strategy proposed by Jiangsu Province in 2011 to increase the use of natural gas as an energy source. During the 13th Five Year Plan period, Jiangsu alone will add 3.78 million kilowatts of natural gas power generation installed capacity, and by 2020, the total installed capacity of natural gas power generation will reach 7.86 million kilowatts; The 13th Five Year Plan for Shanghai Energy shows that Shanghai will orderly promote the construction of gas-fired power plants and promote the development of distributed energy supply systems. In addition, Shanghai will further enhance its ability to ensure oil and gas supply and increase the proportion of natural gas consumption. It will improve its ability to ensure oil and gas supply in terms of resources, pipeline networks, reserve peak shaving, and terminal network, and vigorously promote the utilization of natural gas; As a province with abundant natural gas resources, Sichuan Province will also promote the development of distributed natural gas energy in industrial parks, large buildings, and other areas during the 13th Five Year Plan period; During the 13th Five Year Plan period, Beijing will continue to encourage the development of gas distributed energy systems for gas consumption. In the future, the proportion of natural gas power generation in Beijing will reach over 90%, and the proportion of natural gas heating will exceed 85%.