Report No. 3391 CHA "LU CO?
China:
Socialist Economic Development
(In Nine Volumes) 3391
Annex E: The Energy Sector Vol. 6
June 1, 1981 (reprinted March 10, 1982)
East Asia and Pacific Regional Office
FOR OFFICIAL USE ONLY
Document of the WorId Bank
This document has a restricted distribution and may be used by recipients
only in the performance of their official duties. Its contents may not otherwise
be disdosed without World Bank authorization.
CURRENCY EQUIVALENTS
The Chinese currency is called Renminbi (RMB). It is denominated
in yuan (Y). Each yuan is subdivided:
1 yuan = 10 jiao = 100 fen
Exchange rates used in this report are as follows:
1977 $1.00 = Y 1.828
1978 $1.00 = Y 1.661
1979 $1.00 = Y 1.541
WEIGHTS AND MEASURES
Chinese statistics are usually in metric units; in addition,
mu and jin are often used:
1 mu = 0.1647 acres = 0.0667 hectares (ha)
1 jin = 0.5 kg
FISCAL YEAR
January 1 - December 31
TRANSLITERATION
The Pinyin system is used in this report.
FOR OFFICIAL USE ONLY
CHINA: SOCIALIST ECONOMIC DEVELOPMENT
ANNEX E
THE ENERGY SECTOR
Table of Contents
Page No.
1. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Energy Production and Consumption . . . . . . . . . . . . . . 1
Importance in the Economy .1.. . . . . . . . . . . . . . . . I
Historic Growth Rates ... . . . . . . . . . . . . . . . . . 3
Reserves .... . . . . . . . . . . . . . . . . . . . . . . 5
Technology .... . . . . . . . . . . . . . . . . . . . . . 6
Institutions .... . . . . . . . . . . . . . . . . . . . . 6
Investment Planning ... . . . . . . . . . . . . . . . . . . 7
Pricing .... . . . . . . . . . . . . . . . . . . . . . . . 9
Energy Consumption in Relation to GNP . . . . . . . . . . . . 12
Prospects .14
2. COAL ............................ . 25
Introduction.. . .. . .25
Organization . ... .25
Employment Conditions . . . . . . . . . . . . . . . . . . . . 25
Production .... . . . . . . . . . . . . . ...... . . 25
Coal Quality .... . . . . . . . . . . . ....... . . 29
Transportation .... . . . . . . . . . . ... ..... . 30
Consumption . . . . . . . . . . . . . . . . . . . . . . . . . 31
Export Prospects . . . . . . . . . . . . . . . . . . . . . . 31
Productivity .... . . . . . . . . . . . . ...... . . 31
Prospects and Recommendations ... . . . . . . . ..... . 32
Capital Requirements . . . . . . . . . . . . . . . 33
3. PETROLEUM . . . . . . . . . . . . . . . . 35
Sector Development .... . . . . . . . .......... 35
Organization . .......... ... ........ . .35
Exploration .... . . . . . . . . . . . .......... 36
Production .... . . . . . . . . . . . . . . . ....... . . 37
Quality of Crude Oil . .. . . . . . . . . . . . . ...... 40
Equipment and Methods ... . . . . . . . . . . ........ . 40
Consumption . . . . . . . . . . . . . . . . . . . . . . . . . 41
Natural Gas .... . . . . . . . . . . . . . . . ....... . . 42
Oil and Gas Reserves . ..... . ....... . 43
Pipelines and Refineries ... . . . . . . . . ........ . 44
Oil Shale .... . . . . . . . . . . . . .......... 46
Recommendations .... . . . . . . . . . . . . . ......... 47
Investment Requirements ... . . . . . . . . . ........ . 48
| This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Page No.
4. ELECTRICITY . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Sector Development . . . . . . . . . . . . . . . . . . . . . 48
Organization . . . . . . . . . . . . . . . . . . . . . . . . 49
Consumption Pattern . . . . . . . . . . . . . . . . . . . . . 49
System Description . . . . . . . . . . . . . . . . . . . . . 50
Fuel Consumption . . . . . . . . . . . . . . . . . . . . . . 51
Capacity Utilization . . . . . . . . . . . . . . . . . . . . 52
Demand Management . . . . . . . . . . . . . . . . . . . . . . 52
Prospects and Recommendations . . . . . . . . . . . . . . . . 52
5. OTHER SOURCES OF ENERGY .55
Geothermal . . . . . . . . . . . . . . . . . . . . . . . . . 55
Noncommercial Energy .55
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Tables A.1 - A.25 .57
Ministry of Electric Power: Organization Chart . . . . . . . . . 84
MAPS
IBRD 15524R: China - Power Grids and Major Power Stations, 1979
IBRD 15627R: China - Coal and Lignite Production by Province, 1979
IBRD 15628R: China - Major Oil Field and Oil production by Region, 1979
LIST OF TABLES IN THE TEXT
1.1 Energy Balances, 1979 ... . . . . . . . . . . . . . . .. 2
1.2 Energy Production Growth Rates, 1952-80 . . . . . . . . . . . 4
1.3 Composition of Primary Energy Production, 1952-80 . . . . . . 4
1.4 Regional Distribution of Reserves . . . . . . . . . . . . . . 5
1.5 Price Comparisons . . . . . . . . . . . . . . . . . . . . . . 10
1.6 Energy Intensity of Major Developing Country Economies, 1978 12
1.7 Alternative Estimates of 1985 and 1990 Oil and Coal Balances 15
1.8 Construction of 1985 and 1990 Oil and Coal Balance Estimates 16
1.9 Summary Table of Energy Saving and Switching Assumptions for
Oil and Coal in the Moderate and High Energy Savings
Scenarios. . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.10 Levels of Conservation Implied in Demand Projections . . . . . 24
Page No.
2.1 Recoverable Reserves of Coal ... . . . . . . . . . . . . . . 25
2.2 Coal Production, 1955-80 ... . . . . . . . . . . . . . . . . 27
2.3 Underground Coal Mines in Operation . . . . . . . . . . . . . 28
2.4 Raw Coal Analyses ... . . . . . . . . . . . . . . . . . . . 29
2.5 Coal Consumption by Sector, 1976-78. . . . . . . . . . . . . . 30
2.6 Coal Industry Employment, 1975-79. . . . . . . . . . . . . . . 32
2.7 Major Coal Mine Projects . . . . . . . . . . . . . . . . . . . 34
2.8 Investment in the Coal Industry, 1976-80 . . . . . . . . . . . 35
3.1 Crude Oil Production by Region and Major Fields, 1977-80 . . . 38
3.2 Oil Balances, 1979 . . . . . . . . . . . . . . . . . . . . . . 42
3.3 Natural Gas Production ... . . . . . . . . . . . . . . . . . 43
3.4 Tentative Estimates of Oil and Natural Gas Reserves. . . . . . 44
3.5 Output of Principal Refined Petroleum Products . . . . . . . . 45
3.6 Shale Oil Production ... . . . . . . . . . . . . . . . . . . 47
3.7 Investment for Exploration, Development and Refineries . . . . 48
4.1 Major Electrical Grids, 1979 . . . . . . . . . . . . . ... . . 50
TABLES IN THE APPENDIX
A.1 Growth of Energy Production, 1952-80 . . . . . . . . . . . . 57
A.2 Energy Sector Investments, 1977-79 . . . . . . . . . . . . . 58
A.3 Oil Exports, 1975-80 ...59
A.4 Number of Underground Coal Mines in Operation, 1975-79. . . . 60
A.5 Coal Production by Type and Size of Mine, 1970-80 . . . . . . 61
A.6 Lignite Production by Province, 1955-79 . . . . . . . . . . . 62
A.7 Anthracite Coal Production by Province, 1955-79 . . . . . . . 63
A.8 Bituminous Steam Coal Production by Province, 1952-79 . . . . 64
A.9 Coking Coal Production by Province, 1955-79 . . . . . . . . . 65
A.10 Employment in Coal Mining, 1970-79. . . . . . . . . . . . . . 66
A.11 Coal Exploration Effort, 1970-79 . . . . . . . . . . . . . . 67
A.12 Coal Investment by Region, 1970-80e . . . . . . . . . . . . . 68
A.13 Major Power Stations in China, 1979 . . . . . . . . . . . . . 69
A.14 Electricity Generation and Installed Generating Capacity,
1949-79 . . . . . . 72
A.15 Hydro and Thermal Electricity Generation by Region, 1970-79 73
A.16 Hydro and Thermal Installed Capacity by Region, 1970-79 . . . 74
A.17 Generating Capacity by Size of Unit, 1979 . . . . . . . . . . 75
A.18 Power Station Fuel Consumption and Efficiency, 1979 . . . . . 76
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Page No.
A.19 Electricity Sales by Consumer Category, 1949-79 . . . . . . . 77
A.20 Electrification of Communes and Brigades by Region, 1979. . . 78
A.21 Electricity Tariffs, 1980 .79
A.22 Electricity Investment, 1975-79 . . . . . . . . . . . . . . . 80
A.23 Electricity Industry Staff, 1979 . . . . . . . . . . . . . . 81
A.24 Theoretical, Exploitable, and Investigated Hydro Potential
by Region .82
A.25 Additions to Generating Capacity Anticipated Before 1985,
by Region .83
CHART
Ministry of Electric Power Organization Chart
1. OVERVIEW
Energy Production and Consumption
1.01 China is the world's third largest consumer of commercial energy,
following the USA and the USSR, and, at least at present, it produces more
than it consumes. Production and consumption in 1979 are estimated at 649
million tons of coal equivalent (Mtce) and 621 Mtce, respectively. Consump-
tion per capita, at about 644 kgce, was close to the average for developing
countries in 1979 but it is high per dollar of estimated GNP (about 2.5
kgce); the corresponding averages for developing countries as defined in
the World Bank's World Development Report, 1980 (WDR, 1980) are about 620
kgce/capita and 0.9 kgcel$. Industry /1 is the dominant energy consumer,
accounting for 72% of the "commercial" total. Household and commercial uses
consume about 14%, followed by agriculture /2 (6%) and transportation (5%).
1.02 Table 1.1 shows estimated commercial energy balances. Coal is the
main source of energy: production in 1979 was about 635 million tons or 454
Mtce./3 Production of oil, the second largest source, was about 106 million
tons or 155 Mtce. Natural gas production amounted to about 14.5 billion m3
or 19 Mtce and hydroelectricity to 50 TWh (50 billion kWh) or 21 Mtce.
1.03 "Noncommercial" energy sources comprise mainly rice straw and other
crop residues, firewood and animal wastes. Together they supplied 250 Mtce of
energy (unofficial estimate), which is comparable on a per capita basis with
estimates for other low-income, densely populated developing countries.
Importance in the Economy
1.04 The energy sector in China is important not only as a producer of
essential products but also as a direct contributor to GNP, as a foreign
exchange earner, and as a consumer of investment funds. The sector
accounted for about 12% of the 1979 gross value of industrial output in
/1 Including here mining, but excluding electricity generation, which is
generally counted as part of industry in Chinese statistics.
/2 The data for agriculture include rural consumption of electricity in
brigade industries, other sideline activities, and household and
commercial uses; in oil, where agriculture is computed as a residual,
they probably also include oil used in construction.
/3 Assuming, in the absence of an official estimate, that Chinese coal
averages 5 million kcal per ton, compared with 7 million kcal per ton
of "standard" coal or "coal equivalent."
- 2 -
Table 1.1: ENERGY BALANCES, 1979
Total Noncom-
Natural Electricity commercial mercial
Coal Oil gas Hydro Total energy energy Total
(mn tons) (bn m3) -- (TWh) --
Primary Production 635 106 15 50 n.a.
Net consumption 630 89 15 n.a. 282
Power system 111 17 2 n.a. 43
Industry 385 43 13 n.a. 184
Transport 25 14 n.a. 1
Agriculture and
other .. 14 n.a. 38
Domestic and
commercial 109 1 n.a. 15
Exports 5 17 n.a.
-------------------------- (Mtce) --------------------------
Primary production 454 155 19 21 n.a. 649 250 899
Net consumption 451 130 19 n.a. 119 621 250 871
Power system 71 25 2 n.a. 18 18 0 18
Industry 289 62 17 n.a. 78 446 n.a. 446
Transport 12 21 .. n.a. 1 34 n.a. 34
Agriculture and
other .. 20 .. n.a. 16 36 n.a. 36
Domestic and
commercial 79 2 .. n.a. 6 87 250 337
Exports 3 25 .. n.a. .. 28 - 28
Notes: Mtce defined as 7 million kcal. Calorific values assumed as follows:
Coal (overall) 5,000 kcal/kg
Coal (used in power plants) 4,476 kcal/kg
Coal (used in industry) 5,250 kcal/kg
Coal (used in railways) 3,370 kcal/kg
Coal (remaining) 5,090 kcal/kg
Crude oil and oil used in power plants and industry 10,200 kcal/kg
Oil used in other sectors & refined product exports 11,400 kcal/kg
Natural gas 9,310 kcal/m3
Hydro and electricity 2,954 kcal/kWh
Double-counting of electricity and the primary energy forms from which it is
produced has been avoided in arriving at totals. The power system's electricity
consumption is composed of transmission losses (11 Mtce) and generating plant
uses (7 Mtce). The contribution of thermal power plants with a capacity of
under 6 MW (4.1 Mtce or 3.4% of total electric output) is assumed to be produced
at the same heat rate as production from larger plants, using the same propor-
tions of coal, oil, and natural gas.
Sources: Ministries of Coal Industry, Electric Power, Petroleum Industry,
and Railways, and mission estimates.
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1970 prices and invested an average of about $7-8 billion per year /1 in
1978/79, or nearly 3% of GNP. In other developing countries, investment in
the energy sector is estimated to have averaged about 1.7% of GNP in 1980./2
The distribution of energy investments appears to differ from that of
other developing countries, although the data may reflect differences in
accounting practices as well as in substance. Electric power, for instance,
absorbs only about 40-45% of sectoral investment,/3 in contrast with 75-80%
in many other developing countries. Energy exports (virtually all oil
exports) in 1980 appear to have been worth $4-5 billion (about 25% of total
merchandise exports). Employment in the sector totals about 6 million
workers, over 4 million of whom work in the coal industry.
Historic Growth Rates
1.05 From 1952 to 1975 energy production grew at about 10.5 % p.a., but
in the last five years the growth rate has been only 5.6%. Total production
actually declined by 1.3% in 1980 from the 1979 level (from about 649 to 641
Mtce). Output fell by 2.4% in coal, 0.2% in crude oil, and 1.7% in natural
gas, while electricity output rose by 6.6%, with the help of a 16.1% increase
in hydroelectric output./4 Table 1.2 shows key energy production growth rates
for 1952-80.
/1 These numbers include petroleum refining. The investment figures are as
reported by the ministries concerned and converted at Y 1.5 = $1.0. They
may include more housing, social services and machine-supplying industrial
investments, but less transportation infrastructure expenditure, than
would be included in Western practice. Also, Chinese prices seem to
exaggerate the value of industrial goods relative to GNP; but this might
not be true on average in this case.
/2 Derived from World Bank, Energy in the Developing Countries, August 1980
estimate of investment and WDR, 1980 GNP estimates. The projections in
these reports imply that energy investment in other developing countries
will, however, need to be raised to 2.5%-3.0% of GNP by the late 1980s.
/3 Based on the total for electric power; petroleum exploration, development
and refineries; and coal.
/4 See Annex D, "Challenges and Achievements in Industry," Table 1.2, and
(for hydroelectric growth) this Annex, Tables A.1 and A.19.
-4-
Table 1.2 ENERGY PRODUCTION GROWTH RATES, 1952-80
(% p.a.)
Natural Total
Period Electricity /a Hydro Coal Oil /b gas primary /c
1952-65 18.7 17.6 10.1 28.5 46.2 10.9
1965-70 11.4 14.5 8.8 22.1 20.9 10.6
1970-75 11.1 18.4 6.4 20.2 25.3 9.5
1975-80 8.9 4.1 5.2 6.6 10.0 5.6
1952-80 14.2 14.7 8.3 21.7 30.7 9.6
/a Hydro and thermal.
/b Includes shale oil.
Th Includes hydro but not thermal electricity.
Source: Table A.1
1.06 Coal production grew at an average annual rate of over 8% p.a. over
the period, and yet fell in relative terms from over 97% of primary energy
production in 1952 to 69% in 1980. Over the same period, oil production grew
at an average rate of nearly 22% p.a. and moved from 1.3% to 24% of total
primary production. Hydro and natural gas production also grew rapidly, but
in 1980 these sources still contributed only 3.8% and 3%, respectively.
Table 1.3 shows how the relative shares of the various sources of primary
energy have evolved since 1952.
Table 1.3: COMPOSITION OF PRIMARY ENERGY PRODUCTION, 1952-80
(%)
Coal Oil Natural gas Hydro
1952 97.6 1.3 .. 1.1
1957 95.7 2.2 0.1 2.0
1965 88.1 8.8 0.8 2.3
1970 81.6 14.4 1.2 2.8
1975 70.5 23.0 2.4 4.1
1980 69.1 24.1 3.0 3.8
Source: Table A.1.
-5-
Reserves
1.07 The known reserves of coal and hydroelectric potential are very
large and should allow considerable expansion of production, while those
for oil and gas development are quite limited in relation to current
production rates. Coal and lignite reserves are estimated at about 600 bil-
lion tons (416,000 Mtce), while exploitable hydro potential is estimated at
1.9 trillion kWh/yr (81,000 Mtce). Our best but very uncertain estimates of
known oil and gas reserves, based on the limite d information available, are
1.8 billion tons (2,720 Mtce) and 130 billion m (175 Mtce), respectively.
Information on nuclear fuel reserves is not available. Table 1.4 shows the
estimated distribution of coal, oil, gas and hydroelectric resources.
Table 1.4: REGIONAL DISTRIBUTION OF RESERVES
(Mtce)
Recoverable Exploitable
coal and hydro- Recoverable Recoverable
Region lignite electric oil gas Total
Northeast 13,500 1,600 1,095 33 16,200
North 273,900 1,000 570 7 275,500
Subtotal 287,400 2,600 1,665 40 291,700
East 29,100 2,900 375 18 32,400
Central-South 15,600 12,600 120 3 28,300
Subtotal 44,700 15,500 495 21 60,700
Northwest 39,000 8,000 540 20 47,600
Southwest 45,000 55,100 20 94 100,200
Subtotal 84,000 63,100 560 114 147,800
Total 416,100 81,200 2,720 175 500,200
Notes: Coal is assumed to average 5 million kcal/ton and lignite 3.33
million kcal/ton. Hydro reservoir life is assumed as 100 years.
Shale is not included.
Soutces: Tables 2.1, 3.4 and A.24.
1.08 Geographical considerations inhibit the development of many of
these resources. While coal resources are widespread, the largest and
richest deposits are concentrated in the north. This results in a need to
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balance the higher cost of mining the lower grade coal generally found in the
south against the transportation costs involved in supplying southern markets
from northern mines. Some 70% of the hydroelectric potential is in the south-
west region, principally Xizang (Tibet), 2,000 km from the major Chinese
markets. In the petroleum subsector, about 75% of the proven reserves are in
fields in the northeast or within about 200 km of the Bo Hai; these fields are
linked to markets as far south as Nanjing by pipeline. Exploration for and
development of reserves in the northwest has been much less thorough due to
transportation and logistical problems. The current geographic distribution
of coal and oil production is illustrated in the maps at the end of this
Annex: IBRD 15627R and 15628R.
Technology
1.09 Oil production has decelerated in recent years, in part because of
the out-of-date technology used and the modest rate of discovery. Use of
equipment and techniques considered out of date in many other countries is
also apparent in the coal and electricity subsectors; while this may increase
costs, it does not appear to hold back production as much as in the oil
industry.
1.10 In some areas, however, China has developed a technological lead.
One is the extraction of oil from shale, for which a simple and effective
technique is in use on a significant scale. Another is biogas, which has been
developed on a scale unparalleled elsewhere - some 7 million digestors, each
capable of meeting the cooking and lighting needs of a household of 5 people,
were reported to have been built by 1979. Yet another may be small-scale
hydroelectric power plants, which in rural areas have the advantages of faster
construction, low demands on trained manpower, and modest transmission costs;
some 90,000 (with an average capacity of about 80 kW) are estimated to be in
operation, and the numbers and capacity are being rapidly expanded.
Institutions
1.11 Fragmentation of responsibilities may impede the development and
implementation of coherent policies in the sector. The institutions primarily
concerned with commercial energy are the Ministries of Coal Industry,
Petroleum Industry and Electric Power, and the Energy Commission recently
created to coordinate their activities./l Except for this new commission,
/1 Energy ministries have been alternately consolidated and fragmented
throughout the last 30 years. Coal and petroleum were under the same
ministry as recently as 1975. The most recent changes have been the
separation of the Ministry of Chemical Industry from that of Petroleum
Industry (1978), and of Water Conservancy from that of Electric Power
(1979), and the creation of the Energy Commission (1980).
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their activities are generally confined to energy supply. Allocation and
pricing of energy are the responsibilities of state and lower level economic
commissions, materials distribution bureaus, and pricing bureaus.
1.12 The respective roles of the central ministries vis-a-vis
provincial and local authorities vary among the three principal subsectors.
Petroleum is the most centralized, with all onshore oil and gas fields
controlled from Beijing by the Ministry of Petroleum Industry. By contrast,
roughly 40% of coal is produced by small mines controlled at or below the
provincial level, and even large mines report both to the Ministry of Coal
Industry and the provincial government. For electric power, five regional
grids come under the direct supervision of the Ministry of Electric Power,
while other systems are under the dual control of the provincial government
and the Ministry.
1.13 Other ministries also play important roles in the sector. The
Ministry of Railways handles about two thirds of the coal and most of the
refined petroleum production; conversely, coal and oil together account for
over 40% of the total tonnage carried by rail. Large volumes of coal and oil
are also moved via coastal and inland waterways by ships operated by the
Ministry of Communications. The Ministry of Chemical Industry operates a
number of refineries, which produce a considerable volume of fuels as well as
petrochemical feedstocks. The Ministry of Water Conservancy has a role in
water management and, thus, hydro development. The Ministry of Geology is
active in the surveying of mineral resources, and some of its activities seem
to overlap or compete with those of the Ministries of Coal and Petroleum
Industry. While the three energy producing ministries manufacture much of
their own equipment, some equipment is also bought from the Ministries of
Machine Building or imported via the Ministry of Foreign Trade, which also
handles oil and coal exports.
Investment Planning
1.14 The investment planning system and project design and evaluation
criteria used in the energy sector appear to vary somewhat among ministries
and provinces. The task of obtaining information on planning procedures and
criteria was further complicated by the present process of reform, which has
so far affected some aspects more than others. The description below
attempts to summarize the situation in 1980, but may be oversimplified;
further changes are likely as economic reforms are instituted.
1.15 The main focus of investment planning in the coal and oil industries
is the annual plan. Some longer term plans, covering 5-10 year periods,
are used in formulating the annual plans and others are being prepared, but
they seem to be the exception. The basic administrative unit in the planning
system is the bureau or administration responsible for an individual coal
mine or oil field or, in some cases, for a group of mines or fields located
near one another and managed as a unit. Proposals for projects are prepared
at this level and, if they exceed a specified size, submitted to a higher
authority (provincial coal bureau or the Ministry of Petroleum Industry) in
the fall of the year preceding proposed implementation. A geological report
and preliminary project design would generally (in the case of coal) or
sometimes (in the case of petroleum) have been approved earlier, so
processing of the annual plan is concerned primarily with allocations of
budgetary resources and key construction materials.
1.16 In the electric power industry, five-year plans are in general use.
They cover individual grids and are developed by the respective regional and
provincial power bureaus. Major projects are subject to approval by the
Ministry of Electric Power and the State Planning Commission (SPC). The
process is a two-stage one, with an initial approval required for detailed
design work and a second approval required to implement a project. Project
selection is based on "payback" periods rather than present worth analysis.
Also, the concept of the least-cost sequence of projects for developing the
entire system over a period of time is not applied.
1.17 The function of "balancing" resource availability against project
proposals is carried out within the three energy supply industries by the
respective ministries, and across sectors by the State Planning and Capital
Construction Commissions./1 Only a few months (in some cases, a few weeks)
are allowed for this process, and as the Energy Bureau of the SPC has only
about 30 professional staff, it seems unlikely that detailed analysis can be
made of a large number of alternatives.
1.18 With such a planning system, problems are likely to arise from the
limited time horizon, the few alternatives considered, and the limited
geographic and jurisdictional scope of most planning work. Focusing
attention primarily on annual planning can produce two kinds of problems.
First, it may result in use of short-term expedients, such as neglect of
tunnelling and other development work in coal mines and excessively rapid
depletion of oil reserves. This appears to have happened to a certain
extent. Second, in investment programs, the preoccupation with current
output may lead to a focus on current investment levels, but little concern
about channeling investment into projects that will yield benefits earlier
rather than later. This seems to be reflected in long construction periods
and in the very long production lives planned for many mines.
1.19 The isolation of planning within ministries, the limited number of
alternative studies and the short time allowed central authorities to deter-
mine the best combination of investment projects must often result in failure
to study adequately solutions to problems that cross the lines of geograph-
ical or ministerial jurisdictions. The creation of the Energy Commission
can be expected to improve this situation in some respects, e.g. coordination
of coal and electric power planning. Other closely related sectors, such as
railways and chemical industries, however, do not come under this commission,
and analytical methods that link sectoral plans across jurisdictional lines
do not seem to be in general use. It would, of course, be useful to link
/1 The Energy Commission will presumably become an intermediate step.
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railway planning with the planning for coal and for highways, and to link
chemical industry planning with petroleum and agricultural planning, but
without putting all these sectors under the same commission. Shadow prices,
i.e. estimates of the value to the economy of key commodities such as
capital, foreign exchange, and fuel that are used to provide a consistent
basis for planning in all sectors (but not in financial accounting), could
be used to provide the needed intersectoral links in planning.
1.20 The choices among projects and of technical design and operating
standards for projects would also seem to offer scope for raising outputs and
lowering costs. The mission visited, for example, a number of installations
with what appeared to be an excessive amount of underutilized and stand-by
equipment. Improving performance in this area nay require less fundamental
changes than those required to implement comprehensive sector planning.
Aspects of project selection and design that may merit attention include:
(a) generation of an inventory of investigated projects and project
design alternatives that is sufficiently large to allow selection
of the most economically attractive alternatives;
(b) the computation of economic indices (such as net present value,
benefit-cost ratio, or internal rate of return) that can assist in
the allocation of scarce resources to their most productive use;
(c) comparison of costs and benefits under a variety of project design
alternatives and equipment types; and
(d) the balance made by project designers between operating reliability
and return per unit of invested resources.
Pricing
1.21 Despite recent (1979) rises in natural gas and coal prices to non-
household users (25% for gas, 29% for coal), the prices of several forms of
energy - including fuel oil, coal, crude oil and industrial electricity -
are at the official exchange rate still well below international prices
(Table 1.5). Equally important, the current relative prices of different
forms of energy are inappropriate - for example, encouraging the use of
heavy oil rather than coal for fuel. However, prices of a few energy
produces - gasoline, kerosene and electricity for household lighting - are
now above international trade prices.
- 10 -
Table 1.5: PRICE COMPARISONS
Average Price in inter-
Unit Chinese price national trade
Coal (7,000 kcal/kg) $/ton 19-33/a 41/a
Crude oil $/ton 90 250
Gasoline, 70 oct. $/ton 533 310/b
Kerosene $/ton 453 3607
Diesel fuel $/ton 280 3207b
Heavy fuel oil $/ton 37 220
Electricity ¢/kWh 4.3 5.2/c
Average household lighting c/kWh 10-13 5.27
Average heavy industry c/kWh 4.0 5.2T7
/a The Chinese price is ex-mine, while the international price is
f.o.b. Australia.
/b Retail prices in many countries are much higher than this due primarily
to excise taxes.
/c Estimated cost of 'electricity from large, coal-fired plants with 1980
investment and fuel costs. Tariffs in many countries are considerably
lower than this.
Note: Average prices were only available for the principal petroleum products
and for electricity; from indirect indications, crude oil is priced
at Y 135/ton and coal at Y 35/ton (raw, equivalent to Y 49/ton of
standard coal, at the mine mouth). Chinese prices were converted at
Y 1.5 = $1.0.
Sources: Ministries of Petroleum Industry and Electric Power, and mission
estimates.
1.22 The extent to which these prices affect the level or composition
of energy supply and demand is not clear, however, as fuels and electricity
are distributed through a system of administrative allocation. The general
use of low-octane gasoline rather than diesel in trucks apparently reflects
the availability of these fuels and of trucks with the two types of engines
rather than the relative fuel prices. Similarly, the substantial use of
crude oil as a fuel goes against a price disadvantage of more than 2:1 in
favor of fuel oil. Nor is the low rate of refinery utilization (about 82%)
directly explainable by the oil price structure; in spite of the low fuel
- 11 -
oil price, refining operations appear highly profitable (Y 1.0 of crude oil
is refined into about Y 2.6 of products)./l
1.23 The setting of prices appears to be separated from annual economic
plan management or investment planning. While no explicit statement of
price-setting principles was given, the history and structure of prices
indicate that price stability is given a high priority; that the accounting
cost of domestic production is given greater weight in price setting tlhan
the opportunity cost in overseas markets; that wide profit margins are built
into prices of products for use outside of the industrial sector, while this
is less true for the intermediate products consumed primarily by industry;
anti t:hat some effort is made to achieve geographic uniformity of prices.
1.24 Energy pricing appears to be used in China primarily to generate and
distribute revenues rather than to influence supply and demand. Data are not
directly available on the value of energy producton and conversion in current
prices, but in 1970 prices, gross output in 1979 was as follows:/2
Production: Coal Y 11.6 bln
Oil & gas 2.8
Hydroelectricity 3.2
Subtotal 24.6
Conversion: Oil refining 15.2
Thermal elec. generation 14.5
Subtotal 29.7
Based on the prices shown on Table 1.5, revenues from coal, oil and gas would
now be considerably higher, while those from electricity would be slightly
lower than this, for an overall total in the order of Y 60 billion. Little
is known about the distribution of these revenues. The sector's annual wage
bill appears to fall somewhat short of Y 5 billion. Investment from the state
capital construction budget averaged about Y 11 billion p.a. in 1978 and 1979.
Some fraction of the remainder pays for material current inputs to operations,
but the bulk is presumably remitted as taxes and profits to the provincial and
national governments.
/1 There may be an indirect link, however; the profitability of refineries
may have prompted the construction of much capacity in locations where
it cannot now be used because of transport bottlenecks. Alternatively,
the Ministry of Foreign Trade may prefer exporting crude oil, which is
much cheaper internally than externally, though it also exports gasoline
and middle distillates, which it buys at prices well above their export
values.
/2 Based on Annex D, Table 1.4, with electricity divided in proportion to
1979 production (17.8% hydro and 82.2% thermal).
- 12 -
Energy Consumption in Relation to GNP
1.25 China's per capita consumption of commercial energy is about
3-1/2 times the average of other low-income developing countries, one third
short of the middle-income average, or 25-30% above the average of all
developing countries. This level of consumption of commercial energy is
very high in relation to economic activity: about 2.5 times as much per
unit of GNP as the average for other developing countries (Table 1.6) or
for industrialized market economies, and about 1-1/2 times the average for
other centrally planned economies.
Table 1.6: ENERGY INTENSITY OF MAJOR
DEVELOPING COUNTRY ECONOMIES, 1978
(Kgce commercial energy consumption per $ GNP)
China (1979)/a ..................... ................... 2.5
Bangladesh ............................................ 0.5
Ethiopia .............................................. 0.2
Burma .... ............................................. 0.5
Viet Nam ..................................................... 0.7
India . ................................................. 1.1
Pakistan .............................................. 0.9
Indonesia ............................................. 1.2
All low-income countries lb .......... ... .............. (1.0)
Egypt ................................................. 1.4
Thailand .............................................. 0.8
Philippines ... ........................................ 0.7
Nigeria ............................................... 0.2
Korea, Rep. of ........................................ 1.3
Turkey ... ............................................. 0.7
Mexico ................................................ 1.1
Brazil ................................................ 0.6
Spain ................................................. 0.8
All middle-income countries /b ....... ................ (0.9)
All developing countries except China /b .............. (1.0)
/a Based on 1979 estimates of 621 Mtce, $260/capita and 965 million
people at mid-year; 1978 ratio was probably slightly higher.
/b Country groups as defined in World Bank, WDR, 1980.
Note: The countries listed have a population of 30 million
or more. The listing of countries other than China is
in ascending order by estimated GNP per capita.
Sources: Energy consumption data from World Bank, Economic
Analysis and Projections Department Data Base.
Population and per capita GNP data from World Bank,
World Economic and Social Indicators, October 1980.
- 13 -
1.26 Our present knowledge allows only a tentative analysis of the appar-
ently very high rate of energy consumption to GNP. The low share of liquid
fuels and electricity and the high share of coal may force consumers to use
coal-fired technologies, which often have a low energy efficiency. It may be
noted, for instance, that the energy-intensive East European economies also
rely heavily on coal. The example of India, however, which approaches China
in dependence on coal (60% of consumption, as compared with China's 72%),
suggests that this is not an important part of the explanation, inasmuch as
India-s energy consumption is about 1.0 kgce per $ of GNP (1979), while
China's is about 2.5 kgce/$ (or 2.2 kgce/$ if coal used in households is
excluded to adjust for the generally harsher climate). China's per capita
consumption of motor fuels and electricity combined is almost double that of
Indonesia or India,/l so the Chinese economy does not seem to be short of
premium energy forms relative to other countries at its income level.
1.27 Since industry (particularly heavy industry) is generally more
energy intensive than other sectors, part of the reason for China's higher
energy consumption is probably the higher shares of industry in total output
and of heavy industry (which accounts for four fifths of all industrial elec-
tricity consumption) in industrial output. But when allowance is made for the
unusual internal price structure in China, the share of industry in GDP,
though about 10 percentage points above the average for other low-income
countries, is probably close to the average for middle-income countries. A
comparison with India shows that while China-s industrial sector is about
roughly three to four times larger (in tons of steel, basic chemicals and
cement, as well as in its contribution to GDP),/2 it consumes about six times
as much energy. Similarly, China's energy-to-GDP ratio is well above that of
middle-income countries with large heavy industry sectors such as the Republic
of Korea (1.1 kgce/$ in 1979) and Turkey (0.6 kgce/$), despite lower
urbanization and less energy-intensive agriculture.
1.28 Thus, the macroeconomic data (buttressed by a variety of microecon-
omic evidence) suggest that China uses energy - especially in industry - a
good deal less efficiently than other developing countries. One underlying
reason has been inadequate access to foreign equipment (and know-how), which
embodies the substantial progress made in fuel-saving techniques over the past
three or four decades. More important, however, has been the lack of incen-
tives to economize on energy: as with other materials, enterprise managers
until very recently have had little reason to limit the energy use of their
equipment, or to demand new and more fuel-efficient models from their sup-
pliers - who in turn have been under little pressure to undertake appropriate
/1 Comparison refers to combined consumption of motor diesel, gasoline,
and electricity, with electricity counted at 270 g/kWh.
/2 See Annex D, Tables 1.5 and 1.6.
- 14 -
research and innovations. This situation is now changing; and major energy
savings were recorded in 1979 and 1980./l
Prospects
1.29 Official projections are not available for most of the variables
involved in estimating future energy production-consumption balances. How-
ever, the information available indicates that China may well be a net
importer of oil by 1990, and that slow-growing energy supplies will be the
most serious constraint on China's growth rate in the 1980s. This situation
(discussed in its broader context in Chapter 6 of the Main Report) can be
better understood with the help of quantitative estimates designed to indicate
the magnitude of the potential problem and its sensitivity to alternative
policies and conditions. In the paragraphs that follow, four alternative
cases or sets of assumptions are presented, one for each of the possible com-
binations of two alternative sets of estimates of economic growth rates and of
coefficients measuring the effectiveness of energy conservation efforts. At
least one of these cases implies coal and oil imports at levels beyond the
capacity of the ports and other infrastructure involved and total imports at
unaffordable levels. While not plausible as predictions, these cases none-
theless illustrate that certain combinations of planning targets, which may be
reasonable taken individually, may be unworkable. More generally, the scen-
arios help to show the potential contribution of energy saving to China's
growth and trade prospects in the 1980s.
1.30 Depending on the scenario chosen, the balance of trade in energy
deteriorates from net exports valued at about $4.7 billion in 1980 to, in the
best case from the point of view of minimizing energy consumption, exports of
about $4 billion in 1985 and $2.3 billion in 1990 (in 1980 dollars). Two
other cases have net imports of $3.7-4.7 billion in 1990, while the worst case
has net imports already in 1985 and impossible import levels in 1990./2 Table
1.7 summarizes the results of the four cases in terms of the 1985 and 1990
energy trade balance, while Table 1.8 shows much of the detail. The assump-
tions and methodology used are described below.
1.31 The prospect of a deterioration in the energy trade balance is
largely the result of declining oil production and continued growth of demand.
The oil production level of 104-106 million tons p.a. reached in 1978 and
maintained through 1979 and 1980 appears to represent at least a temporary
peak. In the projections, production is assumed to drop to 100 million tons
by 1985 and 95 million tons in 1990. The latter level, especially, is very
uncertain (paras. 3.12-3.15).
/1 See Annex D, para. 3.13.
/2 Figures are in 1980 dollars, but with prices adjusted for expected real
price increases.
- 15 -
Table 1.7: ALTERNATIVE ESTIMATES OF 1985 AND 1990 OIL AND COAL BALANCES
Moderate growth scenarios Faster growth scenarios
Mod. savings High savings Mod. savings High savings
1985 1990 1985 1990 1985 1990 1985 1990
Quantity (million tons)
Coal 20/a 16 20/a 40/a (21) (108)/b 20/a 19
Oil 1.3 (16.9) 11.3 1.1 (3.8) (32.1)/b 6.5 (13.9)
Value ($ billion)/c
Coal 0.8 0.8 0.8 1.9 (0.8) (5.1)/b 0.8 0.9
Oil 0.4 (5.5) 3.2 0.4 (1.1) (10.5) 1.8 (4.6)
Total 1.2 (4.7) 4.0 2.3 (1.9) (15-6) 2.6 (3.7)
* Negative balances in parentheses.
/a Assumed to be constrained by port facilities.
/b Believed to be infeasible due to foreign exchange and transport bottlenecks.
/c Average "real" prices in 1980 dollars assumed to be: $280/ton and $328/ton for oil,
and $40/ton and $47/ton for coal, in 1985 and 1990, respectively.
Sources: Table 1.8 and staff estimates.
- 16 -
Table 1.8: CONSTRUCTION OF 1985 AND 1990 OIL AND COAL BALANCE ESTIMATES
Base Moderate growth scenarios Faster growth scenarios
year Moderate savings High savings Moderate savings High savings
1980 1985 1990 1985 1990 1985 1990 1985 1990
Oil Balance (mln tons)
Power generation 16.5 12.5 8.5 10.5 4.5 12.5 8.5 10.5 4.5
Other heavy industry 27.5 27.7 32.3 24.5 26.9 29.5 36.0 26.2 30.9
Light industry 8.0 10.7 14.3 10.1 12.7 11.2 16.4 10.6 14.7
Transportation 14.0 19.5 28.0 19.2 26.8 21.2 34.2 20.8 33.1
Agriculture and construction 15.0 18.5 22.6 18.3 22.0 19.1 24.4 l1.9 23.6
Interfuel substitution
outside power 0.0 0.0 -4.0 -2.0 -6.0 0.0 -4.0 -2.0 -6.0
Refining losses 8.0 9.8 10.2 8.1 7.0 10.3 11.6 8.5 8.1
Total consumption 89.0 98.7 111.9 88.7 93.9 J03.8 127.1 93.5 108.9
Production 106.0 100.0 95.0 100.0 95.0 100.0 95.0 100.0 95.0
Net exports (imports) 17.0 1.3 (16.9) 11.3 1.1 (3.8) (32.1)/a 6.5 (13.9)
Coal Balance (mln tons)
Power generation 117 157 220 154 209 171 256 162 233
Other heavy industry 305 307 358 272 299 327 408 290 342
Light industry 65 87 116 82 104 91 133 86 119
Transportation 25 29 33 28 32 29 36 29 35
Household and commercial 107 124 146 117 122 130 164 123 137
Interfuel substitution
outside power 0 3/b 11/b 7/b 15/b 3/b 11/h 7/h 15/b
Total consumption 619/c 707 884 660 781 750 1,008 697 881
Production 606 727/d 900 680/d 821/d 730 900 717/d 900
Net exports (imports) 6 20/d 16 20/d 40/d (20) (108)/a 20/d 19
Electricity Consumption (bln kWh)
Electric power system 45.0 53.4 67.2 50.0 59.4 56.2 75.5 51.6 64.4
Other heavy industry 160.0 181.0 231.0 174.7 213.3 194.7 266.8 184.3 238.9
Light industry 48.0 73.1 105.2 69.3 95.1 77.3 124.5 72.8 110.4
Agriculture 27.0 34.7 45.8 33.9 43.6 36.1 49.7 35.1 47.0
Services and households 20.6 26.2 35.0 25.2 32.2 26.9 37.9 25.7 34.3
Total consumption 300.6 368.4 484.2 353.1 443.6 391.2/e 554.4 369.5 495.0
Hydro production 58.2 75.0 104.0 75.0 93.9 75.0 115.8 75.0 106.4
Natural Gas Production/Consumption
(bln cu m) 14.3 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0
Overall Balance (Mtce)
Primary energy production 640.9 712.6 841.0 677.5 779.6 714.8 846.1 705.5 842.2
Consumption 615.4 696.4 854.3 646.7 750.3 735.3 970.0 681.7 848.P
Net exports (imports) 25.5/c 16.2 (13.3) 30.8 29.3 (20.5) (123.9)/a 23.8 (6.6)
/a Believed infeasible due to constraints on foreign exchange and transport facilities.
/b Includes 3 million tons as replacement for natural gas.
/c Assumed to include 5 million tons (2.9 Mtce) taken from stocks.
/d Assumed to he constrained by available port facilities.
/e Probably infeasible due to constraints on electrical generation, transmission, and distrihution facilities.
- 17 -
1.32 The energy demand projections are derived from estimates of the
growth rates of the principal energy-consuming sectors of the economy and
coefficients representing energy consumption per unit of output in each
sector. In some cases, different coefficients are applied to "base" levels of
output (equal to 1980 levels) and to incremental output in the 1980-85 and
1985-90 periods. In the two industrial sectors (heavy and light), the same
coefficients are applied to oil and coal consumption; interfuel (coal for oil)
substitution is estimated separately. Estimates of electric power system fuel
consumption and refining losses are derived after estimating final demand for
electricity and refined petroleum products.
1.33 The selection of "sectors" among which total demand is divided
varies somewhat according to the energy form. Thus transportation is
treated as a separate sector for estimating coal and oil demand, but not
for electricity demand./l
1.34 The two sets of economic growth projections are labelled "moderate"
and "faster." Under the moderate growth scenarios, GDP grows at 4% p.a. from
1980 to 1985 and 5% p.a. from 1985 to 1990. GDP growth under the faster
growth scenarios is 5% in 1980-85 and 6% in 1985-90. Growth rates over the
two five-year periods by sector are shown in the following page.
/1 The sectoral division used is as follows:
Oil demand Coal demand Electricity demand
Heavy industry /a Heavy industry /a Heavy industry /a
Light industry Light industry Light industry
Transportation Transportation Agriculture
Agriculture and Household and commercial Services and households
construction Power generation Power system use and
Power generation losses
Refining losses
/a Exclusive of electricity generation and (in oil) petroleum refining.
The 1980 energy balances, compared to those for 1979 on Table 1.1, trans-
fer some of the agricultural demand for electricity to industrial or
household uses. Guesswork is used for other changes from 1979 to 1980.
The results are merely intended to illustrate the orders of magnitude
involved.
- 18 -
Moderate growth Faster growth
1980-85 1985-90 1980-85 1985-90
------ Growth rates (% p.a.) --------
Heavy industry 2.5 5.0 4.0 6.5
Light industry 7.0 6.0 8.0 8.0
Agriculture 3.0 3.0 3.5 3.5
Services and other 4.5 5.5 5.0 6.5
Total GDP /a 4.0 5.0 5.0 6.0
/a Rounded to nearest 0.5.
1.35 In most sectors the underlying demand (adjusting for efficiency
improvements) is assumed to grow at the same rate as the corresponding
component of GDP. In some sectors, however, different growth rates are used.
Thus, the underlying demand for oil in agriculture and construction is assumed
to grow at 1.5 times the annual rate of agricultural output. The underlying
demands for oil and coal in transportation are assumed to grow at 1.8 and 0.7
times the GDP growth rate, respectively. These coefficients represent
increased mechanization and use of irrigation in agriculture and increasing
use of trucks and diesel railway locomotives. The underlying demand for coal
for household and commercial use is assumed to grow at the same rate as GDP.
(However, the electricity demand of the services and household sector is
assumed to grow at the same rate as the "services and other" component of
GDP.) Where they differ from sectoral growth rates, these derived growth
rates are as follows:
Slow growth Faster growth
1980-85 1985-90 1980-85 1985-90
------ Growth rates (% p.a.) --------
Oil/agriculture and construction 4.50 4.50 5.25 5.25
Oil/transportation 7.20 9.00 9.00 10.80
Coal/transportation 2.80 3.50 3.50 4.20
Coal/household and commercial 4.00 5.00 5.00 6.00
- 19 -
1.36 Conservation of oil and coal in the final demand sectors (refinery
and power system requirements are handled separately) is reflected in
coefficients relating demand for each fuel per unit of output in each sector
to "base" (1980 level) output and to the increments added to annual output
over the 1980-85 and 1985-90 periods. The coefficients assumed for unit fuel
consumption on "base" output reflect improvements in existing plant and the
shifting of production from less efficient to more efficient plants and are as
follows:
Moderate savings High savings
1985 1990 1985 1990
Heavy industry 0.90 0.85 0.80 0.70
Light industry 0.95 0.95 0.90 0.85
Household and commercial 0.95 0.90 0.90 0.75
Others 1.00 1.00 1.00 1.00
1.37 The coefficients for unit fuel consumption on incremental output are
generally lower (i.e. energy savings are greater at the margin), reflecting
the assumption that greater efficiency can be more easily achieved by intrdd-
ucing new equipment (or expanding output from selected existing equipment)
than by upgrading the energy efficiency of existing equipment. In light
industry and in the household and commercial sector, however, the coefficients
shown above for base year output are also applied in 1985 and 1990 to all out-
put, including increments between 1980 and 1985. In other cases, the amount
of energy use associated with the 1980-85 increment in output remains the same
in 1990 and in 1985. The coefficients used are as follows:
Moderate savings High savings
1980-85 1985-90 1980-85 1985-90
Heavy industry 0.80 0.70 0.70 0.60
Transportation 0.95 0.90 0.90 0.80
Agriculture and construction 0.95 0.90 0.90 0.80
1.38 In electric power demand, the assumptions used imply few major
savings possibilities, except in power transmission and possibly in other
heavy industry (where metallurgy and chemicals are the principal users).
Elsewhere, modernization of China's economy is expected to result in
gradually higher ratios of electricity consumption per unit of output,
- 20 -
despite efforts to economize. This is consistent with 1977-79 experience.
The coefficient of electricity usage per unit of "base" output is 1.00 in all
sectors./l The coefficients on incremental output are as follows:
Moderate savings High savings
1980-85 1985-90 1980-85 1985-90
Power system losses 0.9 0.8 0.6 0.7
Heavy industry 1.0 1.0 0.7 0.8
Light industry 1.3 1.3 1.1 1.1
Agriculture 1.8 2.0 1.6 1.8
Services and households 1.1 1.1 0.9 0.9
1.39 Interfuel substitution outside of the power sector is accounted
for separately./2 In all scenarios, and in both 1985 and 1990, we assume
that 3 million tons of coal will be needed to make up for a decline in
production of natural gas. Additional coal will be used to substitute for
oil; we assume the amounts involved (in millions of tons p.a.) are as follows:
Oil coILsumption Coal consumption
Scenario 1985 1990 1985 1990
Moderate savings 0 -4 0 +8
High savings -2 -6 +4 +12
/1 However, once the 1985 demand for electricity has been computed for each
sector and scenario, these figures become the new base for computing
demand in 1990. To illustrate this method of calculation, if a sector
uses 200 units of electricity in 1980, its output grows by 50% in 1980-85,
and its incremental coefficient is 1.2, its incremental output in 1980-85
will require 120 units of electricity (50% of 200 = 100 x 1.2); thus it
will require a total of 320 units in 1985. If its output then grows by
another 50% from 1985-90 while its incremental coefficient rises to 1.5,
its demand for electricity will grow by 240 units (50% of 320 = 160 x
1.5), to 560 units in 1990. The growth of demand in the power system,
used in computing incremental power system losses, is calculated based on
electricity demand growth in the other (user) sectors combined.
/2 See para. 1.41 regarding substitution in the power sector.
- 21 -
1.40 Energy consumption in the final demand sectors, computed according
to the assumptions discussed above, is used for projecting consumption in the
energy transformation industries, oil refining and electric power. Oil
refining losses are estimated as a fraction of the final demand for oil after
refining. In the moderate energy savings scenario, the figures used are 11%
in 1985 and 10% in 1990. In the high savings scenarios, they are 10% in 1985
and 8% in 1990. By comparison, the equivalent ratio for oil actually refined
in 1979 is assumed (Table 3.1) to have been about 11.8%./l
1.41 In estimating fuel consumption in electric power production, it
is assumed that the use of oil-fired plants will be reduced, as follows:
Base Moderate savings High savings
1980 1985 1990 1983 1990
Net change (mln tons) n.a. -4.0 -8.0 -6.0 -12.0
Oil used (mln tons) 16.5 12.5 8.5 10.5 4.5
Electricity produced (Twh) 57.0 43.1 29.3 36.2 15.6
1.42 Hydroelectric power is assumed to supply 25% of incremental demand
for electricity in each five-year period after 1980, except that an upper
limit of 75 Twh (billion kWh) is assumed for hydroelectric capacity that can
be built by 1985; i.e., a 16.8 Twh increase from 1980-85.
1.43 In all scenarios, all other incremental demand for electricity
after 1985, both to substitute for oil and to supplement hydro output, is
assumed to be met by additional use of coal, with 0.62 tons of coal required
for each Twh. This represents roughly a 10% energy saving at the margin,
compared to the 1979 ratio of about .68-.69 tons required per Twh.
1.44 As an alternative method of presentation, Table 1.9 summarizes
the energy savings and switching assumptions applying to coal and oil.
Here the energy conservation effects in most sectors are expressed as
percentage savings compared to base year ratios of energy consumption.
/1 The actual ratio of refining losses to consumption in 1979 is estimated
(Tables 1.1 and 3.1) at about 10%; but the projected rates imply improve-
ments in refining efficiency, because in 1980 China burned a great deal of
unrefined crude oil. Note also that the projected demand for oil in
sectors that consume primarily light products (transportation, agricul-
ture, and construction) is rising faster than the demand for heavy fuel
oil, implying a need for more cracking and refining per ton in the future.
- 22 -
Table 1.9: SUMMARY TABLE OF ENERGY SAVING AND SWITCHING ASSUMPTIONS FOR OIL
AND COAL IN THE MODERATE AND HIGH ENERGY SAVINGS SCENARIOS /a
Moderate savings High savings
scenarios scenario
1985 1990 1985 1990
Base year power generation switched
from oil to coal (million tons) 4 8 6 12
Other fuel use switched from oil to
coal (million tons, net of switches
to feedstock use) 0 4 2 6
Energy savings on 1980 base output
in heavy industry 10% 15% 20% 30%
Energy savings on incremental output
in heavy industry /b 20% 30% 30% 40%
Energy savings on base and incremental
output in light industry 5% 5% 10% 15%
Energy savings (in coal) on base and
incremental household and commer-
cial demand /c 5% 10% 10% 25%
Energy savings on incremental demand
in transportation, agriculture
and construction /d 5% 10% 10% 20%
Refining loss as a percentage of oil
consumption after refining 11% 10% 10% 8%
/a Not shown is the requirement for coal in power generation, which is
assumed in all cases to be 0.62 million tons of coal for each billion kWh
of added power based on coal.
/b Percentage reductions compared to 1980 ratios of energy use per unit of
output, applied to the increment of the last five years. As an example,
in projecting energy demand in heavy industry in 1990, in the moderate
savings case, the ratio needed to produce the base amount is reduced by
15%, the ratio to produce the 1980-85 increment is reduced by 20% (with
no further reduction after 1985), and the ratio to produce the 1985-90
increment is reduced by 30%, compared to the base ratio.
/c This demand is assumed to grow at the same rate as GDP.
/d Incremental demand projected as in heavy industry but with no reductions
in the requirement to produce the 1980 base output. Demand for oil in
transportation is assumed to grow at 1.8 times the rate (in % p.a.) of
GDP growth (so that 5% GDP growth requires 9% transport growth using
oil); demand for oil in agriculture and construction is assumed to grow
at 1.5 times the rate (in % p.a.) of agricultural growth; demand for coal
in transportation is assumed to grow at 0.7 times the rate (in % p.a.) of
GDP growth.
- 23 -
1.45 In the four scenarios considered (Table 1.8), the total consumption
of energy, including natural gas and hydroelectricity, would rise from the
1980 level of 615 Mtce to between 677 and 735 Mtce in 1985. One scenario
(moderate savings combined with faster growth) would require a physically
unattainable 970 Mtce in 1990, implying net imports of 124 Mtce; while
requirements in 1990 in the other scenarios would range from 750 to 853 Mtce.
1.46 The stringency of the conservation effort required to satisfy
demand levels of the high savings cases is apparent from the implied growth
rates of energy demand, compared to growth of GDP (Table 1.10). For the
decade as a whole, energy consumption would grow at rates 2.2% to 2.4% p.a.
less than GDP, and energy use per unit of final output would be required to
fall by about 20% (i.e. at an average rate of 2.2% to 2.3% p.a.). Even
larger reductions would be required in the use of oil per unit of final
output - by about 30% over the decade (at rates averaging 3.4% to 3.8% p.a.).
Thus the share of oil in total energy consumption would be reduced from 21.1%
in 1980 to roughly 18.5% in 1990.
1.47 These numbers, though only illustrative, indicate that providing the
energy needed to sustain even a 4-5% p.a. economic growth rate over the
coming decade will require a coordinated program of investments involving
energy consumers and transportation infrastructure, as well as energy produc-
tion./l Oil production prospects, especially at Daqing, the largest field,
can be improved by investment in reservoir engineering and the equipment and
training needed to implement it effectively. Investment in coal and electri-
city generation, as well as in related transportation and transmission facili-
ties, will need to be accelerated if energy is to be available in the quanti-
ties and forms needed as alternatives to oil. Energy consumption in general
and oil consumption in particular need to be restrained. To obtain the
required level of conservation in the time required, control through the
central allocation of investment resources and fuels may need to be supplemen-
ted by adjusting the incentives facing provincial, local, and enterprise
officials and workers.
/1 Ilow to do this is discussed in detail in Annex D, paras. 5.05-5.14, and
in Chapter 6 of the Main Report.
- 24 -
Table 1.10: LEVELS OF CONSERVATION IMPLIED IN DEMAND PROJECTIONS
Moderate Faster growth
growth scenarios scenarios
Moderate High Moderate High
savings savings savings savings
Energy consumption (Mtce) 1980 615.4 615.4 615.4 615.4
1985 696.4 646.7 735.3 681.7
1990 854.3 750.3 970.0 848.8
Growth rate of energy 1980-85 2.5 1.0 3.6 2.1
consumption (% p.a.) 1985-90 4.2 3.0 5.7 4.5
1980-90 3.3 2.0 4.7 3.3
Difference between GDP 1980-85 1.5 3.0 1.3 2.8
and energy consumption 1985-90 0.6 1.8 0.3 1.5
growth rates (% p.a.)/a 1980-90 1.1 2.4 0.8 2.2
Elasticity with respect 1980-85 0.63 0.25 0.73 0.43
to GDP /a 1985-90 0.88 0.63 0.95 0.75
1980-90 0.75 0.45 0.85 0.60
Energy savings (%)/a,/b 1985 7.0 13.6 5.9 13.2
1990 9.8 20.7 7.7 19.3
Average savings (%) p.a. 1980-90 1.0 2.3 0.8 2.2
Energy savings in oil 1985 8.8 21.3 8.6 17.7
(%)/a,/b 1990 18.3 31.4 16.4 28.4
Average savings (%) p.a. 1980-90 2.0 3.8 1.8 3.4
Oil as proportion of 1980 21.1 21.1 21.1 21.1
total energy 1985 20.7 20.0 20.6 20.0
consumption (%) 1990 19.1 18.3 19.1 18.7
/a To avoid biasing these ratios, the precise weighted growth rates of GDP
are used here in place of the rates rounded to the nearest 0.5; thus in
the moderate growth case the rates per annum are 4.0% for 1980-85, 4.8%
for 1985-90 and 4.4% for 1980-90, while in the faster growth case they are
4.9% for 1980-85, 6.0% for 1985-90, and 5.5% for 1980-90.
/b Percentage by which projected energy consumption is below the level that
would be reached if it grew at the same rate as GDP from 1980 base.
Sources: Table 1.8 and assumptions explained in text and Table 1.9.
- 25 -
2. COAL
Introduction
2.01 Coal is China's largest indigenous energy resource and at present
meets nearly 70% of demand for commercial energy. In view of the very large
quantity of proven reserves relative to those of oil and gas, coal can be
expected to remain the dominant fuel in the foreseeable future./l Coal
reserves in China are comparable in quantity and grade to those of the USA
and USSR. The known resource base is adequate to meet the present consumption
rate for around 1,000 years, and since exploration of the remoter deposits is
still proceeding, the total of proven reserves is likely to increase still
further. Table 2.1 shows proven reserves by geographical region.
Table 2.1: RECOVERABLE RESERVES OF COAL
(billions of tons)
Regions Coal and Lignite
Northeast 20.0
North 411.3
East 41.8
Central-South 23.7
Northwest 77.1
Southwest 68.6
Total 642.5
Source: Ministrr of Coal Industry.
2.02 Although substantial coal deposits occur in all regions, the north
has by far the largest proportion. In general, the coal deposits in southern
China are of a lower grade than those in the north, but some attempt is now
being made to exploit these lower grade reserves for power generation at the
mine site and to reduce the strain on the transport system.
Organization
2.03 All coal reserves in China are the property of the state, but res-
ponsibility for their development is divided between the central government,
represented by the Ministry of Coal Industry and the provinces. In general,
/1 Reserve estimates appear to be based on extensive drilling and geophysical
surveying, so a high proportion can be regarded as "proven."
- 26 -
the larger mines are operated by the Ministry, and the smaller ones by pro-
vincial, county and commune authorities. The same division of responsibility
applies to the allocation of coal. The Ministry of Coal Industry is also
responsible for many other functions: for instance it runs several educa-
tional facilities offering specialized training for graduate-level students
and workers. It also operates research institutes and facilities for
manufacturing mining equipment (although some equipment is also manufactured
by the Ministry of Machine Building). The Ministry of Coal Industry has a
number of separate departments responsible for, inter alia, labor, finance,
mechanization, local mining (provincial mines), mine safety and
transportation/sales (the latter department allocates coal from the centrally
controlled mines).
2.04 On a geographical basis, the Ministry has 84 coal mining bureaus
responsible to it, 11 of which produce 10 million tons of coal a year or more.
Districts apparently report through the local provincial government. Each
district has a mine bureau and each province its own coal administration
bureau. The separation of centrally organized mines and the smaller mines
operated by provinces, administrative areas, counties and communes seems to be
fairly complete at the working level, since the latter rely on the provincial
coal administration bureaus for materials allocation, technical assistance,
and other matters. Local mines seem to be less well equipped and less well
organized than the centrally managed mines, and their workers are more poorly
paid. Their productivity and the quality of coal produced also appear to be
lower.
Employment Conditions
2.05 Miners pay in state-owned mines seems to be about Y 100 per month,
including allowances, with miners working on mechanized mine faces paid 20%
more than ordinary miners. The general level of pay is set by the Ministry,
but the provincial bureaus have some discretionary power to adjust the rate
for local conditions. Pay systems vary, with some mines paying on a straight
monthly basis, others on a straight tonnage basis, and others using a combina-
tion of salary and bonuses. There is some evidence that determining pay sys-
tems and rates is a sensitive issue on which ideological and practical consid-
erations have had to be balanced. Mine workers are paid considerably more
than agricultural laborers, and they have far better housing and benefits, so
recruitment is not a major problem (although some labor bureaus have found
that unemployed urban youth do not want jobs as miners).
Production
2.06 Coal production increased from 90 million tons in 1955 to 635 mil-
lion tons in 1979, before falling to 620 million tons in 1980 (Table 2.2).
The reason for the drop in production between 1979 and 1980 appears to be
that in previous years production was expanded at the expense of tunnelling
and other development work needed to sustain production. The Government has
stated that coal production will drop again in 1981. The Government
nevertheless expects to increase production to over 700 million tons by 1985.
- 27 -
Table 2.2: COAL PRODUCTION, 1(155-80
(million tons)
Lignite Anthracite Bituminous /a Total
1955 2.1 13.6 74.0 89.7
1960 8.5 68.2 318.3 397.2
1965 8.8 39.6 183.4 231.8
1970 13.0 56.1 284.9 354.0
1975 20.3 97.1 364.8 482.2
1976 20.6 99.6 363.3 483.5
1977 23.3 115.5 411.9 550.7
1978 24.9 126.2 466.8 617.9
1979 25.3 125.8 484.4 635.5
1980 24.3. 128.9 466.9 620.1
/a Includes coking coal. In 1979 this amounted to 327.4 million tons, much
of it used as fuel.
Note: Statistics on coal production must be treated with considerable
caution, since the coal appears to be measured by filling railway
coal cars and river barges to a given level, not by weighing it.
The quantities of coal produced by county and commune mines are
probably subject to even greater errors, and some production may
not be recorded.
Sources: Tables A.6, A.7 and A.8.
2.07 About 95% of coal production comes from underground mines, most of
which are only partly mechanized. The few large underground mines equipped
with coal cutting machinery provide about a third of deep-mined coal and
partly mechanized mines another third. The number of underground coal mines
in operation is shown in Table 2.3.
- 28 -
Table 2.3: UNDERGROUND COAL MINES IN OPERATION, 1976-79
Large mines Medium mines Small mines
over 600,000 t/y 100,000-600,000 t/y Less than 100,000 t/y
Production Production Production
Number (million t/y) Number (million t/y) Number (million t/y)
1976 187 149 988 205 944/a 114
1977 203 174 1,015 228 9997a 134
1978 201 203 1,141 256 9217a 142
1979 213 213 1,040 255 1,0077a 151
/a These figures are inconsistent with reports that 20,000 county and commune
mines produce 25-40% of total output. The 1,007 small mines may refer
only to those under the control of the Ministry of Coal Industry, but the
production shown for small mines must include that for the small mines
controlled at the county and commune levels.
Source: Ministry of Coal Industry.
2.08 Future plans call for increased mechanization of working faces in
both old and new mines, with the former having priority, and for domestic
manufacture of underground mining equipment. For mechanized mines, longwall
mining is preferred to the room and pillar system because it achieves a higher
recovery of coal. The resulting surface subsidence is not regarded as a
problem, although it prevents mining under inhabited areas and major civil
works. Underground mining equipment has been purchased from the Federal
Republic of Germany, the UK, Poland and Japan. However, the equipment has
been introduced with mixed success, partly due to inadequate training of the
operators and maintenance staff.
2.09 There are long lead times to open new underground mines, generally
5-10 years depending on the size of the mine. Part of this time is required
for project approvals, but construction of new shafts and tunnelling for
haulage ways and underground development are extremely time consuming due to
a lack of modern equipment. These are critical areas for the expansion of
future coal production.
2.10 Open-pit mines produce only a small proportion of the coal (12%
and 2.4%, respectively, for bituminous coal and lignite in 1979) because
geological conditions often lead to high stripping ratios and because the
equipment is very small by modern standards. For example, the Chinese
use 8-ton dump trucks whereas 85-ton trucks are used in India and trucks as
large as 175 tons are used in the USA./1 The use of such small equipment
/1 Major open-pit mines such as that at Fushun use railways, however.
- 29 -
greatly reduces the economic efficiency of the present Chinese open-pit
operations. The Coal Ministry places high priority on developing open-pit
mines and wishes to import modern, large-scale dump trucks, power shovels of
30-40 ton capacity, and draglines. Owing to the hardness of the overburden,
bucket wheels are not usually suitable.
2.11 Since open-pit mines can generally be developed more quickly and
usually have lower unit investment and operating costs than underground
mines, the development of open-pit mining is a matter of highest priority
for the industry. Joint ventures with the Ministry of Electric Power would
permit the development of mine-mouth power plant complexes.
Coal Quality
2.12 The quality of coal delivered to the consumer is generally poor.
The power sector reports an average calorific value of only 4,480 kcal/kg.
Analyses of raw coal (which appear to represent the better grades) are shown
in Table 2.4.
Table 2.4: RAW COAL ANALYSES
Shandong Province
Liaoning Province Nantun Mine Xinglongzhuang
Santaizi Mine No. 3 seam field
Ash content % 21.6 9.87 9.41
Volatiles % 43.5 33.1 32-49
Calorific value kcal/kg 5353 6821 7060
Sulphur 1.99 0.49 0.5
Phosphorus 0.038 n.a. n.a.
Moisture % 10 6.3 2.89
Source: Liaoning and Yanzhou Coal Bureaus.
2.13 Most coal could be improved by washing. Only about 100 million
tons are washed at present, but it is planned to double coal washing capacity
by 1985 and the purchase of needed equipment has high priority. Washeries
produce three grades of coal: large lump (50%), middlings (20%) and fines
(15%), with dirt and losses accounting for the remaining 15%. Where geolo-
gical conditions are complex, washing produces a disproportionately high
percentage of fines, which are difficult to dewater. It is planned to uti-
lize middlings and fines as fuel in power plants at the mine mouth, and also
to improve the quality of fines and make them suitable for industrial use by
flotation processes. At present, lump coal is reserved for coking,
- 30 -
middlings for power generation, and fines for domestic use (including the
manual production of compressed coal balls).
2.14 Coal mines purchase power from coal-fired thermal plants run by
the Ministry of Electric Power. At present, energy is wasted as the coal is
transported, often over long distances, from the mine to the plant and the
power sent back to the mine. It seems that, in future, more power plants
will be constructed (as joint ventures between the Ministry of Coal Industry
and the Ministry of Electric Power) at the mouth of open-pit mines and
underground mining complexes with coal washeries.
Transportation /1
2.15 Coal is transported principally by rail. The 413 million tons year
transported in 1979 accounted for 38% of total rail freight; an additional
220 million tons/year are moved by inland waterways and coastal shipping.
Coal ports handled 82 million tons of coastal shipments and exports last year.
Transport bottlenecks have occurred in the past but are reported to have
eased, possibly as a result of the decline in coal production, but also as a
result of double-tracking and electrification of parts of the railroad system,
which is nevertheless still reported to be running at capacity in many seg-
ments. While in some cases the Ministry of Coal Industry builds rail spurs to
coal mines and owns coal cars, in general the Ministry of Railways takes
delivery of the coal, and assumes responsibility for it, at the mine. Trans-
portation is at present the principal bottleneck to expanding coal production
in several provinces, including Shanxi, Shaanxi, Ningxia, Guizhou and others.
Table 2.5: COAL CONSUMPTION BY SECTOR, 1976-78
(%)
1976 1977 1978
Power 16.6 17.5 20.1
Railways 4.9 4.8 4.7
Metallurgical 9.3 9.7 10.5
Other industries 50.2 49.3 48.9
Household and commercial 19.0 18.7 17.8
Source: Ministry of Coal Industry.
/1 For greater detail, See Annex F, "The Transport Sector."
- 31 -
Consumption
2.16 In the consumption of coal, industrial demand is dominant, espe-
cially as industry also consumes roughly four-fifths of electrical power.
The metallurgical sector comprised only 10.5% of coal consumption in 1978, but
this does not include coke ovens (classified under chemicals) which consumed
about 10% according to one source./l Industrial and power sectors must use
large quantiries of coking grade coal for thermal purposes; coking grade coals
reportedly account for 51% of total coal produced.
Export Prospects
2.17 Exports of coal have been rising rapidly from a small base, and
reached 4.63 million tons in 1979. A further rise is expected to perhaps
20 million tons in 1985. Given the enormous resource base and the acceptable
quality of the better grades of Chinese coal, exports could continue to rise
thereafter. However, there are problems to be overcome: (a) increasing mine
output to meet expanding domestic demand while also conserving energy to free
coal for export; (b) improving the capacity of the railroads that link mines
with ports; and (c) improving the number and capacity of coal loading ports
(both loading rate and size of vessels). At present only two specialized
ports can load coal in northern China, Lianyungang and Qinhuangdao; the
capacity of the latter is being increased from 10 to 40 million tons/year by
1985. A new coal port is being built at Shijiusuo to handle 15 million
tons/year by 1985, with an ultimate capacity of 30 million tons; a 240 km
double-track electrified railway is being constructed to bring coal to the
port. Increasing exports are also anticipated though general cargo ports such
as Qingdao and Dalian. Not only northern ports but also southern ones such as
Huangpu could be usefully improved, along with transport links to the
interior, to handle coal for export.
Productivity
2.18 Comparisons with other countries are difficult, because in China
each coal mining enterprise provides a range of social services that in
other countries are provided by the Government. Thus, many persons whose
activities have no direct relation to coal mining are included in the mine
work force. Employment in the coal industry is shown in Table 2.6.
/1 R.P. Greene and J.M. Gallagher, editors, World Coal Study, Vol. I, Future
Coal Prospects, Cambridge, Massachusetts: Ballinger, 1980, p. 100, based
on data for 1977 allegedly supplied by the Ministry of Coal Industry.
- 32 -
Table 2.6: COAL INDUSTRY EMPLOYMENT, 1975-79
('000)
1975 1976 1977 1978 1979
Total employed 3,626 3,814 3,939 4,068 4,104
Miners in centrally
controlled mines 836.7 859.2 924.0 921.1 929.8
Of which:
Underground 809.6 833.7 897.4 895.1 903.6
Open-pit 27.1 25.5 26.6 26.0 26.2
Source: Ministry of Coal Industry.
2.19 The data indicate an average production of about 0.5 tons per
man-day in underground mines and about 2.0 tons per man-day in open-pit
mines. The small number of modern open-pit mines and the overall low degree
of mechanization in underground mines result in lower productivity than is
common in industrialized Western countries. Mechanized underground mines
planned for the northeast would have capacities of 1.2 and 1.8 million tons/
year; their output would be 1.6 tons per man-shift, compared with 2 tons in
India, an average 3-4 tons/per man-day in Western European underground
mines and 10.75 tons in the USA. Even greater output, of the order of 10-20
tons/per man-day, could be obtained from modern open-pit mines with
large-scale equipment.
Prospects and Recommendations
2.20 Any estimates of future coal production must be treated with cau-
tion. The mission was told that "more than 700" million tons would be pro-
duced in 1985./l Even if high priority is given to the coal industry in
response to the recent change in expectations of oil output, total coal
production is not likely to exceed 750 million tons by 1985; taking transport
problems into account, production of around 730 million tons seems more
likely. Such an increase in production would come from the development of a
number of major new projects (Table 2.7) and from various small projects.
This increase appears achievable based on past performance, since the
production data for 1965-80 indicate an increase of about 125 million tons of
production capacity every 5 years for the past 15 years.
/1 Other visitors have reportedly been told that 1985 production would be
720 or (more recently) 730 million tons.
- 33 -
2.21 However, judging by the limited information available, this expan-
sion will not be easy. Data on major new projects (Table 2.7) show an approx-
imate increase in capacity of 50-60 million tons/year by 1987. But much of
this production will come onstream after 1985 and some allowance must be made
for slippage in construction schedules. Several of the identified projects
are joint ventures with foreign companies, while others involve contractual
arrangements, whereby the import and installation of foreign equipment is paid
for by coal exports. Negotiation of these projects is proving difficult.
Furthermore, any major expansion of open-pit coal mining will depend on satis-
factory arrangements being concluded for the procurement, operation and main-
tenance of foreign equipment, since large-scale equipment is not manufactured
domestically. In the next decade at least, most new production capacity is
expected to be from underground mines, which require several years to con-
struct. Thus, much will depend on the success of continuing efforts, such as
are now being made, to modernize and transform the tehnology of medium-sized
and small-mines so as to prolong and expand their output.
2.22 The potential for expanding coal output up to 1990 will be con-
strained both by the possibilities for opening up new mines and by the
difficulties of expanding transportation on the scale required. Since the
mid-1960s, China has increased its coal output by 120-130 million tons every
five years, and a similar increase seems entirely possible during 1980-85.
By extension, output might be expected to rise further to about 870 million
tons in 1990; a strenuous effort to accelerate the pace of mine develop-
ment, coupled with heavier investment, could possibly raise the level to
900 million tons or a little more. However, coal production on this scale
would encounter transport difficulties requiring substantial further invest-
ments in railroad facilities. Making effective use in 1990 of a 280 million
ton increase in coal output might well require, in addition, construction
on a large scale of mine-mouth thermal power plants, together with long-
distance transmission lines, and a major investment in coal washing and
processing facilities, which would reduce bulk before transporting and so
economize on transport requirements. Improvements now projected in inland
waterways - particularly the Huai He, Grand Canal, and Xi Jiang - will also
ease the coal transport problem.
Capital Requirements
2.23 A final area of importance for coal production prospects is finan-
cing. No information was available on the industry's financial position, its
sources of funds or its future capital expenditure plans. Capital require-
ments for the coal industry in China are difficult to assess since investment
costs and expansion plans are not known. However, they are undoubtedly very
large, on the order of Y 10 billion more for 1981-84. Investment during the
past five years is shown in Table 2.8. Investment in 1981 is expected to be
roughly the same as in 1980, about Y 2.5 billion.
- 34 -
Table 2.7: MAJOR COAL MINE PROJECTS
Mining
Province administration Project
Nei Monggol Huolinhe Open-pit lignite mine under construc-
tion. Planned output 3-5 million
tons/year by 1985.
Hebei Kailuan Following rehabilitation of earthquake
damage, two new mines are under con-
struction - Qianjiaying and Donghuantuo -
with capacities of 4 million tons/year
each.
Shandong Yanzhou Mines producing steam coal for export
under construction - production 8-10 mil-
lion tons/year by 1987.
Anhui Huainan & Huaibei Increase production of coal to supply
Shanghai with 20-30 million tons/year
by 1987. Five to six new mines with out-
puts of 1.5-2.0 million tons/year each are
being developed.
Shanxi Datong Open-pit mine to be constructed at
Shuoxian to produce 10-15 million tons/
year by 1987.
Henan Pingdingshan Increase production of coking coal from
10 to 13 million tons/year by 1987.
Jiangsu Xuzhou Increase production of bituminous coal
from 13 to 15 million tons/year by 1987.
Source: Ministry of Coal Industry.
- 35 -
Table 2.8: INVESTMENT IN THE COAL INDUSTRY, 1976-80
(Y million)
1976 1977 1978 1979 1980 (est.)
1,866 2,166 3,138 3,248 2,447
Source: Table A.12.
2.24 Foreign exchange will be required to purchase mining equipment and
to develop a Chinese capability to uianufacture a wider range of modern types
of equipment. There are now over 100 large plants making machinery for the
coal industry,and they have growing capabilities. But along with open-pit
mining equipment, there is still a need to import coal washing equipment and
various other items, notably in the area of precision hydraulic equipment.
3. PETROLEUM
Sector Development
3.01 Until the establishment of the People's Republic in 1949, the scale
of oil exploration and discoveries had been modest, with production of only
70,000 tons p.a., plus 50,000 tons of shale oil. Extensive exploration was
then undertaken with help from the USSR, but with only limited success and
that in the remote northwest. The discovery in 1959 of the Daqing field,
which was to become one of the world's major oilfields, shifted exploration
to the northeast, north and east and led to the discovery of the Shengli,
Dagang, Liaohe, Nanyang and Renqiu fields, and of offshore findings in the
Bo Hai.
3.02 By 1979, production had reached 106 million tons of crude oil
and 14.5 billion m3 of natural gas, an outstanding and promising perform-
ance, particularly as it was achieved with China's own equipment. Production
has, however, been essentially static for 2-1/2 years and is now declining
slightly.
Organization
3.03 All exploration and production activities specifically concerned
with oil and natural gas are the responsibility of the Ministry of Petroleum
Industry in Beijing. The Ministry of Geology also carries out exploration
work. Once production has been established, the Ministry of Petroleum
- 36 -
Industry organizes a production unit responsible for all petroleum activities,
including exploration, in its area (this area corresponds to geological
boundaries rather than to the regular administrative units). A separate unit
is responsible for offshore operations.
3.04 Oil fields are made as self-sufficient as possible, with the excep-
tion of electric power generation. In addition to their normal functions,
petroleum units manage agricultural production, schools, nurseries, hospitals,
municipalities, and commercial activities catering to their employees. This
explains in part the very high number of personnel employed in petroleum
activities.
Exploration
3.05 Exploration is done by about 300 seismic crews and 500 drilling rigs
(total staff about 100,000), which annually drill 2,000-3,000 wells, compared
with a total of 395 for all oil-importing developing countries in 1978./i
Exploration activities are spread over an area of sedimentary formations with
oil-bearing potential, totalling 4.2 million km2 on land (about one third of
the country) and over 1 million km2 offshore. There is some evidence that
the considerable amount of modern equipment recently purchased is not being
effectively used.
3.06 The last major discovery was the Renqiu area in 1975. Although it
appears that Chinese practice is to report as a new "discovery" the finding of
production in an area remote from existing production (rather than reporting
each individual oilfield as a discovery), the rate of discoveries seems very
low in relation to the area explored and to the number of exploratory wells.
Indonesia, for example, which is comparable to China in terms of sedimentary
areas and current oil production level, finished 133 exploratory wells in
1979, of which 34 produced oil and 9 natural gas.
3.07 Offshore exploration is still at an early stage, and despite
periodic reports of "significant" discoveries, oil production does not appear
to be imminent from any of them, especially since large-scale development is
likely to require the expertise of foreign oil companies. Agreements have
been signed with French and Japanese groups for offshore development in the Bo
Hai, but the geology of the region makes it unlikely that production can do
more than offset the decline of production from older onshore fields. Pro-
posals for further exploration work are being sought from international oil
companies that have participated in seismic surveys of the continental shelf
off the southeastearn and southern regions of China. Major offshore produc-
tion is unlikely before 1985 or, possibly, 1990.
/1 Differing definitions of "exploration" drilling may bias this comparison.
- 37 -
3.08 Onshore, according to Chinese estimates, only about 13% of the
potential oil-bearing wells have been well explored and over 60% have hardly
been explored at all; while almost no drilling has been done anywhere to
depths of over 3,000 meters. Promising sedimentary areas still have to be
explored, particularly in the northwest. Though prospects for large discov-
eries exist here, their development would entail severe logistical problems,
in particular transportation over very long distances to consuming areas.
The prospect is therefore for further discoveries of relatively small oil-
fields close to the existing producing areas, which might tend to offset the
decline of production from existing fields.
3.09 Over the long term, China will need to raise the productivity of the
exploration effort through improved technology, personnel deployment and
training if it is to reverse the present production decline.
Production
3.10 After peaking in 1979 at 106.1 million tons - including 300,000 tons
of shale oil - production has started to decline. Almost 90% of production is
concentrated in the north, the east and particularly the northeast, where the
Daqing field supplies about half of China's oil (Table 3.1).
- 38 -
Table 3.1: CRUDE OIL PRODUCTION BY REGION AND MAJOR FIELDS, 1977-80
(million tons)
1977 1978 1979 1980
Northeast 54.875 56.039 57.363 58.59
Daqing 50.314 50.375 50.753 51.50
Liaohe & others 4.561 5.664 6.610 7.09
North 15.554 20.399 20.404 19.11
Renqiu 12.298 17.230 17.331 16.03
Dagang 3.150 3.000 2.901 2.91
Others 0.106 0.169 0.172 0.17
East 17.660 19.743 19.206 17.92
Shengli 17.520 19.468 18.880 17.59
Others 0.140 0.275 0.326 0.33
Central-South 1.261 2.832 3.385 4.16
Northwest 4.207 4.942 5.687 6.06
Southwest 0.081 0.094 0.104 0.10
Total 93.638 104.049 106.149 105.94
Sources: Ministry of Petroleum Industry.
3.11 Daqing is located in a geological unit known as the Songliao Basin,
which lies mainly in Heilongjiang, and produces over 50 million tons of crude
oil annually. Other fields in the basin produce about 1 million tons of crude
oil annually. The Daqing field measures some 140 km in a north-south direc-
tion and 20-40 km in an east-west direction. From information on the histori-
cal development of the field and its geological characteristics, the original
oil in place in the reservoir can be estimated at around 3,000 million tons,
of which about 30% or 900 million tons is likely to be recovered by the
existing production techniques. Of this amount, some 515 million tons appear
to have been recovered between 1960 when production began and the end of 1979.
Crude oil production from the field has apparently peaked and is beginning to
decline.
3.12 The production method used at Daqing throughout its 20-year produc-
tion history has involved injecting water into the oil reservoirs in order to
flush oil towards the producing wells. The injection pattern is apparently
based on a Soviet model; it gives a neat and orderly spacing of wells at the
surface, but a very poor geometrical distribution of wells among the individ-
ual oil reservoirs. This system yields relatively high production rates in
- 39 -
the early years of development, but results in a lowered ultimate total
recovery of oil and a relatively rapid production decline as injected water
breaks through the oil and reaches the production wells. This point has been
reached at Daqing, where daily oil production per well is declining while the
quantity of water injected is increasing very rapidly. Since there is a
physical limit to the total amount of fluid that can be handled by the wells
and surface facilities, the future prospect is for ever-increasing recovery of
water combined with declining oil production. Output from existing wells in
the field is expected to fall in the 1980s by 2-3 million tons on the average
each year, but officials suggest that this will be partially offset by
drilling new wells and tapping new layer around those now in production.
3.13 The production decline rate at Daqing is likely to be the key factor
in any forecast of oil production in China during the next ten years. In the
other producing areas, which consist of groups of smaller oilfields, new dis-
coveries will tend to offset the decline of production of fields developed
earlier. The overall decline in production in the next five years from these
grouped fields (such as Liaohe, Dagang, and Shengli) is therefore likely to be
much less marked than at Daqing. These fields are grouped around the Bo Hai,
and the extension of the producing areas offshore will also tend to offset
production declines in the older onshore fields. None of the anticipated new
pool developments, however, seems important enough to offset the likely
decline in production from Daqing in the next five years.
3.14 Earlier expectations of future production levels from the continen-
tal shelf seem to be overoptimistic in the light of the results of the
geophysical surveys made in the last two years. Much of the northern conti-
nental shelf and the Bo Hai appears to be underlain by a continuation of the
onshore geology, so that production characteristics of any oilfields are
likely to resemble those of the existing onshore fields. Production from all
of these existing fields has been based on extensive use of water to flood
the oil reservoirs; this would be an extremely expensive operation offshore,
with corresponding long lead times for installation of production facilities.
The geology of the southern part of the continental shelf appears to be more
like a conventional oil producing area, and reports of oil discoveries in the
Xi Jiang estuary and off Hainan Island are encouraging. Nevertheless, these
discoveries will have to be confirmed by appraisal wells before production
platforms can be designed and installed. It is therefore unlikely that
offshore oil production can commence before 1985, and offshore production on a
scale sufficient to materially affect the overall petroleum situation is
unlikely much before 1990.
3.15 A tentative forecast is for China's oil production to fall to
100 million tons in 1985; indeed, production is being cut back toward that
level in 1981 and at the same time efforts being made to adjust methods to get
better long-run results. Trends in the second half of the 1980s are more
uncertain, since they depend on the magnitude of new discoveries and the speed
- 40 -
with which they can be developed. Output in 1990 is likely to amount to
80-105 million tons, but on balance, even if improved techniques are applied
and some new fields begin to be developed, a further small decline seems
likely, perhaps to 95 million tons.
Quality of Crude Oil
3.16 A large part of Chinese crude oil has a high wax content, a low
proportion of light fractions, and a melting point so high that it is a solid
at ambient temperatures most of the year in most of China. These
characteristics lead to severe problems in transportation and refining, as
described later.
Equipment and Methods
3.17 Most of the drilling equipment is manufactured in China and based on
outdated models from the USSR. The quality is lower in the oldest fields like
Daqing and better in the new fields like Renqiu and offshore fields, where
imported equipment is used. The two drilling rigs visited by the mission were
poorly maintained and dangerous. Stationary equipment such as pump stations
and tanks was much better maintained. No information was obtained on the rate
of accidents but it is likely to be high, with no blow out preventers on
drilling sites, little use of protective clothing, breached dikes around
tanks, lack of efficient fire extinguishers, open electric knife switches in
pump houses, etc.
3.18 Drilling methods and production technology are also backward,
although they too are better in the new fields. Work overs on wells, rendered
difficult by the type of equipment used, seem to be infrequent. Many wells
are not producing, for example, up to 20% of those at Shengli. Poor cementa-
tion of well casing prevents proper control of oil production and water injec-
tion in many wells. In Daqing, the pattern of water flooding used results in
much recoverable oil being left in the reservoir, but the more recently
developed Shengli and Renqiu fields use more efficient patterns of water
injection. The measurement of oil, water and gas is imprecise, particularly
for individual wells, which has serious implications for field and reservoir
management. There seems to be poor training of field personnel and a lack of
supervision by qualified staff, due to a shortage of trained personnel and a
lack of transport for supervisors to make frequent visits to scattered work
locations. With these constraints it is doubtful whether advanced methods of
enhanced recovery can be effectively implemented. The productivity of the
work teams and their equipment appears to be low; at Daqing, for example,
20 teams drill 50 exploratory wells per year at an average depth of 2,000 m.
The total depth per team is one eighth to one fifth of what trained crews
using modern equipment could achieve. In Daqing, Shengli and Renqiu, the
excess capacity of capital equipment such as pumps and machine tools was
evident and must have added significantly to the investment costs for these
oilfields.
- 41 -
3.19 In the last five years, China has imported a considerable amount
of modern oilfield equipment, particularly seismic survey and drilling
equipment, but it appears that much of this is not yet being effectively used
in the field. The greater part of this equipment seems to have been purchased
in 1978, when investment for petroleum exploration is reported to have more
than doubled (to $1.4 billion) from the previous year. Among the items
imported at this time are land seismic survey equipment from the USA, heavy
onshore drilling equipment from the USA and Romania, seismic data processing
centers and an offshore seismic survey vessel from France, and offshore
drilling equipment from Singapore, Japan and Norway. Field staff seem to have
been inadequately trained to use this equipment, however. (This situation
is clearly described in reports concerning the loss of the Bo Hai II offshore
drilling rig.)
Consumption
3.20 Table 3.2 shows the estimated balances of the principal categories
of oil for 1979.
- 42 -
Table 3.2: OIL BALANCES, 1979
(million tons)
Diesel Fuel oil
Gasoline Kerosene oil & crude Other Total
Primary production n.a. n.a. n.a. 106 n.a. 106
Refining
Input n.a. n.a. n.a. -76 n.a. -76
Output 11 4 19 28 6 68
Net 11 4 19 -48 6 -8
Exports 2 .. 2 13 .. 17
Net domestic availability 9 4 17 45 6 80
Consumption 9 4 17 45 6 81
Electric power system .. .. .. 17 .. 17
Heavy industry .. .. 1 23 3 27
Light industry 1 5 2 8
Transportation 7 ) .. 7 .. .. 14
Agriculture & other 2 ) 3 8 .. 1 14
Domestic & commercial .. 1 .. .. .. 1
Notes: Distribution of refined product exports and consumption is conjectural.
The figures shown for total consumption by sector are consistent with
the percentage breakdown obtained from the Ministry of Petroleum
Industry, assuming (a) "Agriculture and Other" accounts for otherwise
unaccounted for consumption, and (b) refining losses are included in
industrial consumption.
Sources: Ministry of Petroleum Industry and mission estimates.
Natural Gas
3.21 In 1980, the 14.27 billion m3 of natural gas produced was 1.7%
below production in 1979; the mission estimates that production will further
decline, perhaps to as little as 12.0 billion m3 in 1985. Production is
almost equally divided between nonassociated gas, produced mainly in Sichuan,
and associated gas dissolved in the oil and produced with it. Associated gas
is now almost fully utilized as fuel in the oil fields or as feedstock for
fertilizer and petrochemical plants. Total natural gas consumption in 1979 is
estimated at 4.1 billion m3 (28%) for fertilizers, 1.3 billion m3 (9%) for
petrochemicals and synthetic fibers, and 9.1 billion m3 (63%) for fuel, of
which 1.7 billion m3 (12%) were used in thermal power plants. The regional
- 43 -
breakdown of gas production is shown in Table 3.3. Many of the fertilizer
and petrochemical plants are located near old oilfields and thus depend on
associated gas obtained from declining production of oil. The supply of gas
may therefore fall below requirements in the near future, which would make
the development of nonassociated gas supplies in the oil producing areas an
urgent priority. To do this would require deeper drilling and improved
equipment.
Table 3.3: NATURAL GAS PRODUCTION
(billion m3)
1977 1978 1979 1980
Northeast 4.62 5.00 5.17 5.27
Daqing 3.00 3.20 3.31 3.39
Others 1.62 1.80 1.86 1.88
North 0.78 0.82 0.93 0.80
Renqiu - - - -
Dagang 0.78 0.82 0.93 0.80
Others - - - -
East 1.18 1.44 1.55 1.44
Shengli 1.2 1.4 1.5 1.42
Others - - - 0.02
Central-South 0.02 0.02 0.02 0.05
Northwest 0.26 0.30 0.33 0.39
Southwest 5.26 6.15 6.52 6.33
Total 12.12 13.73 14.52 14.27
Note: The table was compiled from two sets of data, one rounded
to tens of millions of m3 and the other to hundreds of
millions of m3.
Source: Ministry of Petroleum Industry.
Oil and Gas Reserves
3.22 The extent of oil and gas reserves is not widely publicized inside
China and is a matter for considerable speculation outside the country.
Even in the oil fields visited - which accounted for 80% of petroleum
production - the data available did not permit the calculation of a reliable
estimate. Table 3.4 shows tentative estimates of oil and gas reserves based
on available information.
- 44 -
Table 3.4: TENTATIVE ESTIMATES OF OIL AND NATURAL
GAS RESERVES
Original Remaining
recover- Oil recoverable Asso- Non- Total
able produced reserves ciated assoc. natural
Region oil to date of oil gas gas gas
----------(million tons) (billion m3)-
Northeast 1320 590 730 25.0 .. 25.0
North 460 80 380 5.0 .. 5.0
East 410 161 249 10.0 3.5 13.5
Central- 90 10 80 2.5 .. 2.5
south
Northwest 400 40 360 15.0 .. 15.0
Southwest 13 1 12 0.5 70.0 70.5
Total 2693 882 1811 58.0 73.5 131.5
Source: Mission estimates.
Pipelines and Refineries
3.23 Pipelines and some refineries are under the control of the
Ministry of Petroleum Industry. Refineries combined with petrochemical
plants come under the Ministry of Chemical Industry.
3.24 Eighty percent of crude oil production is moved by pipeline and
the remainder by rail, which also carries most of the refined products, or a
total of 80-90 million tons per year. The 6,800 km network of oil pipelines
is not extensive in relation to China's size and the distribution of produc-
tion and markets. The high pour point of most of the crude oil, fuel oil
and the heaviest grades of diesel fuel complicates their transport, and all
pipelines, railroad tank wagons and oil tankers must have heating equipment.
- 45 -
3.25 Refinery capacity is about 93 million tons p.a., with a throughput
of perhaps 76 million tons in 1980. There are 46 refineries, most of which
are small by international standards. Only 31 have capacities of 500,000
tons p.a. or more, and even the largest refineries visited by the mission
(at Daqing, Fushun, Shanghai, and Yanshan, about 40 km from Beijing) are not
particularly large by world standards. Given the economies of scale in
petroleum refining, many of the smaller refineries may be uneconomic.
3.26 Refineries produce a wide range of products, together with petro-
chemical feedstocks and industrial solvents. The output of the principal
products is shown in Table 3.5. Because of the low proportion of light
fractions in the crude oil, secondary refining or cracking plants are
required in most refineries.
Table 3.5: OUTPUT OF PRINCIPAL REFINED PETROLEUM PRODUCTS
('000 tons per year)
Product /a 1978 1979 % of total /b
Gasoline 9,913.9 10,698.6 16.0
Kerosene 3,560.4 4,093.2 6.0
Diesel oil 18,256.6 18,728.2 27.0
Lubricating oil 1,806.2 1,914.8 3.0
Fuel oil 28,142.9 28,161.2 41.0
Benzene /c 340.3 322.9 0.5
Other /d n.a. n.a. 6.5
/a Product specifications are not available in all cases and some designa-
tions may, in translation, vary from international usage. It appears,
for example, that heavy marine diesel is classified as fuel oil.
/b As reported by the Ministry of Petroleum Industry.
/c May refer to industrial solvents.
/d Includes LPG, wax, coke, aviation fuel, asphalt, petrochemical feed-
stocks, greases.
Source: Ministry of Petroleum Industry.
3.27 The quality of most products appears to be below international
standards, with, for example, automotive gasoline octane ratings of only
66-70. No quality index is used for diesel fuel, which has a high pour
point. Lubricating oils are of variable quality and complaints have been
voiced by users.
- 46 -
3.28 The refinery equipment seen was mostly produced in China, with the
exception of specialized components such as wax purification and packing
plant and major reactor vessels in some of the larger rafincrics.
3.29 The efficiency of refineries cannot be estimated with much
accuracy since statistics do not distinguish between refinery fuel
consumption and petrochemical feedstocks. In the refineries visited, the
standard of cleanliness was high, but instrument maintenance was poor and
fire fighting provisions insufficient.
3.30 Refineries, like other petroleum installations, are handicapped by
the lack of domestic production of seamless steel pipes larger than 25 cm in
diameter. Most pipelines and refinery pipework of larger diameter use
spiral-weld pipe, which has a much lower pressure rating. Pipe elbows and
swages in these larger diameters are not forged, but built up in segments
from spiral-weld line pipe. Not only is the manufacture of this pipe labor-
ious and time consuming, but the pipe also reduces the operating pressure
and/or the safety factor of the installation.
Oil Shale
3.31 Reserves of oil shale in China are reported unofficially to be of
the order of 400 billion tons and may be much larger, since the geological
environment is favorable for their formation in many of the sedimentary
basins. Deposits of 100 billion tons or more, containing 5-10 billion tons
of oil, are reported in Heilongjiang and Hebei. The grade of most oil
shales is fairly low (less than 10%) but a few deposits have 10-20% of oil
by weight.
3.32 Before 1958, shale oil accounted for almost half of Chinese oil
production, but the proportion declined rapidly as normal crude oil produc-
tion increased after the discovery of the Daqing oilfield. Recent produc-
tion figures are shown in Table 3.6 for two producing fields at Fushun
(Liaoning) and Maoming (Guangdong).
3.33 At the Fushun plant (visited by the mission) raw shale comes from
the Fushun open-pit coal mine, where it overlays the coal. The rate of
shale extraction is therefore geared to coal production. The shale oil
plant has a capacity of 3 million tons/year of shale and produces 100,000
tons/year of heavy black viscous oil, which is burned as fuel oil. The oil
content of the shale is about 6% by weight, but oil extraction is only about
3%. The technology, which is simple and works, should be applicable in
other developing countries, after some upgrading to improve its efficiency.
- 47 -
Table 3.6: SHALE OIL PRODUCTION
('000 tons)
1970 1975 1977 1978 1979
Liaoning 385 363 238 262 233
Guangdong 122 151 114 101 81
Total 507 514 352 363 314
Source: Ministry of Petroleum Industry.
3.34 Although there appear to be no plans to expand the extraction of
oil from shale, this development might be useful if conventional oil
production continues to decline, since the reserve base is large and the
plants can be built entirely with Chinese resources. There is apparently a
cooperative project with Romania for direct burning of oil shale as fuel in
a power plant.
Recommendations
3.35 Despite great achievements since 1949, the petroleum sector has
certain weaknesses that need to be remedied.
3.36 In exploration, improved technology and field practices,
(particularly seismic surveying, well logging and drilling), together with
equipment for deeper drilling, are essential to improve the discovery rate.
3.37 in production, fields have been made to produce too rapidly, which
has led so qui K declines after production peaks and to a reduction in the
amount of oil ultimately recovered. Oil production peaked in 1979 and exist-
ing fields now face a long period of decline, which cannot be offset by pro-
duction from the few new fields being developed. Some increases can be
expected from offshore developments but many of the earlier estimates seem
exaggerated. Offshore development will depend on agreements with foreign oil
companies, but even major discoveries in the near future would still require
five to ten years to be developed. It is therefore unlikely that an overall
decline can be arrested before 1985-90. Immediate steps should be taken to
implement enhanced oil recovery programs and to improve reservoir engineering,
particularly at Daqing. Drilling equipment and performance, and the cementing
of well casings should also be improved. Specialized well logging tools are
also needed to monitor the advance of water in the oil reservoirs.
3.38 While refineries represent a significant achievement in process
engineering and manufacturing, they may require considerable investment in the
- 48 -
near future, if improvement of the quality of products becomes an important
factor in programs to increase the efficiency with which petroleum is used.
This is particularly important for automotive fuels and lubricants needed for
a new generation of fuel-efficient trucks, automobiles and agricultural
equipment. A program of vigorous energy conservation measures is also likely
to have a high rate of return when it is evaluated in current international
prices; this has proved true in refineries in various other countries, where
programs are now underway.
3.39 In all sectors of the industry, better measuring techniques and
instruments are needed and more attention should be paid to safety practices,
if only to protect investments in equipment and training. The industry needs
better and larger seamless steel pipe and fittings.
Investment Requirements
3.40 Capital investments for the petroleum sector averaged about
$1.8 billion annually in 1977-79 (Table 3.8). Capital requirements in the
next decade should exceed $2 billion p.a., with 10-20% in foreign exchange,.
Table 3.7: INVESTMENT FOR EXPLORATION, DEVELOPMENT AND REFINERIES
(Y million)
Development
Exploration Crude Gas Refinery Total
1977 967 479 30 493 1,969
1978 2,093 1,009 44 646 3,792
1979 1,286 888 80 470 2,724
Average for period : 2,828
Source: Ministry of Petroleum Industry.
4. ELECTRICITY
Sector Development
4.01 China's achievements in the field of electric power are indeed
impressive. From 1,964 MW of generating capacity in 1952, the country had
developed a capacity of 63,016 MW by the end of 1979 - an average growth rate
of 13.7% p.a., which compares favorably with the rates in India (9% p.a.),
Indonesia (8% p.a.) and all developing countries (10% p.a.). The total elec-
tricity production increased even faster (14.7% p.a.) to 300.6 billion kWh in
1980. Electricity generation was 13 kWh per capita in 1952 and 308 kWh per
capita in 1980.
- 49 -
4.02 Almost all equipment needed for power generation, transmission and
distribution is manufactured within the country; indeed substantial surplus
capacity exists for the making of power generation equipment. Foreign
technology and equipment are used only in exceptional cases, of which high
tension transmission lines of 500 kV or over are the most important,
although China has begun test-manufacturing its own 500 kV equipment.
Technology for manufacturing, system planning, research and other areas has,
however, lagged somewhat behind world standards./l
4.03 Electrification had reached a substantial proportion of the country
in 1979, with 87% of communes and 63% of brigades having access to electri-
city. Figures for electrification at the household level are not available,
but are presumably much lower inasmuch as the per capita consumption of elec-
tricity in the household and commercial sector is about equal to household
consumption in Indonesia, where only 6% of the population have electricity in
the home.
Organization
4.04 The Ministry of Electric Power has overall responsibility for
policy direction, plan coordination, and technical guidance in the sector. It
has 15 departments and bureaus in Beijing. Also under its control are the
2 power construction administration offices, 8 scientific research institutes,
14 colleges and schools, 11 manufacturing and repair plants, 7 supplies
departments, 1 construction company and 1 international engineering consultant
company. Operation of the five principal regional grids is coordinated by
regional electric power administrations responsible to the Ministry. The
provincial grids and isolated installations, as well as transmission and
distribution below 110 kV, are under the management of the provincial govern-
ments with technical guidance from the Ministry. About 4.3% of the generating
capacity is owned by Communes and brigades, and another 5.7% belongs to
self-generating industries.
Consumption Pattern
4.05 Industry consumed 79.0% of electricity net of power losses in 1979
and agriculture defined to include brigade industry - 15.8%. Residential,
commercial and municipal consumption amounted to 4.8% and transportation to
only 0.6%. A large part of the industrial consumption was accounted for by
heavy industries (64% of the total). For comparison, industrial consumption
in India was about 62% and in Indonesia about 39%. A range of 40-60% is more
common in Asian developing countries such as Thailand, Malaysia, Korea and the
Philippines. Transmission and distribution losses (energy sent out less
energy sold) amounted to 9.24%, compared to about 13% in Indonesia, 10% in
Thailand, 17% in Brazil and 7% in the Philippines. One reason for the rather
/1 Recent contracts for designs and technical assistance from foreign firms
will help to overcome these problems; for example, the big generation
plants in Harbin and Shanghai have contracted with Westinghouse for
assistance in producing international-quality thermal turbogenerators
of 300 and 600 MW.
- 50 -
low losses in China is the large proportion of high voltage consumers and
small volume of sales of electricity to the low voltage sector (domestic and
commercial uses). Residential and commercial use per capita in 1979 amounted
to less than 12 kWh/year - about the same as India's and Indonesia's consump-
tion levels in domestic uses alone.
System Description
4.06 The 63,000 MW capacity consisted in 1979 of a large number of
systems but with three fourths of generation concentrated in 12 large grids,
of which the 5 largest account for 47% of total capacity (Table 4.1). The
many small power grids throughout the country lack the interconnections
necessary to improve the efficiency of operations.
Table 4.1: MAJOR ELECTRICAL GRIDS, 1979
Installed Peak Energy
capacity demand generation
Grids Area covered (MW) (MW) (GWh)
Regional Grids
Northeast China Liaoning and the major 7,759 6,020 42,350
part of Heilongjiang
and Jilin
East China Jiangsu, Anhui and 7,455 5,810 42,390
Zhejiang, and Shanghai
municipality
Central China Henan and Hubei 5,529 3,500 24,810
North China Beijing and Tianjin 4,989 3,553 25,890
municipalities and the
northern part of Hebei
Northwest China Shaanxi, Gansu and the 3,832 2,628 17,490
major part of Qinghai
Subtotal 29,564 152,930
Seven large provincial grids 14,204 68,170
Total 43,768 221,100
% of national total 69.5% 78%
Source: Ministry of Electric Power.
- 51 -
4.07 Generally, the development of transmission and distribution has
lagged behind that of generation. China has a shortage of about 10,000 km
of transmission circuits of voltages above 110 kV. Similar shortages exist
in substation capacity. These shortages limit the flexibility with which
the available supply of electricity can be distributed among consumers. The
transmission voltages in the country are 110 kV (62,000 km of lines), 220 kV
(26,000 km) and 330 kV (801 km). Development of higher voltage lines is
needed to permit significant power transfers over long distances. About
1,000 km of 500 kV transmission lines are under construction in central
China and the northeast, while others in the north and the east are at the
design stage. In the course of the 1980s, a high priority will be given to
high transmission lines west to east, bringing power from energy-rich
regions to industries near the coast.
4.08 A large part of the total generating capacity consists of small
machines, which are inherently less efficient in power generation than larger
units (unit sizes under 50 MW account for 47% and units of 50-100 MW another
20%). There are about 90,000 small hydro stations accounting for 7,000 MW, or
11% of total capacity; the average one thus had less than 80 kW of capacity.
These scattered small units have proved to be very successful in serving rural
needs, since they economize on transmission line costs. They are now being
expanded by nearly 400 MW per year, while the average size has been trending
upward. Thermal generating capacity was 69.7% (43,904 MW) of the total and
accounted for 82.2% of the total production in 1979 and 80.6% in 1980. Coal-
fired thermal capacity was 32,955 MW (52.3%) and produced 57.3% of the elec-
trical energy in 1979; oil-fired thermal capacity was 10,762 MW (17.1%) and
produced 19.7% of the energy, while natural gasfired thermal units produced
1.9% of the energy. The hydroelectric capacity of 30.3% (19,110 MW) produced
17.8% of the electrical energy. The rise of over 16% in hydroelectric power
output in 1980 over 1979, accounting for 43% of the increment in power output
in the one year, lifted hydro-s share to 19.4%. Though this result may have
been helped by unusually high water levels in many reservoirs, it is also
indicative of a determination to expand hydroelectric capacity rapidly in the
1980s, while giving increased emphasis to medium-sized units (50-500 MW) which
can often be built in as little as 4-6 years.
Fuel Consumption
4.09 The average fuel consumption rate for thermal power stations /1
was 2,954 kcal/kWh in 1979. The corresponding figures in 1977 and 1978 were
3,122 kcal/kWh and 3,038 kcal/klh, respectively, which show a steady improve
ment. This average fuel consumption rate compares favorably with 3,220 kcal
kWh in Indonesia but is considerably higher than the 2,520 kcal/kWh in the
USA. Substituting coal for oil in power generation and further improving
/1 Excluding those smaller than 6 MW capacity, which accounted for 3.4% of
the total electric energy supply.
- 52 -
conversion efficiency are important policy objectives in thermal power devel-
oprent because of the tight energy supply situation and the need to free oil
for higher priority uses. Both objectives will involve substantial capital
investments, particularly because small and old units must be replaced
(further reductions in their fuel consumption are not possible), and boiler
design limitations will allow conversion of only a fraction of the oil-fired
thermal station capacity to coal.
Capacity Utilization
4.10 The average running hours for all thermal units in the country was
6,018 hours in 1978 and 5,956 hours in 1979. The energy production from
thermal units amounted to about 5,280 kWh/kW of installed capacity in 1979,
and is said to have risen fuither to about 5,500 kWh/kW by 1980, which com-
pares with about 3,900 kWh/kW in India and about the same in the USA. These
figures show a high degree of maintainability and reliability of Chinese-
designed machines in this size and indicate adequate operation and mainte-
nance. Total capacity utilization, including hydro as well as thermal sta-
tions, was 4,474 kWh/kW in 1979, the equivalent of over 12 hours per day of
operation at full capacity.
Demand Management
4.11 Despite considerable growth in generating capacity, the supply capa-
bility has lagged behind demand and shortages exist, particularly in the
northeast, north and east grids. It was not possible to obtain a precise
assessment of the magnitude of the shortage and its effect on industrial pro-
duction, but a figure of 20% loss in industrial production was quoted in three
regions./l The northwest grid and the province of Shanxi have not experienced
power shortages. Demand management and allocation of shortages are apparently
well organized with hardly any ad hoc load shedding and no blackouts. A
remarkable performance in redirecting electricity supplies toward new priori-
ties including exports appear to have made possible the swift rise in produc-
tion of light industry (by 18.4% in 1980) and other sharp recent changes in
the composition of industrial output. Several industrial plants visited with
large exports were guaranteed electric power supplies. But like all rationing
schemes, this system almost certainly results in some nonoptimal distribution
and disguised costs. Spreading demand evenly over the hours of the day and
days of the week requires work shifts to be staggered and production to be
curtailed. These changes are associated with social and financial costs that
need to be considered in expanding energy suppliers.
Prospects and Recommendations
4.12 No official development program for the electricity industry is
available, or expected to become available, until the next five-year plan
/1 The extent to which these estimates take other constraints into account
is not clear.
- 53 -
is prepared and released. A ten-year national development plan for power is
being formulated by the Government and a draft is expected before the end of
1981. Quantitative information on future capacity is thus limited to works
already underway. About 10,000 MW of hydroelectric and 12,000 MW of thermal
generating capacity installations were in various stages of construction
as of 1980; about 16,000 MW of this capacity could be expected to be
commissioned by the end of 1985. In addition, about 400 MW of capacity is
expected to be commissioned each year in the form of small hydroelectrical
schemes, thus making a total capacity addition in the order of 18,000 MW
by 1985. This is expected to be able to sustain a growth rate in electrical
energy supply of 4-5% p.a. in the 1980-85 period. Because of the new
emphasis on medium-sized hydroelectric projects and the high priority now
being given to the sector in investment programs, this growth rate is
expected to rise to 6-7% p.a. in the second half of the 1980s.
4.13 Long-Range Plans. The formulation of long-range (10-15 year)
development plans for each region and for the country as a whole, including
identification of the least cost sequence of projects for meeting expected
demand, would represent an important advance. The present planning process
does not use sophisticated economic analysis to compare alternative develop-
ment strategies and select the least cost solution. Because of the large
magnitude of investments envisaged, each percentage point reduction in the
cost would amount to a saving far in excess of the cost of carrying out the
analysis. We strongly recommend strengthening the planning agencies to
perform this task and using external assistance in the initial period.
4.14 More emphasis needs to be given to planning interconnections
between generating facilities within a province, between provinces to form
regional grids, and between regional grids. Such interconnections would
permit savings in capital investments (by reducing the reserve margins
required and by permitting larger unit sizes and stations) and on fuel costs
(by permitting efficient loading of thermal plants and optimum utilization
of hydro capacity). Regional design and research institutes should pool
their expertise and supplement it from outside, if necessary, to formulate
long-range grid development plans, into which short-term actions would
ultimately fit. Industrial and transport plans need to be well integrated
with electric power development. Some of the most energy-intensive indus-
tries can usefully be shifted increasingly into regions where electricity
costs are low. Changes in electricity pricing to reflect costs of supply
appear to be needed to help promote such a shift.
4.15 Hydro and Mine-Month Thermal Development. The least cost
development plan is likely to include numerous hydroelectric projects, which
would increase the proportion of hydroelectric generation. However, large
projects now under implementation will not increase hydro's share in total
generation significantly. As most large hydro projects have an imple-
mentation period of about 8-10 years, and medium projects require at least
4-6 years, a vast and near-term effort both in terms of preparing projects
and in terms of committing large capital resources for their implementation
within the context of a long-term plan - will be needed. The high priority
- 54 -
now being given to small- and medium projects with shorter construction
periods appears appropriate. Attention is also rightly being given to
mine-month coal-fired thermal plants, together with long-distance trans-
mission lines to link these and other sources of cheap power to user grids.
4.16 Financial Requirements. Accelerating the growth of electric power
production in the second half of the decade, so that it surpasses the 4.5%
p.a. that appears possible for 1980-85, would of course require an increase
in investment, which in 1979 amounted to about $3.2 billion. Currently this
investment level is being maintained as a leading exception to the sharp
cutback in State capital construction in 1981.
4.17 Institutional Problems. Some weaknesses evident in the sector may
reflect institutional problems:
(a) the provincial governments have, by and large, not been able to
discharge their responsibility of adequately developing the
subtransmission and distribution systems, possibly for lack of
resources;
(b) small thermal generating stations have proliferated at the
provincial and county levels as a matter of expediency rather than
as a part of a long-range plan;
(c) tariffs are generally uniform throughout the country, while cost
structures vary;
(d) there is overstaffing with low skilled personnel;
(e) the construction of facilities within a province is normally
entrusted to the provincial construction companies, which may or
may not have the requisite expertise;
(f) there is virtually no mobility of manpower; and
(g) construction times have been generally longer than in many other
countries, particularly for hydro projects, due to a lack of
expertise, equipment and building materials or to organizational
constraints; but this problem now promises to be overcome.
4.18 Introduction of Modern Technology and Training of Personnel. An
acute shortage of manpower is felt in the "high skill" areas. To carry out
its expansion program, China will have to develop and implement a large-
scale training program for staff at various levels. Several measures can be
taken to improve training of manpower and to introduce modern methods, inter
alia:
(a) providing computer centers for power system studies;
- 55 -
(b) creating training centers, with full scale digital simulation of
the large thermal plants now proposed, for operators;
(c) establishing management training centers for technical,
administrative and financial staff;
(d) training of the staff in utilities and organizations outside China
on design, construction, operation and maintenance of power
facilities; and
(e) strengthening the power research institutes by the addition of
equipment and trained personnel.
5. OTHER SOURCES OF ENERGY
Geothermal
5.01 Geothermal resources are widely distributed since the whole of
China seems to have a relatively high geothermal gradient. Most occurrences
seem to be relatively low temperature groundwater suitable for space heat-
ing; high temperature manifestations suitable for power generation seem
to be more frequent in the mountainous western parts of the country such as
Yunnan and Xizang. Geothermal exploration in China is the responsibility of
the Ministry of Geology, which has its own drilling equipment and crews and
operates through provincial bureaus. Two projects have been identified so
far: a geothermal power generation project at Yangbajian, 50 km northwest
of Lhasa, and a district heating project in the southeast part of Beijing.
There are reported to be other small projects in the pipeline, including one
at Tianjin thought to be another district heating project.
5.02 Geothermal energy has not been developed to a significant extent
in China. Its role is likely to be limited to some urban heating systems in
the colder regions of the country - particularly Beijing, which has a high
temperature gradient - and to power generation in regions like Xizang, which
lack other energy sources.
Noncommercial Energy
5.03 Unofficial estimates put fuels extracted from the agricultural
system and from forestry at roughly 250 Mtce, or less than 30% of the
total, for about 800 million users. Average per capita use on this basis
would be about 0.6 m3 firewood equivalent annually. Rice straw appears to
be the most important traditional fuel, as firewood is not available in many
areas. Traditional fuels thus play an important role in the Chinese energy
sector, but a much smaller one than in most other countries at similar per
capita income levels. This reflects a low per capita use of traditional
fuels, necessitated by a high population density and low availability of
- 56 -
forest resources, and the very high industrial fuel demand. In forested
areas, as in many other developing countries, however, the cutting that
does take place is believed to be having a cumulative negative effects on
the nation's limited forest resources, which are badly needed for industrial
materials such as timber and wood pulp,/l so that steps may be needed to
reduce forest cutting while substituting other energy sources.
5.04 A number of approaches have been used to alleviate rural household
energy shortages. Mass afforestation campaigns have been undertaken. Coal
dust is collected in mining areas, made into balls, and distributed. Biogas
is reportedly used on a scale unprecedented in other countries; some 7
million digesters were said to have been built by mid-1979. The standard
size unit apparently meets the cooking and lighting needs of a household of
five persons, so the fraction of the rural population in households equipped
with digestors may not exceed 5%. Kerosene and other petroleum fuels do not
appear to be in general use in rural areas. Rural electrification does not
seem to include household connections in most cases, so rural household
lighting may be an area of large potential energy demand.
/1 One of the negative comments on national economic performance in 1980,
in the (April 29, 1981) Xinhua communique on fulfillment of the year's
plan, was that "trees were felled at random in many areas."
Table A.1: GROWTH OF ENERGY PRODUCTION, 1952-80
Electricity Hydro Coal Oil Natural gas Total primary
(GWh) (% p.a.) (GWh) (% p.a.) (mln tons) (% p.a.) (mln tons) (D p.a.) (Bln cu m) (% p.a.) (Mtce) (% p.a.)
1952 7,260 1,260 66.49 0.436 0.008 48.7
1952-57 21.6 30.8 14.5 27.3 54.3 14.9
1957 19,340 4,820 130.73 1.458 0.070 97.6
1957-65 16.9 10.1 7.4 29.2 41.3 8.5
1965 67,600 10,410 231.80 11.31 1.112 187.0
1965-70 11.4 14.5 8.8 22.1 20.9 10.6
1970 115,860 20,460 353.99 30.65 2.870 310.0
1970-75 11.1 18.4 6.4 20.2 25.3 9.5
1975 195,840 47,630 482.24 77.06 8.850 488.6
1975-80 8.9 4.1 5.2 6.6 10.0 5.6
1980 300,627 58,211 620.13 105.95 14.270 640.9
1952-80 14.2 14.7 8.3 21.7 30.7 9.6
Notes: (1) Mtce (million tons of coal equivalent) coefficients based on tce of 7 million kcal, with calorific values assued as
follows: coal 5,000 kcal/kg; oil 10,200 kcal/kg, natural gas 9,310 kcal/m3; hydroelectric power 2,954 kcal/kg.
(2) Oil production includes shale oil.
Source: Ministries of Electric Power, Coal Industry and Petroleum Industry.
- 58 -
Table A.2: ENERGY SECTOR INVESTMENTS, 1977-79
(Y million)
1977 1978 1979
Petroleum 1,969 3,792 2,724
Power 3,306 4,933 4,784
Coal 2,166 3,318 3,248
Total 7,441 12,043 10,756
(%) Petroleum 26 31 26
Power 44 41 44
Coal 29 28 30
National total 36,441 47,955 49,988
Energy as % 20.4 25.1 21.5
Note: Official figures on state capital construction supplied to the United
Nations Statistical Office, shown in Annex D, Table 3.2, are a little
different in every case, no doubt because of different definitions and
coverage.
Source: Tables 3.8, A.12 and A.22
- 59 -
Table A.3: OIL EXPORTS, 1975-80
(Thousand tons)
Year Crude oil Products Total
1975 9,878 2,217 12,095
1976 8,496 2,145 10,641
1977 9,107 2,169 11,276
1978 11,313 2,417 13,731
1979 13,450 3,400 16,850
1980 (planned) 13,400 4,060 17,460
Source: Ministry of Petroleum Industry.
- 60 -
Table A.4: NUMBER OF UNDERGROUND COAL MINES IN OPERATION, 1975-79
1975 1976 1977 1978 1979
Large Mines /a
Southwest 19 20 22 22 22
Northwest 19 20 25 23 27
Central-South 17 26 27 27 28
East 28 29 31 31 33
North 59 62 66 66 68
Northeast 27 30 32 32 34
Total 169 187 203 201 212
Medium Mines /b
Southwest 120 120 126 220 145
Northwest 105 90 83 102 89
Central-South 210 197 211 225 215
East 160 173 182 192 192
North 211 207 213 203 204
Northeast 208 201 200 199 195
Total 1P014 988 1,015 1,141 1,040
Small Mines /c
Southwest 221 223 238 137 208
Northwest 95 126 133 117 131
Central-South 200 239 248 269 266
East 101 94 111 124 121
North 159 163 158 159 163
Northeast 96 98 111 115 118
Total 872 944 999 921 1,007
/a Large mines - production greater than 600,000 tons per year.
/b Medium mines - production 100,000 to 600,000 tons per year.
Ic Small mines - production less than 100,000 tons per year.
Source: Ministry of Coal Industry.
- 61 -
Table A.5: COAL PRODUCTION BY TYPE AND SIZE OF MINE, 1970-80
(Thousand tons)
Underground mines
From 0.1 mln
Over 0.6 mln to 0.6 mln Under 0.1 mln
Open-pit tons per year tons per year tons per year
Year Total mines production production produciton
1970 353,988/a 1,9717 114,256 150,321 77,440/a
1971 392,288/a 12,138 134,504 157,418 88,228/a
1972 410,470/a 11,623 135,388 171,144 92,315/a
1973 416,969 13,548 134,703 174,339 94,379
1974 413,170 14,442 131,728 171,224 95,776
1975 482,240 15,711 172,599 181,777 112,153
1976 483,450 15,680 149,265 204,608 113,897
1977 550,680 14,990 173,717 227,611 134,362
1978 617,860 16,977 203,150 256,036 141,697
1979 635,540 16,557 212,811 254,946 151,226
1980 620,130 n.a. n.a. n.a. n.a.
/a Estimate.
Source: Ministry of Coal Industry.
Table A.6: LIGNITE PRODUCTION BY PROVINCE, 1955-79
(Thousand tons)
Estimated
cumulative
1955 1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1955-79
Total 2,090 8,466 8,831 12,996 13,979 15,641 17,392 18,020 20,346 20,550 23,313 24,856 25,252 302,560
Southwest
Sichuan - - - - 37 45 33 12 6 6 11 9 10 -
Guizhou - - - - 1 9 - 2 2 4 6 5 7 -
Yunnan - - - 3,514 4,129 4,206 4,462 4,461 4,906 4,295 6,034 5,746 5,484 -
Xizang - - - - - - - - - - - - - -
Northwest
Shaanxi - - - - - - - - - - - - - -
Gansu - - - - - - - - - - - - - -
Qinghai - - - - - - - - - - - - -
Ningxia - - - - - - 12 - - - - - - -
Xiniang - - - - - - - - - - - - - -
Center-South
Henan - - - - - - - - - - - - - -
Hubei - - - - - - - - - - - - - -
Hunan - - - - - - - - - - - - - -
Guangxi - - - 694 950 1,030 1,091 1,309 1,433 1,644 1,830 1,839 1,778 -
Guangdong - - - 387 429 398 402 428 473 538 590 557 428 -
East
Shanghai - - - - - - - - - - - - - -
Jiangsu - - - - 5 - - - - - - - - -
Zhejiang - - - 121 74 43 44 25 22 18 35 33 22 -
Anhui - - - - - - - - - - - - - -
Fujian - - - - - - - - - - - - -
Jianxi - - - - - - - - - - - - -
Shandong - - - - 39 43 34 71 343 369 464 504 558
North
Beijing - - - - - - - - - - - - -
Tianjin - - - - - - - - - - - - - -
Hebei - - - 115 84 58 90 272 285 325 290 155 98 -
Shanxi - - - - - - - - - - - - 4 -
Nei Monggol - - - 1,034 899 1,056 1,228 1,024 1,048 1,060 1,154 1,604 1,686 -
Northeast
Liaoning - - - 3,266 3,300 3,948 4,459 4,713 5,033 5,061 5,207 6,118 6,513 -
Jilin - - - 2,124 2,516 2,703 2,917 3,160 3,908 4,079 4,586 4,903 5,231 -
Heilongjiang - - - 1,741 1,516 2,099 2,620 2,545 2,889 3,151 3,106 3,385 3,813 -
Source: Ministry of Coal Industry.
Table A.7: ANTHRACITE COAL PRODUCTION BY PROVINCE, 1955-79
(Thousand toris)
Estimated
cumulative
1955 1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1955-79
Total 13,576 68,179 39,586 56,124 71,922 81,363 83,256 85,638 97,092 99,592 115,467 126,218 125,838 1,547,494
Southwest
Sichuan 347 4,060 - 1,216 3,848 4,179 3,716 3,645 4,745 4,655 6,5b6 6,297 6,138 -
Guizhou 177 2,326 - 2,199 2,617 4,717 2,635 3,270 4,143 3,902 4,639 5,339 5,011 -
Yunnan 107 1,240 - 1,062 2,11&8 1,127 1,214 1,2.37 1,481 1,450 935 1,654 1,439 -
Xizang - - - 1 22 30 33 47 43 24 60 33 -
Northwest
Shaanxi 180 71 - - 43 - 47 35 45 59 59 116 66 -
Gansu - 914 - 304 408 508 547 947 343 822 1,220 587 1,066 -
Qinghai - 56 - - - - - 33 - - - - - -
Ningxia - 915 - 529 754 1,050 1,394 1,576 2,197 1,757 2,189 2,654 2,299 -
Xinjiang 27 - - 100 883 472 499 482 611 513 809 661 549 -
Center-South
Henan 3,474 13,517 - 11,329 12,444 14,091 14,880 14,9b2 13,888 12,338 17,595 19,185 18,133 -
11ubei 410 1,510 - 1,886 2,315 2,142 2,135 2,180 2,821 2,986 3,767 4,326 3,087 -
Hunan 878 5,771 - 3,801 7,177 7,979 7,934 7,678 9,247 9,323 8,889 9,079 8,572 -
Guangxi 5 580 - 96 625 600 479 800 1,308 1,817 1,760 1,798 1,934 -
Guangdong 285 3,414 - 4,322 6,240 5,400 5,136 5,2u1 6,569 7,579 8,661 8,924 7,974 -
East
Shanghai - -
Jiangsu 35 124 - 76 72 313 390 522 773 678 714 846 691 -
Zhejiang - 165 - 1,250 579 306 256 243 233 214 322 448 455 -
Anhui 35 1,283 - 901 1,055 884 1,118 1,145 1,487 1,422 1,482 2,045 1,916 -
Fujian 21 935 - 892 1,340 1,773 2,137 2,239 2,574 2,736 3,262 4,008 4,559 -
Jianxi 179 2,727 - 1,650 1,586 1,969 2,388 2,669 2,794 3,082 3,681 4,717 4,679 -
Shandong 18 1,082 - 597 833 1,(35 1,208 862 1,367 1,866 2,427 2,838 2,978 -
North
Beijing 1,522 8,360 - 6,238 6,793 6,918 7,083 7,345 7,491 7,461 7,808 8,191 8,133 -
Tianjin - - - - - - - - - - - - - -
Rebei 582 3,082 - 3,066 3,451 3,439 3,988 4,582 5,029 5,431 6,746 7,820 8,106 -
Shanxi 3,911 11,898 - 11,934 14,232 19,470 20,871 20,996 24,425 25,988 28,245 30,625 33,652 -
Nei >longgol 82 421 - 7 20 29 22 27 43 55 53 57 38 -
Northeast
Liaoning t,013 2,879 - 2,166 2,115 2,437 2,619 2,785 2,693 2,849 2,933 3,302 3,312 -
Jilln 288 514 - 502 328 366 4u0 144 160 511 598 565 793 -
Hieilongjiang - 335 - - 16 137 130 - 78 55 83 76 225 -
Source: Ministry of Coal Industry.
Table A.8: BITUMINOUS STEAM ODAL PRODUCTION BY PROVINCE, 1952-79
(Thousand tons)
Estimated
cumulative
1952 1955 1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1952-79
Total 46,166 74,017 318,304 183,384 284,868 306,397 313,467 316,321 309,512 364,799 363,308 411,900 466,787 484,449 6,994,405
Southwest
Sichuan - - - - 18,295 21,332 23,109 21,817 20,740 26,112 24,284 36,200 31,633 32,232 -
Guizhou - - - - 3,745 5,405 4,527 4,237 4,709 6,905 6,612 9,320 11,343 11,341 -
Yunnan - - - - 4,353 4,083 5,610 5,710 6,066 6,528 5,483 6,532 7,440 6,614 -
Xizang - - - - 8 13 3 13 17 16 27 53 27 26 -
Northwest
Shaanxi - - - - 6,739 8,173 9,491 10,768 10,681 11,363 11,626 14,725 16,540 17,746 -
Gansu - - - - 4,496 5,707 5,667 5,937 6,370 1,539 8,105 8,426 9,226 7,684 -
Qinghai - - - - 1,118 1,183 1,340 1,529 1,584 1,827 2,024 2,277 2,497 2,158 -
Ningxia - - - - 4,199 4,767 5,033 5,494 4,457 5,482 6,436 6,916 7,577 8,197 -
Xingiang - - - - 5,488 5,444 5,053 5,066 5,652 6,551 7,404 9,046 10,132 9,712 -
Center-South
Henan - - - - 17,800 19,556 22,429 21,365 24,068 29,339 24,426 36,114 39,260 40,246 -
Hubei - - - - 745 1,190 1,410 1,190 1,216 1,539 1,578 1,876 2,109 1,502 -
Hunan - - - - 7,237 6,755 8,017 8,726 7,247 9,178 9,529 11,207 12,924 17,302 -
Guangxi - - - - 1,938 2,352 2,300 2,563 3,053 3,314 3,582 3,909 4,648 3,512 -
Guangdong - - - - 478 451 460 555 641 783 831 971 1,054 941 -
East
Shanghai - - - - - - - - - - 42 230 874 1,067 -
Jiangsu - - - - 6,916 9,710 10,622 11,438 8,361 10,664 12,431 13,370 16,224 16,566 -
Zhesiang - - - - 846 1,066 998 732 192 238 453 736 1,112 1,210 -
Anhui - - - - 14,541 16,131 16,763 17,043 13,444 17,772 19,398 20,742 22,488 22,863 -
Fujian - - - - 208 301 323 311 250 232 200 202 223 231 -
Jianxi - - - - 7,325 8,693 7,054 7,892 6,855 7,583 7,904 9,181 11,236 10,941 -
Shandong - - - - 23,457 25,564 26,829 24,461 13,372 26,801 31,125 35,300 38,659 40,845 -
North
Beijing - - - - 12 19 20 22 26 22 22 - - - -
Tianjin - - - - - - - - - - - - - - -
Hebei - - - - 32,529 35,207 36,451 38,458 41,438 46,654 37,988 38,144 49,447 50,206 -
Shanxi - - - - 41,046 41,383 40,467 43,104 46,959 50,986 51,215 59,291 67,624 75,279 -
Nei Monggol - - - - 6,446 7,381 7,064 6,694 6,526 8,562 8,874 10,380 11,358 10,887 -
Northeast
Liaoning - - - - 36,954 36,994 36,099 34,237 36,526 36,496 36,996 35,755 38,754 37,346 -
Jilin - - - - 11,487 12,459 12,392 12,366 12,803 13,137 13,415 14,068 15,269 15,363 -
Heilongjiang - - - - 26,462 25,078 23,936 24,593 26,259 29,175 31,298 32,929 37,109 42,432 -
Source: Ministry of Coal Industry.
Table A.9: COKING COAL PRODUCTION BY PROVINCE, 1955-79
(Thousand tons)
Estimated
cumulative
1955 1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1955-79
Total 44,409 197,402 134,878 179,323 207,835 216,610 208,037 193,763 238,490 235,105 267,020 317,616 327,408 3,832,123
Southwest
Sichuan 2,466 24,680 - 7,105 14,527 19,599 17,316 15,900 19,587 19,230 23,102 25,593 27,159 -
Guizhou 33 3,017 - 2,147 3,456 4,033 2,590 2,366 3,975 3,786 6,851 9,002 9,727 -
Yunnan 181 3,234 - 3,343 2,576 4,654 4,777 4,321 5,924 5,179 6,424 7,374 6,339 -
Xizang - - - - - - - - - - - - -
Northwest
Shaanxi 184 1,940 - 3,275 3,167 4,872 5,611 5,066 5,243 5,105 6,877 7,770 9,180 -
Gansu - 1,326 - 47 615 1,108 597 883 905 1,135 1,039 906 558 -
Qinghai 11 670 - 76 88 57 49 23 105 157 211 185 109 -
Ningxia - 1,961 - 3,817 4,380 4,573 5,063 3,882 4,859 5,778 6,063 6,852 7,144 -
Xiniang 89 1,991 - 536 672 657 708 742 645 1,266 1,839 1,916 1,542 -
Center-South -
Henan 193 10,919 - 15,151 16,622 17,554 16,443 17,703 21,217 16,854 24,352 26,435 26,824 -
Hubei 12 430 - 258 499 614 899 556 1,072 1,067 1,309 790 799 -
Hunan 567 4,964 - 4,281 5,543 6,642 4,297 2,718 3,575 5,241 3,933 4,716 4,801 -
Guangxi - 3,361 - 150 - - - 205 256 268 403 398 353 -
Guangdong - 711 - 479 240 460 364 427 488 519 572 625 606 -
East
Shanghai - - - - - - - - - - 874 1,067 -
Jiangsu 1,578 1,844 - 5,016 9,344 9,894 10,239 7,131 9,699 11,267 12,386 14,881 14,947 -
Zhejiang - 333 - 846 1,065 941 698 162 212 423 698 1,040 1,184 -
Anhui 3,249 10,976 - 14,497 16,131 16,628 17,043 13,444 17,623 19,200 20,445 21,956 22,344 -
Fujian - 270 - 209 301 - - - - - - - - -
Jianxi 935 3,916 - 7,043 7,087 6,443 5,619 4,870 5,509 5,694 6,778 8,159 8,332 -
Shandong 3,356 19,845 - 20,828 21,877 23,080 19,967 11,103 22,077 26,410 29,820 33,196 35,157 _
North
Beijing - - - - - - - - - - - - -
Tianjin - - - - - - - - - -
Hebei 11,388 35,160 - 29,238 33,845 32,871 35,311 38,594 44,026 35,847 36,170 46,179 46,677 -
Shanxi 1,566 14,508 - 8,852 18,849 18,753 17,281 18,630 19,438 17,669 22,442 38,496 31,530 -
Nei Monggol 62 6,072 - 4,171 4,305 4,287 4,322 4,501 6,594 6,997 8,256 8,514 8,540 -
Northeast
Liaoning 8,750 14,703 - 18,574 14,714 13,988 12,794 13,328 13,173 12,629 12,497 12,999 12,694 -
Jilin 1,139 3,656 - 6,830 3,685 3,683 4,029 4,277 7,913 7,503 7,770 8,309 8,604 -
Heilongjiang 8,650 29,940 - 22,554 24,247 21,239 22,021 22,931 24,376 25,881 26,783 30,453 41,194 -
Source: Ministry of Coal Industry.
Table A.10: EMPLOYMENT IN COAL MINING, 1970-79
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979
Total Personnel
Southwest 267,912 311,980 316,645 423,194 438,463 451,614 459,615 464,855 465,127 467,441
Northwest 242,256 290,167 306,766 269,956 296,015 324,169 342,168 353,003 364,530 363,395
Central-South 446,597 514,229 526,948 587,264 616,239 640,337 687,233 706,050 718,212 720,367
East 491,399 557,369 626,698 654,330 668,029 730,638 790,931 816,427 887,941 869,615
North 486,362 558,955 578,645 630,495 692,545 752,636 784,611 827,383 824,308 858,573
Northeast 550,127 584,660 609,906 686,357 690,683 726,648 749,925 771,352 808,531 824,601
Total 2,484,653 2,817,360 2,965,608 3,251,596 3,401,974 3,626,042 3,814,483 3,939,070 4,068,649 4,103,992
Miners in Nationally
Allocated Mines
Underground 649,234 698,082 711,606 747,730 763,117 809,565 833,730 897,375 895,085 903,579
Open pit 19,371 20,200 20,645 21,637 25,698 27,173 25,532 26,685 26,022 26,218
Total 668,605 718,282 732,251 769,367 788,815 836,738 859,262 924,060 921,107 929,797
Source: Ministry of Coal Industry.
Table A.11: COAL EXPLORATION EFFORT, 1970-79
Region 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979
Seismic Set-
Months
Southwest - - - 7.70 5.62 18.05 18.67 24.33 18.30 20.46
Northwest - - - 48.04 29.06 42.84 67.49 50.25 49.33 51.61
Central-South - - - 47.43 58.83 75.03 78.39 66.15 71.24 69.44
East - - - 119.84 131.43 108.32 122.81 134.16 149.05 139.27
North - - - 28.18 36.52 34.41 43.45 57.57 68.90 82.26
Northeast - - - 49.12 35.64 47.27 42.19 43.67 37.23 44.62
Total - _ - 300.31 297.10 325.92 373.00 376.13 394.05 407.66
Drilling Rig-
Months
Southwest 462.54 537.44 641.63 550.15 533.43 557.56 570.23 575.53 742.50 748.63
Northwest 375.30 518.49 572.34 518.67 554.60 600.46 679.17 718.52 790.44 776.38
Central-South 1,157.84 1,388.45 1,465.50 1,505.03 1,551.47 1,663.67 1,788.80 1,900.54 2,022.94 2,015.31
East 1,299.66 1,755.84 1,875.28 1,934.09 1,732.28 1,645.67 1,793.01 1,940.98 1,998.50 2,153.04
North 256.88 355.20 441.43 510.60 749.52 831.14 903.31 1,027.85 1,249.49 1,409.44
Northeast 786.82 974.47 1,031.37 1,011.53 1,054.96 1,045.49 1,115.83 1,131.24 1,240.59 1,408.09
Total 4,339.04 5,629.89 6,027.55 6,030.07 6,176.26 6,313.99 6,847.35 7,294.66 8,044.46 8,510.89 1
a,
Number of Wells
Completed
Southwest 475 923 872 640 484 534 713 850 903 1,038
Northwest 417 579 559 545 497 628 712 866 753 725
Central-South 1,210 1,485 1,617 1,385 1,218 1,406 1,266 1,499 1,365 1,336
East 1,542 2,180 2,082 1,717 1,353 1,680 2,114 2,267 1,871 1,741
North 350 451 528 582 824 948 878 1,020 1,330 1,155
Northeast 774 712 1,294 1,779 953 1,346 1,560 1,560 1,771 1,494
Total 4,768 6,330 6,953 6,648 5,329 6,542 7,243 8,062 7,993 7,489
Meters Drilled
Southwest 141,917 230,011 215,955 178,214 163,670 187,690 230,832 287,422 342,344 345,377
Northwest 157,536 184,219 204,807 194,108 197,524 237,371 276,529 328,119 314,944 318,088
Central-South 438,663 476,331 487,629 456,714 426,125 472,066 514,535 575,958 596,749 586,864
East 679,417 835,630 805,680 766,712 559,858 700,568 887,119 1,001,016 973,796 974,144
North 163,067 223,488 226,176 272,671 396,111 484,428 439,152 509,562 609,014 637,955
Northeast 364,741 401,754 411,508 572,775 539,988 660,408 658,338 662,311 678,873 657,989
Total 1,945,341 2,351,433 2,351,755 2,441,194 2,393,276 2,742,531 3,006,505 3,364,388 3,515,720 3,520,417
Source: Ministry of Coal Industry.
Table A.12: COAL INVESTMENT BY REGION, 1970-80e
(Y Million)
1980
Region 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 (est.)
Southwest 368.66 383.46 326.90 258.81 223.82 221.52 147.26 152.66 221.58 199.95 139.45
Northwest 217.10 238.96 231.76 230.85 258.58 266.25 204.43 217.74 312.33 293.86 183.49
Central-
South 475.92 429.84 447.88 412.74 406.27 381.11 308.62 367.31 513.12 457.51 325.38
East 321.67 461.09 450.12 434.88 426.06 405.74 462.02 560.82 897.45 929.93 751.08
North 147.99 163.86 216.16 304.92 409.46 491.23 399.92 465.26 758.05 751.10 667.89
Northeast 122.86 143.18 207.41 255.34 272.79 308.91 344.01 402.28 615.13 615.93 379.21
Total 1,654.20 1,820.39 1,880.23 1,897.54 1,996.98 2,074.76 1,866.26 2,166.07 3,317.66 3,248.28 2,446.50
Source: Ministry of Coal Industry.
- 69 -
Table A.13: MAJOR POWER STATIONS IN CHINA, 1979
Installed
capacity
No. Name of power station Power grid (MW)
1. Harbin Thermal Power Station Northeast China 300.0
2. Xinhua Thermal Power Station Northeast China 500.0
3. Qianqi Thermal Power Station Northeast China 299.0
4. Jilin Heat and Thermal Power Station Northeast China 450.0
5. Fengman Hydro Power Station Northeast China 553.7
6. Qinghe Thermal Power Station Northeast China 1,100.0
7. Hunjiang Thermal Power Station Northeast China 150.0
8. Liaoning Thermal Power Station Northeast China 682.0
9. Fushun Thermal Power Station Northeast China 245.0
10. Yunfeng Hydro Power Station Northeast China 200.0
11. Huanren Hydro Power Station Northeast China 294.5
12. Shuifeng Hydro Power Station Northeast China 315.0
13. Anshan Thermal Power Station Northeast China 220.0
14. Fuxin Thermal Power Station Northeast China 550.0
15. Yuanbaoshan Thermal Power Station Northeast China 300.0
16. Chaoyang Thermal Power Station Northeast China 400.0
17. Jixi Thermal Power Station Northeast China 192.0
18. Jingbohu Hydro Power Station Northeast China 96.0
19. Douhe Thermal Power Station North China 750.0
20. Tangshan Thermal Power Station North China 305.0
21. Tianjin No. 3 Thermal Power Station North China 375.0
22. Dagang Thermal Power Station North China 640.0
23. Beijing No. 1 Heat and Thermal North China
Power Station 340.0
24. Jingsi Thermal Power Station North China 200.0
25. Shijingshan Thermal Power Station North China 735.0
26. Shentou Thermal Power Station North China 350.0
27. Taiyuan No. 2 Thermal Power Station North China 250.0
28. Niangziguan Thermal Power Station North China 200.0
29. Huoxian Thermal Power Station North China 400.0
30. Matou Thermal Power Station North China 650.0
31. Zhanhua Thermal Power Station Shandong Province 250.0
32. Xindian Thermal Power Station Shandong Province 600.0
33. Laiwu Thermal Power Station Shandong Province 375.0
34. Shiheng Thermal Power Station Shandong Province 150.0
35. Jining Thermal Power Station Shandong Province 300.0
36. Xuzhou Thermal Power Station East China 500.0
37. Huaibei Thermal Power Station East China 350.0
38. Huainan Thermal Power Station East China 600.0
39. Nanjing Heat and Thermal Power Station East China 385.0
40. Tianshenggang Thermal Power Station East China 250.0
41. Jianbi Thermal Power Station East China 500.0
- 70 -
Installed
capacity
No. Name of power station Power grid (MW)
42. Wangting Thermal Power Station East China 800.0
43. Zhabei Thermal Power Station East China 464.6
44. Wujing Thermal Power Station East China 380.0
45. Minxing Thermal Power Station East China 473.0
46. Jinshan Thermal Power Station East China 250.0
47. Zhenhai Thermal Power Station East China 250.0
48. Fuchunjiang Hydro Power Station East China 297.0
49. Xinanjiang Hydro Power Station East China 662.5
50. Hunanzhen Hydro Power Station East China 85.0
51. Gutianxi Hydro Power Station Fujian Province 259.0
52. Yongan Thermal Power Station Fujian Province 100.0
53. Anyang Thermal Power Station Central China 352.0
54. Jiaozuo Thermal Power Station Central China 448.0
55. Sanmenxia Hydro Power Station Central China 250.0
56. Luoyang Heat and Thermal Power Station Central China 285.0
57. Kaifeng Thermal Power Station Central China 330.0
58. Yaomeng Thermal Power Station Central China 300.0
59. Danjiang Hydro Power Station Central China 900.0
60. Jingmen Heat and Thermal Power Station Central China 225.0
61. Qingshan Heat and Thermal Power Station Central China 662.0
62. Huangshi Thermal Power Station Central China 270.0
63. Zhelin Hydro Power Station Jiangxi Province 180.0
64. Fenyi Thermal Power Station Jiangxi Province 220.0
65. Fengtan Hydro Power Station Hunan Province 400.0
66. Zhexi Hydro Power Station Hunan Province 447.5
67. Jinzhushan Thermal Power Station Hunan Province 350.0
68. Shaoguan Thermal Power Station Guangdong Province 224.0
69. Fengshuba,Hydro Power Station Guangdong Province 150.0
70. Xinfengjiang Hydro Power Station Guangdong Province 292.5
71. Huangpu Thermal Power Station Guangdong Province 250.0
72. Maoming Heat and Thermal Power Station Guangdong Province 250.0
73. Heshan Thermal Power Station Guangxi Province 325.0
74. Xijin Hydro Power Station Guangxi Province 234.4
75. Wulashan Thermal Power Station Ningxia Province 100.0
76. Baotou No. 1 and No. 2 Thermal Stations Ningxia Province 412.0
77. Hancheng Thermal Power Station Northwest China 402.5
78. Qinling Thermal Power Station Northwest China 250.0
79. Shiquan Hydro Power Station Northwest China 135.0
80. Qingtongsia Hydro Power Station Northwest China 272.0
81. Xigu Heat and Thermal Power Station Northwest China 300.0
82. Liujiaxia Hydro Power Station Northwest China 1,225.0
83. Yanguoxia Hydro Power Station Northwest China 352.0
84. Bikou Hydro Power Station Sichuan Province 300.0
- 71 -
Installed
capacity
No. Name of power station Power grid (MW)
85. Yingxiuwan Hydro Power Station Sichuan Province 135.0
86. Yuzixi Hydro Power Station Sichuan Province 160.0
87. Gongju Hydro Power Station Sichuan Province 707.5
88. Douba Thermal Power Station Sichuan Province 300.0
89. Zhongqing Thermal Power Station Sichuan Province 296.0
90. Huayingshan Power Station Sichuan Province 150.0
91. Wujiangdu Hydro Power Station Guizhou Province 210.0
92. Qingzhen Thermal Power Station Guizhou Province 278.0
94. Yilihe Hydro Power Station Yunnan Province 321.5
95. Weihuliang Thermal Power Station Xinjiang Province 59.0
96. Hongyanchi Thermal Power Station Xinjiang Province 100.0
97. Tiemenguan Hydro Power Station Xinjiang Province 47.4
98. Lhasa Thermal Power Station Xizang 12.0
99. Najin Hydro Power Station Xizang 10.76
Source: Ministry of Electric Power.
- 72 -
Table A.14: ELECTRICITY GENERATION AND INSTALLED
GENERATING CAPACITY, 1949-79
Total Installed
generation capacity
Year (GWh) (MW)
1949 4,310 1,848.6
1952 73,260 1,964.0
1957 19,340 4,635.0
1962 45,800 13,037.2
1965 67,600 151,076.3
1970 115,860 23,770.0
1971 138,360 26,282.0
1972 152,450 29,501.0
1973 166,760 33,925.0
1974 168,850 38,108.0
1975 195,840 43,406.0
1976 203,130 47,147.4
1977 223,400 51,450.5
1978 256,550 57,122.1
1979 281,950 63,015.9
Source: Ministry of Electric Power.
- 73 -
Table A.15: HYDRO AND THERMAL ELECTRICITY GENERATION BY REGION, 1970-79
(GWh)
Central
Year N.E. North N.W. East South S.W. Total
1970
Hydro 3,350 680 2,670 4,320 6,950 2,480 20,460
Thermal 25,470 20,190 5,670 25,390 11,410 7,290 95,400
Subtotal 28,820 23,370 8,340 29,710 18,360 9,770 115,860
1971
Hydro 5,180 530 3,560 4,310 7,940 3,540 25,060
Thermal 27,200 23,720 7,160 31,170 14,250 9,800 113,300
Subtotal 32,380 24,250 10,720 35,480 22,190 13,340 138,360
1972
Hydro 6,480 410 4,010 4,380 8,780 4,760 28,820
Thermal 28,800 25,840 7,800 35,150 16,480 9,560 123,630
Subtotal 35,280 26,250 11,810 39,530 25,260 14,320 152,450
1973
Hydro 7,390 410 5,700 7,010 12,180 6,210 38,900
Thermal 29,480 27,910 7,460 37,440 16,830 8,740 127,860
Subtotal 36,870 28,320 13,160 44,450 29,010 14,950 166,760
1974
Hydro 6,020 720 6,960 7,080 13,120 7,540 41,440
Thermal 32,630 30,090 7,520 33,930 16,210 7,030 127,410
Subtotal 38,650 30,810 14,480 41,010 29,330 14,570 168,850
1975
Hydro 5,350 710 8,580 7,920 17,020 8,050 47,630
Thermal 35,810 34,240 8,430 41,570 18,390 9,770 148,210
Subtotal 41,160 34,950 17,010 49,490 35,410 17,820 195,840
1976
Hydro 3,560 560 10,060 7,150 17,170 7,140 45,640
Thermal 39,460 34,920 8,600 47,520 17,830 9,160 157,490
Subtotal 43,020 35,480 18,660 54,670 35,000 16,300 203,130
1977
Hydro 3,850 800 10,440 7,900 16,030 8,650 47,650
Thermal 39,760 37,840 10,350 52,960 23,900 10,930 175,750
Subtotal 43,610 38,640 20,790 60,860 39,930 19,580 223,400
1978
Hydro 2,690 970 9,750 6,450 15,630 9,150 44,63(J
Thermal 45,830 44,860 12,710 63,690 30,520 14,300 211,920
Subtotal 48,520 45,830 22,460 70,140 46,150 23,450 256,550
1 979
Hydro 4,746 1,376 10,416 5,996 17,178 10,408 50,120
Thermal 46,834 49,183 13,512 71,539 35,356 15,406 231,830
Subtotal 51,580 50,559 23,928 77,535 52,534 25,814 281,950
Source: Ministry of Electric Power.
- 74 -
Table A.16: HYDRO AND THERMAL INSTALLED CAPACITY BY REGION, 1970-79
(MW)
North North Central
Year Type East North West East South Southwest Total
1970 Hydro 1,308 254 912 1,328 1,764 669 6,235
Thermal 3,820 3,373 1,509 4,304 2,406 2,085 17,535
Total 5,128 3,627 2,421 5,632 4,170 2,754 23,770
1971 Hydro 1,324 288 981 1,591 2,250 1,370 7,804
Thermal 3,986 3,489 1,625 4,748 2,473 2,151 18,478
Total 5,310 3,777 2,606 6,339 4,723 3,521 *26,282
1972 Hydro 1,335 272 1,231 1,718 2,640 1,499 8,700
Thermal 4,328 3,836 1,726 5,580 3,016 2,296 20,801
Total 5,663 4,113 2,957 7,298 5,656 3,795 29,501
1973 Hydro 1,407 308 1,621 1,893 3,243 1,827 10,299
Thermal 4,611 4,621 1,928 6,655 3,363 2,431 23,626
Total 6,018 4,929 3,549 8,548 6,606 4,258 33,925
1974 Hydro 1,456 339 1,964 2,198 3,872 1,988 11,817
Thermal 5,113 5,310 2,120 7,577 3,560 2,583 26,291
Total 6,569 5,649 4,084 9,775 7,432 4,571 38,108
1975 Hydro 1,564 397 2,290 2,681 4,315 2,181 13,428
Thermal 6,036 6,026 2,274 8,516 4,484 2,608 29,978
Total 7,600 6,423 4,564 11,197 8,799 4,789 43,406
1976 Hydro 1,574 428 2,543 2,846 4,787 2,477 14,655
Thermal 6,676 6,252 2,434 9,438 4,950 2,720 32,492
Total 8,251 6,680 4,977 12,284 9,737 5,197 47,147
1977 Hydro 1,619 517 2,666 3,097 5,071 2,795 15,765
Thermal 7,253 7,182 2,504 10,327 5,560 2,848 35,686
Total 8,872 7,699 5,170 13,424 10,631 5,644 51,451
1978 Hydro 1,658 573 2,833 3,341 5,841 3,032 17,277
Thermal 8,008 8,123 2,596 11,299 6,735 3,038 39,845
Total 9,666 8,696 5,428 14,640 12,576 6,070 57,122
1979 Hydro 1,713 597 2,933 3,784 6,528 3,556 19,110
Thermal 7,919 9,582 2,936 12,688 7,517 3,210 43,906
Total 9,632 10,179 5,869 16,472 14,045 6,766 63,016
Source: Ministry of Electric Power.
- 75 -
Table A.17: GENERATING CAPACITY BY SIZE OF UNIT, 1979
Unit size Installed capacity Percentage
(MW) (MW) (%)
>250 2,890 4.6
200-250 3,885 6.2
100-200 13,745 21.8
50-100 12,599.1 20.0
6-50 18,564.2 29.5
0.5-6 6,086.4 9.6
<0.5 5,246.3 8.3
Total 63,015.2 100.0
Source: Ministry of Electric Power.
- 76 -
Table A.18: POWER STATION FUEL CONSUMPTION AND EFFICIENCY, 1979
Fuel consumption Energy Consump-
Natural genera- Unit tion Effi-
Coal Oil ggs Total /a tion /b (kg/ (kcal/ ciency
Region (106 ton) (10 m3) (106 ton) (GWh) kWh) kWh) (x)
(a) Northeast
China 16.4 6.1 665.2 18.4 45,977 0.401 2,807 30.6
(b) North
China 23.5 2.1 7.2 19.4 47,522 0.408 2,856 30.1
(c) Northwest 7.6 0.1 80.6 5.5 12,799 0.426 2,982 28.8
(d) East
China 29.4 6.1 610.2 28.9 68,745 0.420 2,940 29.3
(e) Central-
South
China 18.7 2.0 0.6 14.8 32,728 0.453 3,170 27.1
(f) Southwest
China 11.1 .. 305.7 7.0 14,590 0.479 3,353 25.6
National
overall 106.7 16.4 1,668.9 94.0 222,352 0.422 2,954 29.2
/a Converted to standard coal equivalent of 7,000 kcal/kg. Heat rates used in
conversion:
Coal 4,415 kcal/kg
Oil 10,200 kcal/k!
Natural gas 9,310 kcal/m .
/b From thermal stations greater than 6 MW only. Including 9,616 GWh produced
in smaller plants, thermal generation by fuel was as follows:
Coal 161,502 GWh
Oil 55,590 GWh
Natural gas 5,260 GWh
Source: Ministry of Electric Power.
Table A.19: ELECTRICITY SALES BY CONSUMER CATEGORY, 1949-79
Energy sales (GWh) /a (% figures in parentheses)
Residential
Year & commercial Industrial Agricultural Transportation Others Total
lb /c /d
1949 490(14.2) 2,390(69.0) 20 (0.6) 20 (0.6) 540(15.6) 3,460(100)
1952 817(13.1) 4,981(80.0) 43 (0.7) 59 (0.9) 327 (5.2) 6,227(100)
1957 1,975(11.9) 13,605(82.9) 108 (0.7) 70 (0.4) 649 (4.0) 16,407(100)
1965 3,839 (6.8) 47,723(84.0) 3,710 (6.5) 332 (0.6) 1,198 (2.1) 56,802(100)
1970 -- -- -- -- _ _ _
1971 4,558 (4.5) 84,203(83.2) 10,433(10.3) 452 (0.4) 1,628 (1.6) 101,274(100)
1972 5,305 (4.3) 101,784(82.3) 12,989(10.5) 707 (0.6) 2,815 (2.3) 123,600(100)
1973 5,830 (4.3) 110,194(81.6) 15,823(11.7) 1,126 (0.8) 2,133 (1.6) 135,106(100)
1974 6,453 (4.7) 107,860(79.5) 17,982(13.3) 1,171 (0.9) 2,242 (1.6) 135,708(100)
1975 7,150 (4.6) 124,782(79.5) 20,877(13.3) 1,435 (0.9) 2,725 (1.7) 156,969(100)
1976 7,721 (4.7) 128,966(78.3) 23,154(14.1) 1,846 (1.1) 3,011 (1.8) 164,698(100)
1977 8,498 (4.7) 142,691(78.5) 24,834(13.7) 2,104 (1.2) 3,564 (1.9) 181,691(100)
1978 8,967 (4.3) 166,087(79.0) 28,742(13.5) 2,280 (1.2) 4,163 (2.0) 210,239(100)
1979 11,252 (4.8) 184,636(79.0)/e 32,493(13.9) 1,323 (0.6) 3,873 (1.7) 233,577(100)
/a Excludes self-generation by industries and mini-hydro owned by communes and brigades.
/b Urban areas only.
/c For details of industrial electricity use, see Table 7.4.
/d Includes rural residential and commercial use.
/e Of which: 35,057 GWh to light industries and 149,579 GWh to heavy industries.
Source: Ministry of Electric Power.
- 78 -
Table A.20: ELECTRIFICATION OF COMMUNES AND BRIGADES BY REGION, 1979
% of communes % of brigades
Region electrified electrified
(a) Northeast China 98.2 94.5
(b) North China 88.0 78.3
(c) Northwest China 70.0 47.8
(d) East China 90.2 60.7
(e) Central and South China 93.3 64.1
(f) Southwest China 82.6 46.9
National overall 87.1 62.6
Source: Ministry of Electric Power.
- 79 -
Table A.21: ELECTRICITY TARIFFS, 1980 (FEN /a PER kWh)
Category of consumers Northeast China Other areas Average tariff
Lighting 9.0 15.0-20.0 16.0
Commercial and
small industries 7.0 8.5 7.9
Large industries
Demand charge (Yuan /a
per month)
on maximum demand 5.0 6.0 }
on KVA installed 3.5 4.0 } 6-.2/b
Energy charge 3.5 5.8 }
Agriculture
Low tension - 5.5-6.0 }
High tension at bulk } 5.4
supply 3.5 }
National average - - 6.47
/a US$1 = Yuan 1.5, US¢1 = Fen 1.5.
/b With demand charge prorated over KWh used.
Source: Ministry of Electric Power.
- 80 -
Table A.22: ELECTRICITY INVESTMENT, 1975-79
(Y Million)
1975 1976 1977 1978 1979
Amt. (%) Amt. (%) Amt. (%) Amt. (%) Amt. (x)
Genera-
tion 2,286 (79.7) 2,651 (82.3) 2,701 (81.7) 3,994 (81.0) 3,746 (78.3)
Transmis-
sion &
substa-
tion fa-
cilities 455 (15.9) 450 (14.0) 484 (14.6) 693 (14.0) 815 (17.0)
Others
(includ-
ing de-
sign &
research) 127 (4.4) 119 (3.7) 121 (3.7) 246 (5.0) 223 (4.7)
Total 2,868 (100.0) 3,220 (100.0) 3,306 (100.0) 4,933 (100.0) 4,784 100.0)
Source: Ministry of Electric Power.
- 81 -
Table A.23: ELECTRICITY INDUSTRY STAFF, 1979
Number Percentage
Technical staff 59,000 6.3
Administrative staff 113,000 12.1
Service staff 100,000 10.7
Labor 554,000 59.2
Apprentices 87,000 9.3
Others 23,000 2.4
Total 936 000 100.0
Source: Ministry of Electric Power.
- 82 -
Table A.24: THEORETICAL, EXPLOITABLE, AND INVESTIGATED
HYDRO POTENTIAL BY REGION
Theoretical Exploitable
Annual Annual Investi-
Region Capacity energy Capacity energy gated /a
(MW) (GWh) (Mw) (GWh) (MW)
Northeast 12,126.6 (1.8%) 106,230 11,994.5 38,391 6,354.5
North 12,299.3 (1.8%) 107,740 6,919.8 23,225 3,622.5
Northwest 84,176.9 (12.5%) 737,390 41,936.7 190,493 7,919.0
East 30,048.8 (4.4%) 263,230 17,902.2 68,794 5,824.6
South- 64,083.7 (9.5%) 561,380 67,434.9 297,365 42,415.8
Central
Southwest 473,311.8 (70.0%) 4,146,210 232,343.3 1,305,036 61,678.1
Total 676,047.1 (100.0%) 5,922,180 378,532.4 1,923,304 127,714.5
/a Not included are those which have already been developed and are being
constructed.
Source: Ministry of Electric Power.
- 83 -
Table A.25: ADDITIONS TO GENERATING CAPACITY
ANTICIPATED BEFORE 1985, BY REGION /a
New capacity Net
Region Hydro Thermal Total Retirement additions
Northeast China 900 2,200 3,100 - 3,100
(Baishan)
North China - 2,200 2,200 - 2,200
East China 350 4,175 4,525 1,020 3,505
Central and 2,300 1,955 4,255 - 4,255
South China (Gezhouba
& Dahua)
Northwest China 1,500 - 1,500 - 1,500
(Longyangxia)
Southwest China 420 - 420 - 420
(Wujiangtu)
Total 5,470 10,530 16,000 1,020 14,980
/a As of November 1980. Excludes small-scale projects.
Source: Ministry of Electric Power.
MINISTRY OF ELECTRIC POWER
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