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Accelerate the strategic adjustment of China’s energy structure. Source: China Economic Times, 2009-03-02. Adjusting the energy structure is one of the key tasks facing China’s energy development, and it is also an important factor in ensuring China’s energy security. Accelerating the strategic adjustment of China’s energy structure means reducing the demand for and consumption of petrochemical energy resources, decreasing reliance on international oil, lowering the proportion of coal-based power generation, vigorously developing new and renewable energy sources, and giving priority to hydroelectric power development. I. Reducing dependence on international oil to ensure oil security: In China’s energy development strategy, reducing reliance on international oil is driven by concerns regarding oil security. According to statistics, in 2007 China produced 186.657 million tons of crude oil, a year-on-year increase of 1.6% ； In 2007, China’s net import of crude oil was 159.28 million tons, a year-on-year increase of 14.7%. In 2007, China’s apparent crude oil consumption was approximately 346 million tons, representing a 7.3% increase year-on-year and reaching a historical high. The external dependence on crude oil reached 46.05%. The increasing dependence of China on foreign sources for crude oil demand will undoubtedly place significant pressure on China’s oil security. Oil security is at the core of China’s energy security. Oil security is related to **fundamental interests and the security of the national economy**. Amid the current global financial crisis, China’s energy development strategy should still give top priority to oil security. The root cause of China’s oil security issues lies in the increasingly acute contradiction between domestic resources and demand, and it is also affected by fluctuations in international oil prices. Furthermore, China’s growing demand for foreign oil resources will also have a significant impact on the geopolitics of global oil security. Therefore, to address the challenges related to oil security and improve its level, China should take a global perspective, draw on the experiences of developed as well as developing countries from a strategic standpoint, reduce its reliance on oil imports, actively participate in the international oil market competition, strengthen cooperation in the field of oil, accelerate the establishment of a modern oil market system, develop a sound modern oil reserve system, and formulate a comprehensive set of measures and strategies to ensure oil security. II. Reducing the share of coal-fired power to protect the ecological environment: In the development of China’s power industry, it is necessary to reduce the role of coal-fired power in order to achieve energy conservation and emission reduction as well as to protect the ecological environment. In 2007, China’s installed power generation capacity exceeded 700 million kilowatts, ranking second in the world after the United States. Electricity generation reached 3,255.9 billion kWh, with an average annual growth rate of over 13.2% for 7 consecutive years. However, China’s power industry structure still needs to be adjusted. The irrationality of China’s power industry structure is mainly reflected in two aspects: one is the irrational power source structure. In terms of the power source structure, the main issue is the slow pace of development in hydropower, as well as the sluggish progress in nuclear power and new energy sources; small-scale thermal power still accounts for a large proportion. In 2007, of China’s total power generation capacity, thermal power accounted for 554 million kilowatts, representing 77.7% ； The installed capacity for hydropower is 148 million kilowatts, accounting for 20.4% ； Nuclear power capacity is 9.068 million kilowatts, accounting for 1.3% ； Wind power and new energy account for over 6 million kilowatts, representing only 0.8%. The excessive proportion of thermal power generation leads to an increasing demand for coal. Meanwhile, the growing demand for coal in electricity production results in a greater reliance by the power industry on coal supplies and railway transportation, putting significant pressure on efforts to reduce emissions and conserve energy. Second, the power supply layout is unreasonable. The main issue is the uneven distribution of energy resources across China’s eastern, central, and western regions; the eastern coastal areas have an excessive amount of thermal power generation capacity, which leads to increased environmental pressures. Therefore, to promote energy conservation and emission reduction as well as the development of China’s power industry, it is necessary to adjust the structure of power generation sources, optimize the layout of these sources, and establish a development model for the power industry that focuses on the optimized development of coal-fired power, emphasizes the vigorous development of hydropower, actively promotes nuclear power, accelerates the development of new energy sources, and ensures a rational distribution of power generation sources across the eastern, central, and western regions. III. Vigorously develop new and renewable energy sources. Looking at the global trends in energy development, the exploitation and utilization of various new and renewable energy sources are attracting considerable attention. Among the development and utilization of various new and renewable energy sources, the research on the development of new and renewable energy sources such as hydroelectric power, nuclear power, solar energy, wind energy, geothermal energy, ocean energy, and biomass energy is progressing most rapidly. China needs to learn from and draw on the technologies and experiences of developed countries, vigorously promote various forms of power generation such as hydro, wind, solar, and nuclear energy, make active use of biomass energy, and regard it as an important part of its energy security strategy in order to accelerate its development and gradually reduce its over-reliance on petrochemical fuels such as oil and coal. It is foreseeable that over the next two to three decades, new energy and renewable energy sources will become one of the fastest-growing new industries in China. Given the current state of development in new and renewable energy sectors, China’s top priority is to establish a comprehensive roadmap for the advancement of technologies related to these areas. It is necessary to integrate existing industrial resources as soon as possible, organize existing resources, support policies, and the pattern of energy investment over the next decade or so, in order to create an environment conducive to the efficient development of new and renewable energy. This will enable sustainable energy development and effective utilization, thereby supporting the sustainable economic and social progress of China. IV. Give priority to hydropower development. Placing hydropower development in an important position within China’s energy structure adjustment is determined by the country’s conditions in terms of energy development. Our country is the world’s second-largest energy producer and also the second-largest energy consumer, and it relies on coal as its main source of energy. The white paper titled \"China’s Energy Situation and Policies\" shows that in 2006, China’s total consumption of primary energy was 2.46 billion tons of standard coal. Coal accounts for 69.4% of primary energy consumption, while other forms of energy account for 30.6%. Among them, renewable energy and nuclear power account for 7.2%, while oil and gas have seen an increase. The energy structure dominated by coal determines the dominant role of coal-fired power units in China’s overall power supply and within the thermal power sector. Coal-fired power generation accounts for 56% of China’s total coal consumption and is the main stage in the conversion of coal energy. Sulfur dioxide emissions from coal-fired power plants account for over 50% of the country’s total emissions, and are one of the main causes of acid rain pollution. According to statistics from relevant authorities, China’s annual total emissions of sulfur dioxide have exceeded 25 million tons, causing one-third of the country’s territory to be polluted by acid rain. The economic losses amount to over 100 billion yuan per year, posing a direct threat to the safety of 1.3 billion people and 1.6 billion mu of arable land. The energy structure dominated by coal has led to an increasingly prominent conflict between coal resources and transportation, as well as worsening environmental problems. At present, coal transportation in our country accounts for more than one-third of the railway’s freight capacity. On the one hand, there is a significant gap between the level of railway transportation in our country and that of international standards ； On the other hand, China’s pattern of transporting coal from the west to the east and from the north to the south over long distances and at excessive capacity further exacerbates the shortage of transport capacity. The pollution caused by coal exists not only at the point of its final consumption but also during its early stages of extraction. According to experts, for every ton of coal mined, 2.5 tons of groundwater are damaged. For a country like ours that suffers from a severe shortage of water resources, the situation is extremely serious. Coal mining also causes surface subsidence, as well as wastewater, waste gas, and waste residues, as well as diseases such as silicosis. Therefore, it has become an urgent task for China’s energy sector to find every possible way to reduce coal consumption in order to alleviate resource shortages and minimize the resulting environmental pollution, and actively developing hydropower is one of the effective ways to address this issue. Hydropower is an economical and clean renewable energy source. It is considered economical because hydroelectric power serves as an excellent source of regulated power compared to renewable sources such as wind and solar energy. Moreover, the development of hydroelectric power brings about various benefits such as flood control, irrigation, water supply, shipping, aquaculture, and tourism – benefits that are not available from the development of fossil fuel or nuclear energy sources ； It is considered clean because, in the process of generating electricity through hydropower, it does not emit harmful gases, does not pollute water resources, nor does it consume water resources; there is also no risk of nuclear radiation. Compared to electricity generated by burning fossil resources, the development of hydropower is more conducive to sustainable development, both in terms of resources and the environment. Therefore, hydropower development should be given priority in China’s future energy development. Developing hydropower can effectively improve China’s energy structure. Looking at China’s energy supply structure, coal currently forms the main source of energy in the country, while there is a shortage of oil and natural gas resources. The per capita amount of these resources is about 10% of the world average. Energy development is constrained by both resource shortages and environmental pollution; therefore, it is a very important task to adjust the energy structure and reduce the proportion of coal in primary energy consumption. China’s theoretical potential for hydroelectric energy amounts to nearly 700 million kilowatts, accounting for 40% of the country’s total conventional energy resources. It is the second-largest source of energy after coal, and China possesses the largest total amount of hydroelectric energy resources in the world. Based on the current level of survey and design capabilities, China has a technically exploitable potential for hydropower of 2.47 trillion kilowatt-hours. If fully developed, it could provide energy equivalent to 1 billion to 1.3 billion tons of raw coal per year. It is evident that developing hydropower can effectively improve China’s energy structure, and making good use of its abundant hydroelectric resources is an inevitable choice for China’s energy policy. (Cao Xin)