Regarding the significant development of natural gas in China, there is an excellent post on China Energy Network; what are people’s opinions on this issue?

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China’s natural gas era may be coming to an end. China’s natural gas era may be coming to an end. November 15, 2016. For many years, I have been committed to promoting the development of natural gas in China; I have been an active advocate in this field, conducting numerous studies, writing many articles, and even publishing several books. I have always believed that China’s natural gas era is inevitable, as no other energy source can replace natural gas’s crucial role in the energy mix. But today I began to waver; I started to believe that natural gas is not irreplaceable, and that the era of natural gas in China may come to an end. New energy technologies are advancing at a rapid pace, sounding the death knell not only for coal and oil but also for the natural gas industry. Leader Program On January 8, 2015, eight departments including the National Development and Reform Commission and the National Energy Administration issued the “Implementation Plan for the Energy Efficiency Leader System”. The so-called “energy efficiency leaders” refer to products, enterprises, or entities that have the highest energy utilization efficiency within their comparable category. **The National Development and Reform Commission will work with relevant departments to formulate incentive policies to encourage the research and development, promotion, and dissemination of energy-efficiency \"leader\" products. Within the implementation plan for the Leaders, there is a “Photovoltaic Leaders” program. This is a special initiative by the **National Energy Administration** aimed at promoting the application of advanced photovoltaic technologies and industrial upgrading, as well as strengthening the quality management of photovoltaic products and projects, through the establishment of demonstration bases for advanced photovoltaic power generation technologies. **The Energy Bureau has included coal mining subsidence areas in the development of photovoltaic leading technology bases, and bidding will begin this August. On August 29, the Development and Reform Commission of Yangquan City, Shanxi Province, released a list of potential investors for the 2016 project related to the \"Yangquan Coal Mining Subsidence Area Advanced Technology Photovoltaic Power Generation Demonstration Base.\" Twelve companies were identified as candidates for inclusion in this advanced photovoltaic base. GCL New Energy offered the lowest electricity price at 0.61 yuan/kWh, with another 10 companies offering prices below 0.8 yuan/kWh. 0.61 yuan/kWh is the residential electricity price in Shanghai after cross-subsidies, while the electricity price for industrial and commercial use in Shanghai is 0.85–0.92 yuan/kWh. Excluding value-added tax, GCL’s quoted electricity price is only 0.5063 yuan/kWh, which is lower than the electricity price for large industrial users in Shanxi at 0.5092 yuan/kWh; meanwhile, the electricity price for general industrial and commercial users in Shanxi ranges from 0.7538 to 0.7888 yuan/kWh. This electricity price means that in Shanxi, and indeed in most industrial and commercial sectors across the country as well as in many residential areas, people can become self-sufficient through distributed photovoltaic power generation, without needing any electricity price subsidies. List of enterprises recommended for recognition at the Yangquan base in Shanxi, ranked by investment amount and the percentage reduction in electricity prices applied: 1. GCL New Energy: 0.61, 7.80%; 2. TBEA Xinjiang Energy: 0.72, 8.60%; 3. Three Gorges New Energy: 0.72, 8.60%; 4. Jinko Power: 0.71, 27.60%; 5. Zhongmin New Energy: 0.74, 82.36%; 6. State Power Investment Dongfang Energy: 0.75, 23.50%; 7. China Energy Conservation and Environmental Protection Solar Technology: 0.77, 21.40%; 8. Shanxi Zhangze Power: 0.78, 20.40%; 9. Sungrow Power Supply: 0.78, 20.40%; 10. CGN Solar Energy Development: 0.79, 19.40%; 11. Changzhou Trina Solar: 0.81, 8.40%; 12. Shanghai Aerospace Auto Electromechanical: 0.88, 10.20%. The average percentage reduction is 0.74823.60%. In mid-September, I met Zhu Gongshan, the chairman of GCL, who said that the price quoted by GCL was the result of careful calculations, with a still 12% return on investment. Thanks to continuous technological advancements, many photovoltaic companies can now afford this price. He said that if you don’t believe it, just wait and see – at the next bidding session for \"Pioneer\", many companies will offer prices below 0.61 yuan/kWh. As expected. On September 22, the investors of the “Pioneer” project in Baotou, Inner Mongolia, submitted documents in Beijing. Huadian Inner Mongolia Company and Qingdao Changsheng Ridian both submitted the lowest bid of 0.52 yuan/kWh; there were as many as 10 companies that bid at a price below 0.61 yuan/kWh. At 0.52 yuan/kWh on the user side, after deducting value-added tax, it amounts to only 0.4316 yuan/kWh. The electricity price for large-scale industries in the western region of Inner Mongolia, which relies on low electricity rates to attract investment, is 0.4813 yuan/kWh. With such low costs for green electricity, many companies can obtain electricity at prices **lower than those offered by the grid, simply by using solar photovoltaic systems on their rooftops or surrounding areas. What does this mean? List of enterprises recommended for recognition at the Baotou base in Inner Mongolia, ranked by investment amount and the percentage reduction in electricity prices: 1. Huadian Inner Mongolia Energy: 0.526, 5.00%; 2. Qingdao Changsheng Ridian Solar Technology: 0.526, 5.00%; 3. Northern United Power: 0.536, 6.25%; 4. Changzhou Trina Solar: 0.567, 0.00%; 5. Yingli Green Energy (China): 0.567, 0.00%; 6. Guodian Investment Inner Mongolia New Energy: 0.577, 1.25%; 7. TBEA Xinjiang Energy: 0.597, 3.75%; 8. JA Solar (China): 0.597, 3.75%; 9. Zhejiang Chint New Energy: 0.597, 3.75%; 10. United Photovoltaic (Changzhou): 0.67, 5.00%; 11. Beikong Clean Energy Group: 0.63, 78.75%. The technological progress of photovoltaic enterprises is rapid, and their potential for reducing prices continues to increase. GCL has a “Roadmap for Grid Parity in Photovoltaic Power Generation”, which is posted in the company’s lobby so that every visitor can see it. Their goal is to reduce the weighted levelized cost of electricity for grid connection to 0.381 yuan/kWh in 2019, with component costs at 2,400 yuan/kW and the overall cost of photovoltaic systems at 5,470 yuan/kW. GCL’s roadmap for achieving grid-parity in photovoltaic power generation: Target years – 2016, 2017, 2018, 2019. Cost of photovoltaic power generation systems per watt: 6.89, 6.15, 5.82, 5.47 yuan/watt. Cost of solar panels per watt: 3.42, 2.82, 2.62, 2.4 yuan/watt. Cost of other related installations per watt: 3.47, 3.35, 3.22, 3.07 yuan/watt. Target cost per kWh: 0.40, 0.40, 0.40, 0.40 yuan/kWh. Weighted cost per kWh: 0.528, 0.462, 0.422, 0.381 yuan/kWh. JA Solar is a well-known domestic manufacturer of photovoltaic panels and modules. In the “2016 second bidding process for photovoltaic modules conducted by Jinan Energy Construction and Development Co., Ltd.” it submitted bids at a price of 3,000 yuan/kW for the modules, achieving this target one year earlier than GCL’s plan. This is also the reason why Huadian was able to reduce the electricity price in Baotou to 0.52 yuan per kWh. At such prices, the day when photovoltaic systems are everywhere is not far off. Super power banks. One of the main reasons why people have been skeptical about photovoltaic technology is its instability and uncertainty. The sun is not present 24 hours a day; there are only 7 to 8 hours each day during which it can effectively generate electricity, and the sun may not be shining every day. The biggest obstacle to solar energy becoming a primary energy source is its inability to provide a continuous, safe, and stable supply of electricity. On January 29, 2016, Musk announced in Paris: “We will continue to sell the Powerwall (home battery) and Powerpack (commercial battery pack). The company is conducting extensive tests around the world, and the results are promising; we will therefore introduce a second generation of Powerwall.” By then, its functions will change significantly. ” One of the innovative products introduced by Musk is a super power bank, which will fundamentally change the way the world operates as well as the patterns of energy supply and demand. Tesla will produce two versions of the Powerwall: 7kWh and 10kWh, priced at $3,000 and $3,500 respectively. According to Tesla’s research, a television consumes 0.1 kW of power, and room lighting using LEDs also uses around 0.1 kW. American refrigerators consume approximately 4.8 kWh per day, while washing clothes and using electric dryers requires 2.3 to 3.3 kWh per cycle. They believe that a Powerwall with a capacity of 7 kWh is sufficient to meet the electrical needs of an American household throughout the day, whereas a 10 kWh unit not only meets those needs but also provides a 50% reserve capacity. At the heart of the Powerwall is a lithium battery pack, along with a bidirectional DC-AC inverter, a metering device, and a control management system. For users with high energy demands, it is possible to purchase multiple Powerwalls and connect them in series; up to 9 units can be linked together to create a Powerwall system with a capacity of 63–70 kWh, enabling home users to have power supply sufficient for over a week. For business customers, Tesla offers power storage systems with capacities of 500–10,000 kWh to meet the needs of various business users. 80% of Beijing residents use no more than 2,880 kWh of electricity per year, which is an average of 7.89 kWh per day. In fact, most residents don’t need that much electricity these days. As of November this year, my family has used only 1,299 kWh of electricity so far, which is an average of 4.745 kWh per day; it is estimated that the total usage for the whole year will not exceed 1,800 kWh. This is due to the widespread use of various energy-saving products; LEDs have completely replaced incandescent lamps and energy-saving lamps. An incandescent lamp with an illuminance of 800 lm consumes 60 W, while an energy-saving lamp uses 13 W – LEDs require only 9 W. LCDs, which became widespread in 2020, need just 2.13 W. Currently, the lighting load for an American-style courtyard is 100W, while that for a Chinese-style courtyard rarely exceeds 50W. ““Gree air conditioners consume only one kilowatt-hour per night” is not merely a slogan; it reflects the continuous pursuit of improved energy efficiency in air conditioners. The higher the air-conditioning energy efficiency ratio, the less electricity it consumes, which means lower costs and greater popularity in the market. To adapt to this market trend, air conditioner manufacturers have been increasing the energy efficiency ratio, from 3.0 to 4.0, 5.0, 6.0, and even up to 7.0 – meaning that 1 kWh of electrical energy can generate 7 kWh of cooling capacity. **The new energy efficiency standards require that fixed-frequency air conditioners with a minimum energy efficiency rating of Level 1 must have a cooling capacity of 3 kW, and they may consume only 0.83 kWh of electricity per hour. This is the minimum standard; if this standard isn’t met, manufacturing is not allowed. In other words, the Coefficient of Performance (COP) must be at least 3.6. All televisions these days are LED, and they have completely dominated the market; if you want to buy a cathode-ray tube television with high energy consumption, you’ll have to go to an antique shop ； Traditional computers have 600W; 300W is for the motherboard and 300W is for the monitor. Today’s laptop batteries only require 45W, and they can provide power for 4–6 hours after being fully charged ； The iPad has a 10W charging capacity, allowing it to be used for 8-10 hours on a single charge ； The smartphone has only 5W, allowing it to be used for over 10 hours on a single charge. Advances in various energy-saving technologies have led to a sharp and irreversible decline in electricity demand. In September I was at GCL, where I saw the super power banks they produce, and they have already started exporting them. What’s remarkable about the Chinese is their ability to continuously reduce costs. In the first half of 2016, China’s production of lithium batteries was 28.15 GWh, representing a 30.5% increase compared to the previous year; this accounted for nearly half of the global total. It is estimated that the annual production volume will reach 62.34 GWh. In the first half of 2016, global lithium-ion battery production amounted to 56.42 GWh, representing a 20.8% increase on a year-on-year basis; it is estimated that the world’s production for the whole year will reach 115.38 GWh. With such a growth rate in production capacity, energy storage batteries will soon follow in the footsteps of photovoltaic cells, giving rise to another wave of widespread adoption and price reductions that is difficult to stop. Mobile energy storage for automotive power batteries has high requirements; their operating environment is also quite harsh. In contrast, the operating environment for stationary energy storage of residential and commercial battery systems is much better. It is hoped that an electric vehicle will retain 80% of its battery capacity after 2000 cycles of charging and discharging. There are almost no restrictions on home and commercial energy storage batteries, with 3,000 cycles generally serving as a benchmark. Some batteries from discarded cars can still be used for stationary energy storage; they can still be utilized even if their capacity is reduced to 20%. This is of great significance for reducing energy storage costs and makes local energy self-sufficiency possible. Green energy buildings: The level of energy efficiency in buildings has also been improving in recent years. More and more new buildings are adopting double-glazed windows to provide insulation both inside and outside the building. Many families have also begun to install wall insulation materials and replace their doors and windows with those made of insulated aluminum, which results in a significant reduction in energy consumption. Recently, several households in our courtyard have been busy installing external insulation. Since our residential complex uses natural gas wall-mounted boilers for heating, the houses already had internal insulation. With the addition of external insulation now, the combined efficiency of both types of insulation will exceed 85%. This will effectively halve our demand for natural gas. This year, during the National Day holiday, I spent over 30,000 yuan to replace all the windows and doors in my mother’s home with energy-efficient aluminum alloy windows and doors featuring double glazing and thermal breaks. I also added internal insulation to the balcony. This has not only improved the living environment but also reduced energy consumption, greatly enhancing the home’s habitability. This investment is affordable for most ordinary Beijing residents. Such renovations greatly enhance both the value of the property and the comfort of living in it; they also make a significant contribution to energy conservation and reducing energy costs. In 2015, Beijing and Hebei began implementing a 65% energy efficiency standard for public buildings and a 75% energy efficiency standard for residential buildings. Residential buildings require only about 10 W of heat per square meter per hour; starting from the thermal power plant, this amounts to 6.25 metric tons of standard coal per square meter of building per year. The energy consumption within a single heating cycle is 30 kWh. A 90-square-meter residence consumes only 0.9 kWh of energy per hour for heating, resulting in an annual energy consumption of 2700 kWh. With such standards, it is entirely possible to meet users’ energy needs through solar power or a combination of solar power and air-source heat pumps. In an environment with a winter temperature of -9°C, air-source heat pumps can achieve an energy efficiency ratio of 2; 1 kWh of electricity can generate 2 kWh of heat. -At 9℃, such conditions generally occur at night in the North China Plain during winter. By using hot water to store energy when temperatures are higher during the day, a higher energy efficiency ratio can be achieved; on average, this ratio can reach 2.8 in winter. An average of 7.7 kWh of electricity per day is sufficient to meet the heating needs of a 90-square-meter household, and this requirement can be met through photovoltaic and wind power systems with a capacity of 1 to 1.5 kW installed on the roof, along with a water storage tank for hot water. With such energy-saving and renewable energy technologies, there are no emissions at all, rendering thermal power plants and thermal distribution networks unnecessary. Living in buildings with such high energy efficiency standards, and using variable-frequency air conditioners with high energy efficiency for cooling in summer, it’s not an unrealistic goal to use just one unit of electricity per night. An inverter air conditioner with an energy efficiency ratio of 4.0 can convert 1 kWh of electricity into 3.44 kWh of cooling capacity. In a 12 square meter room, continuous cooling for 9 hours can provide over 30 W of cooling power per square meter, which is more than sufficient to meet the cooling needs. GCL and Greentown formed a joint venture called Blue City, which is dedicated to building green towns around large cities, with a population of around 30,000 people. These towns offer various modern living facilities, aiming to attract innovative enterprises and young people. They plan to rely entirely on solar energy and energy-efficient buildings to meet all the town’s energy needs, including those for lighting, heating, cooling, transportation, and information systems. There will be no need for external energy sources – neither electricity from the grid nor gas from pipelines. Instead, self-sufficiency in energy and zero emissions will be achieved through solar energy on the buildings, as well as super-capacitors in each household and electric vehicles. There is a company in Changping, Beijing, that uses interlocking bricks made from a new type of insulating building material to construct farmhouses for farmers; the energy efficiency of such buildings exceeds 80%. A few ordinary solar water heaters and two large insulated water tanks are sufficient to meet the heating needs of a farming family during winter. It’s frustrating. I first heard the term “great development of natural gas” at a Xiangshan conference in 2000 on the project of transporting gas from the west to the east; it was mentioned by Comrade Xu Dingming, who was then the head of the office in charge of this project and later became the director of the Energy Bureau under the National Development and Reform Commission, in his report to the academicians. Zhu Rongji, who was the Premier of the State Council at the time, attached great importance to the transformation of China’s energy structure. With considerable political determination, he promoted the development of clean energy in China: on one hand, he tightened controls on coal consumption, and on the other hand, despite the country’s limited economic resources, he approved an investment of 120 billion yuan for the construction of the West-East Gas Pipeline project, which enabled a rapid development of China’s natural gas sector. But since then, the statement that China is \"short of oil and gas but rich in coal\" has become a common phrase in the energy industry. It is precisely the companies that have the greatest advantages in terms of resources, talent, and equipment that advocate this view. Their leading experts often take every opportunity to downplay the importance of natural gas, arguing that China has poor resource endowments, unfavorable geological conditions, and outdated technical equipment. In short, their message is that China’s natural gas resources are not good enough! “\"Coal-centered\" became the main theme in the development of China’s energy sector thereafter. From 2002 to 2012, coal consumption increased by 274%. Coal has consistently accounted for around 70% of primary energy sources, while natural gas has never exceeded 5%. On one hand, there’s the demand that \"the son of an iron man must have something to eat!\", while on the other hand, what should be done since China lacks oil and gas? There are only price increases. The price increase further caused natural gas to lose its share in the energy market, creating a vicious cycle. Natural gas is not electricity; there are various energy fuels that can replace natural gas, so there’s absolutely no need to provide universal service. But in some places, they **treat natural gas as a valuable resource to be exploited, using the pretext of \"universal service\" to establish regional monopolies and extract profits at every level, through the creation of provincial and municipal companies that further exploit the situation. Under the joint efforts of large and small monopolistic enterprises, gas prices have been driven to levels that consumers can hardly afford. In the southeastern coastal regions, the price of industrial gas is between 3.5 and 5.4 yuan per cubic meter. Even in Sichuan, a region abundant in natural gas, the gas price in industrial development zones has risen to 3 yuan per cubic meter. Is this fair at all? The development of various renewable energy technologies, energy-saving technologies, and alternative technologies is advancing at a rapid pace; it is almost a green revolution, one that is aimed directly at fossil fuels. Clean natural gas could have been considered an ally in the revolution; yet due to exorbitant prices and strong resistance to reforms, it is now turning into a target of that revolution. Given the current trends, natural gas will likely falter before coal. Shenzhonggang Thermal Power Co., Ltd. in Shengzhou, Shaoxing, Zhejiang is a coal-fired thermal power plant; its coal consumption per unit of electricity generated has remained at 157 grams/kWh for seven consecutive years, which is 100 grams less than that of the most advanced ultra-supercritical coal-fired power plants. The power supply efficiency reaches 78.25%, the boiler thermal efficiency reaches 91%, and the internal efficiency of the steam turbine is as high as 98%. Dust emissions are below 5 mg/m³, sulfur dioxide emissions are less than 20 mg/m³, nitrogen oxide emissions are below 25 mg/m³, and the mercury emission concentration is 0.0068 mg/m³. \"Ultra-low emissions and ultra-low energy consumption\" have been achieved; the energy efficiency and emission advantages of natural gas are unmatched. With international oil prices plummeting, Chinese oil companies could have offset this by vigorously developing natural gas, thereby securing a strong position in the transition toward new energy sources. However, with opportunities being missed time and again, the entire industry can no longer indulge in its past achievements and wait for disaster to strike. Now, some central oil and gas enterprises have reached a point where they must confront the question of whether they can survive. Faced with operational pressures, some experts from the three major oil companies are considering raising natural gas prices; will higher prices enable them to survive? Think about it? !