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Electricity to play bigger role in China's future energy consumption

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BEIJING, Oct. 25 (Xinhua) -- China will rely more on electricity as total energy consumption eases, but reforming the power sector is essential to ensure supply, according to experts.

Wang Min, vice president of the State Grid Corp. of China (SGCC), the country's leading power distributor, said with the rapid development in clean energy generation, electricity will account for a larger part in China's terminal energy consumption in the coming years.

A report from the energy research institute of the SGCC estimats that more coal and natural gas will be used to generate electricity instead of being burned directly and electric cars will become widely accepted in the future.

Electricity will account for 27.5 percent of terminal energy consumption in 2020 from 20.9 percent in 2010, according to the report.

The report forecasts that non-fossil energy will account for 15 percent of the country's primary energy by 2020, compared with 8.3 percent in 2010. It also predicts that 84 percent of non-fossil energy will at that time be used to generate electricity.

Wu Yin, vice head of the National Energy Administration (NEA), indicated that electricity can be used more efficiently than other types of energy, which will help reduce the growth of China's energy consumption.

He said that each percentage point increase of electricity used in terminal energy consumption will result in a drop of 6.2 percentage points in China's energy consumption per GDP, citing recent research results.

In the national development plan for 2011-2015, China aims to reduce energy consumption per GDP unit by 16 percent as of 2015 from 2010.

Shi Lishan, deputy director of New and Renewable Energy Department of the NEA, said energy consumption growth will slow -- predicting that annual energy consumption will stand at 6 billion tonnes of coal equivalent by 2040 from 3.25 billion tonnes last year, with total installed power capacity jumping to 3 billion kilowatts from the current 1 billion kilowatts.

At the same time, renewable energy will replace coal-generated electricity to become the major source of power supply, including nuclear power, hydropower, wind power and solar power.

Experts said development in electricity generation will help boost large-scale energy transmission across regions, as it is easy to transit compared to transporting petroleum or coal.

Zhang Yunzhou, dean of SGCC's energy research institute, said there will still be a great demand in the country's southern and eastern regions for energy from north and west China in the coming years.

But since the northern and western regions are resources-rich, it is more likely that fossil fuels will be used to generate electricity before going to other regions.

However, experts warn that in the face of a rise in demand, China's power industry needs a complete reform, as the country's power plants have not been performing well with frequent power shortages hitting many regions.

Lu Qiang, a researcher with the China Academy of Sciences, attributed the shortages in part to government controlled electricity prices verses market-orientated coal prices.

In China, coal prices are allowed to fluctuate freely, while electricity prices are strictly set by the government.

If the systematic conflict is not solved, nationwide power shortages will emerge every two years or so, he said.

China's State Electricity Regulatory Commission warned last Thursday that power shortages will hit China during the coming winter and spring, as rising coal prices will further increase supply pressures, and the maximum power shortage could reach 26 million kilowatts this winter.

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