Special Report: NPC, CPPCC Annual Sessions 2008

Backgrounder: Electric power in China

State Councilor Hua Jianmin, who is also Secretary General of the State Council, delivers the explanation of the plan for institutional restructuring of the State Council during the fourth plenary meeting of the First Session of the 11th National People's Congress (NPC) at the Great Hall of the People in Beijing, capital of China, March 11, 2008. (Xinhua Photo) Photo Gallery>>>

    BEIJING, March 11 (Xinhua) -- China on Tuesday announced an integration of its energy management supervision and policies, functions that are currently dispersed among many government agencies, through the establishment of a high-level consultation and coordination commission.

    The commission, called the national energy commission, will be responsible for studying and drafting an energy development strategy and considering energy security and development issues, Hua Jianmin, State Council secretary-general, said at the annual session of China's top legislature.

    Accordingly, a national energy bureau under the National Development and Reform Commission (NDRC) will be established as a standing body to undertake the new energy commission's day-to-day work.

    Energy-related institutions and functions belonging to the NDRC, the entire National Energy Leading Group (NELG), and the nuclear power management of the Commission of Science, Technology and Industry for National Defense would be integrated into the energy bureau, Hua said.

    The bureau would draw up and implement energy industry programs, policies and standards, promote new and alternative forms of energy and encourage conservation.

    The bureau would be supervised by the NDRC to ensure the close coordination of energy management with national economic and social development programs and macro-control policies, Hua said.

    The NELG and its executive organs would be disbanded, he added.

    The restructuring plan was based on China's rapid economic expansion, growing energy demand, pressing desire for safe energy supply and better energy management, said Feng Fei, director of the Industry Department of the Development Research Center of the State Council.

    Energy strategy shall be put in a more important position, but the current energy management pattern cannot keep up with the changing situation, he added.

    The integration of the energy sector has been mulled by the central government in recent years. In 2007, the country's imports of crude oil hit 159.28 million tons, rising 14.7 year-on-year and contributing 46 percent to the total crude consumption.

    The combination of a sizzling economy, soaring investment growth in the heavy industrial sector and cars crowding urban streets have driven up China's demand for oil.

    Meanwhile, government-controlled oil prices in the domestic market, which doesn't cover the international crude cost, were blamed for a shortfall of oil supply. Some refineries stop processing crude to avoid losses while some producers and dealers hoard oil in anticipation of possible price rises.

    Ye Rongsi, an expert with the NELG who has been engaged in the drafting of a new energy law, said how to promote the reform of the energy pricing mechanism was one of the problems challenging the energy sector.

    Other problems included the introduction of various property ownerships, an incomplete legal system, an unreasonable energy structure far from satisfying both sound and fast economic development, and heavy tasks in cutting emissions and coping with climate change, he said.

    "These all need an integrated and authoritative organization to unify the management and promote reforms."

    Since the energy ministry was dismissed in 1993, China has seen an absence of an authoritative department responsible for enacting uniform energy policies and programs. In 2005, the NELG was set up to help integrate the planning of the energy sector.