On November 8, China issued its first Energy Law, which aims to support the development and utilisation of renewable energy and increase the proportion of non-fossil energy consumption.
The law, which will come into effect in January 2025, stipulates that the state will formulate long-term development goals, monitor the yearly development and utilisation of non-fossil energy, and institute a minimum proportion of renewables in energy consumption. Guo Haitao, director of the Institute of Energy Economics and Finance at the China University of Petroleum in Beijing, told People’s Daily: “The Energy Law clearly stipulates that renewable energy takes precedence over traditional fossil energy, which will effectively promote its development”.
However, the law also states that there will be “rational development and clean and efficient use” of fossil fuels. Energy Magazine reports that the peak-shaving and supporting role of coal-fired power and coal in the energy system have been written into the law.
Notably, the Energy Law also formally incorporates hydrogen, the management of which was previously under the hazardous chemicals designation, into the energy management system, on par with other energy sources, according to the 21st Century Business Herald.
Current new energy development faces the problem of absorption. The Energy Law seeks to ameliorate the problem by promoting grid interconnectivity and pushing for a market-based system. It will also encourage the development of distributed energy, in which generators are placed closer to areas where energy will be used, as well as local development and utilisation, Yang Lei, deputy director of the Institute of Energy Research at Peking University, told the China News Service.
Separate laws already exist in the energy field, such as the Electricity Law, the Energy Conservation Law and the Renewable Energy Law. But Chen Xinghua, an associate professor at the North China University of Technology, noted that as a comprehensive legislation, the Energy Law pays special attention to the connection between different energy types, such as through energy substitution, that is not taken into account by those separate laws.
Read Dialogue Earth’s previous analysis on the impact of China’s then-draft energy law on its overseas investment.