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Experts said Wednesday that China should rationalize its natural gas consumption as the price of natural gas in the international market has been relatively high.

 

Zhou Xiaoqian, chairman of the Cogeneration Study Committee of Chinese Society for Electrical Engineering, said at an ongoing forum on decentralized energy that the potential supply risk of natural gas means that large gas-fired power generation projects are not the right choice for China.

 

A decentralized energy system, which is much cheaper and more efficient, is the proper way for China to use natural gas, said Zhou.

 

A decentralized energy system is relatively small, distributed where consumers are, and combines heating, cooling and power supply.

 

Han Xiaoping, an expert with China5e.com, a professional energy website, said that reducing the cost of electricity transmission and increasing the efficiency of energy use, a decentralized energy system, generating electricity by firing natural gas and supplying heat produced in electricity generation, will all help to sustain China's natural gas market.

 

China, with a relatively lower domestic price of natural gas, finds itself in a dilemma in the international market, especially when importing natural gas, as the price has been rising along with oil prices

 

The lower price has encouraged the launching of many large gas-fired power generation projects.

 

Last winter saw an interruption in production in some large gas-fired power plants along China's major gas pipeline transmitting natural gas from West China to the East.

 

According to Han, two reasons should be blamed for the interruption. One is supply shortage stimulated by sharp rising demand under lower price.

 

The other one is that compared with the cost of coal-fired power generation, the cost of large gas-fired power generation projects are still relatively high, which caused the gas supply in some plants to be cut off, he said.

 

Statistics released by the China Electricity Council said that the supply shortage of natural gas has affected the operation of four million kilowatts gas-fired units in East China and the figure is expected to rise to six million kilowatts this year.

 

If the domestic price of natural gas was raised to the same level as its international counterparts, an inevitable trend for China's natural gas market, large gas-fired markets will loose all their competitiveness, said Han.

 

So only by improving the price sustainability of China's natural gas market can China change its great demand for gas to a position of superiority in the international market, he said.

 

In this sense, enhancing the efficiency of natural gas use, such as developing decentralized energy systems, is a good choice for China, said Han.

 

(Xinhua News Agency May 18, 2006)