China's government plans to consolidate its energy industry authority into a new ministry, to replace the National Energy Administration, unnamed sources told Reuters. The NEA was set up ten years ago as a unit of the National Development and Reform Commission-the authority in charge of economic planning.
The new ministry will not be part of the NDRC, the sources said, adding that it will handle energy-related issues that are currently the responsibility of several government agencies. The move signals China's acknowledgement of the growing importance of its energy sector, including both fossil fuels and renewables.
According to the sources, the new ministry will manage the liberalization of the country's electricity market and the opening up of its energy infrastructure to private investment, including from foreign companies.
China last year overtook the United States as the biggest oil importer in the world, as it brings more refining capacity online and fills strategic inventories, while domestic oil production continues to decline. Natural gas imports are also breaking records, thanks in no small measure to Beijing's efforts to reduce the country's reliance on coal and reduce pollution.
Domestic production of gas is also growing, as is the adoption of renewable energy. China is the most generous investor in solar and wind power, and it has also set ambitious goals for the adoption of electric vehicles.
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China is building a solid EV battery production capacity, too. To date, there are 140 electric vehicle battery manufacturers in China, and they have led the doubling of the global battery cell production capacity to 125 GWh to date. This, estimates show, could grow further to over 250 GWh by 2020.
This boom in the energy industry certainly merits its own ministry, especially as the government seeks to make policy development and adoption more efficient. But the new ministry is also part of a wider government shakeup that will also involve an overhaul of its financial regulatory system in a bid to improve financial risk control.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More