China Plans to Use Renewable Energy to Help Boost Oil & Gas Production

China plans to use renewable energy sources such as wind and solar to provide onsite power for enhanced oil and gas recovery techniques, according to the National Energy Administration.

Gas output could be increased by 3 billion cubic meters (bcm) through pressure-boosted mining techniques, the NEA said in an action plan for 2023-2025 issued late on Wednesday. 

Crude oil production could be lifted by more than 2 million tonnes through renewable-powered carbon dioxide flooding and thermal recovery techniques, it added.

In addition to enhancing output at existing sites, the NEA proposed increased exploration of both onshore and offshore oil and gas that would also draw on renewable power sources.

The development of renewable-supported oil and gas facilities has particular potential in northern and western parts of the country such as Xinjiang, Gansu and Heilongjiang, it said. 

The blueprint for an "integrated development" of renewable and conventional energy resources comes as Beijing increasingly stresses the country's need for energy security, including a new emphasis on a continuing role for coal.

Despite a massive rollout of renewable power sources - renewables accounted for 76.2% of newly installed energy capacity last year - traditional fuel sources form the backbone of the country's energy supply. 

Coal power accounted for 56.2% of China's energy consumption last year, while oil provided 17.9% and gas 8.5%, according to data from the National Bureau of Statistics. 

In 2022, droughts in southwestern China slashed output from hydro sources, leading to painful power outages.

That has spurred China to form plans for some 100 new coal-fired power plants to back up wind and solar capacity, sparking warnings that the world's second-biggest economy is likely to end up lumbered with even more loss-making power assets. 

The NEA also highlighted the importance of demand-side reforms, such as reducing power usage at peak times, as well as increasing energy storage and 'smart grid' systems. 

 (Reporting by Andrew Hayley and Beijing Newsroom; Editing by Edwina Gibbs)

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