The impacts of market reform on the market penetration of natural gas-fired electricity and renewable energy in China

Natural gas-fired electricity(NGFE) is expected to play a more important role in the future due to its characteristics of low pollution, high efficiency and flexibility. However, its development in China is impeded by its high regulation price compared with coal power. Market reform is therefore of vital importance to promote the penetration of NGFE. The objective of this study is to analyze the impacts of market reform and the renewable electricity(RE) subsidy policy on the promotion of NGFE and RE. A dynamic game-theoretic model is developed to analyze the interaction among the NG supplier, the power sector and the power grid. Three scenarios are proposed with different policies, including a fixed regulation price of NG and electricity, real-time pricing(RTP) of NG and electricity, and subsidy targeted at RE. The results show that:(1) market reform can sharply decrease the NG price and consequently promote the development of NGFE and RE;(2) subsidy targeted at RE not only promotes the penetration of NGFE and RE, but also increases the utilization ratio of renewables significantly;(3) market reform and the subsidy also enhance consumers' welfare by reducing their power consumption expenditure.

Seizing the Opportunity of Belt and Road Construction to Promote Energy Finance Market Construction

The significant progress achieved in energy cooperation along the "Belt and Road"route has provided a strategic opportunity for promoting the energy finance market.In line with the trend of global energy transformation and international energy pattern adjustment,to promote the formation of a more inclusive regional international energy trade system,accelerating the internationalization of the RMB.Using the launch of Shanghai crude oil futures as an opportunity,we will actively develop the energy finance derivatives market of oil,natural gas and other commodities,thus enhancing China's ability to obtain the value at the high-end segment of the global energy industry chain.

Giving Play to the Leading Role of Energy Cooperation in the Belt and Road Initiative

Over the past two decades, as the main battlefield of China's international energy cooperation, countries along the Belt and Road have had good foundations in the foreign investment. Through China's efforts to build the Belt and Road, energy cooperation has enjoyed first-mover advantages. Looking ahead, the countries along the Belt and Road are predicted to enjoy a promising future in energy cooperation because of their abundant energy resources, their role as complements to China's economic development, and their vast amounts of cooperation potential. At the same time, we are also keenly aware that there are a number of risks caused by geopolitics, policy changes, price fluctuations and legal compliance in energy cooperation among the countries along the Belt and Road. Moreover, it is urgent for Chinese enterprises to enhance their international capabilities. In this context, it is necessary to further maintain and make full use of their first-mover advantages and play a guiding and demonstrating role. Enterprises should actively adapt to new changes, while the government should make progress in policy coordination, facility connectivity, unimpeded trade, financed integration and people-to-people bonds, so as to keep deepening international energy cooperation and to build an energy silk road and a community with a shared future for energy.

Improving Investment and Financing Mechanism, Speeding up the Energy Reform Process-Interpretation to Implementing Opinions on Deepening Reform of Investment and Financing System in Energy Industry

Under the context of economic transformation and upgrading and the continued advancement of supplyside reforms in China, the development of the energy industry is confronted with many problems and challenges, such as insufficient energy investment, a shortage of financing channels,and the low participation of social capital. In order to fully mobilize social capital to invest in energy, enhance energy investment efficiency, expand energy financing channels,and increase the vitality of the energy industry, the state has recently issued the Implementing Opinions on Deepening the Reform of Investment and the Financing System in the Energy Industry( "Opinions"). This paper provides a deep interpretation of this document from the perspectives of the background for the investment and financing system reform in the energy industry,the main content of the reform, the problems and challenges confronting the reform,and the expected effects from the reform, and analyzes the objectives, ideas and problems of the reform, in order to effectively promote the investment and financing system reform in the energy industry.

Development,Challenges and Opportunities of Global Energy Governance

Energy is the lifeblood and driving force of the global economy and even one of the core fields of international competition and contention. With the US Shale Revolution and the increasing share of total global energy consumption accounted for by emerging economies, the pace of the adjustment of global energy supply and demand has accelerated, and the demand for the adjustment and reform of global energy governance to adapt to the new and ever-changing situation is becoming stronger and stronger.

Strategic Choices of Oil Companies for Energy Transformation

A New Round of Industrial Revolution Promotes Energy Transformation Energy serves as a critical physical basis for sustaining human society and the development of civi lization."Energy transformation"refers to fundamental changes in the structure of the energy system.It is not only a process of the energy industry itself but also involves systematic problems concerning human living environments and society.Energy transformation is usually accompanied by an industrial revolution.After James Watt invented the steam engine in 1770,the first Industrial Revolution began.

A scenario analysis of oil and gas consumption in China to 2030 considering the peak CO_2 emission constraint

China is now beginning its 13 th five-year guideline.As the top CO_2 emitter,China has recently submitted the intended nationally determined contributions and made the commitment to start reducing its total carbon emissions in or before 2030.In this study,a bottom-up energy system model is built and applied to analyze the energy(mainly coal,oil,and gas) consumption and carbon emissions in China up to 2030.The results show that,the total energy consumption will reach a peak of 58.1 billion tonnes of standard coal and the CO_2 emissions will get to105.8 billion tonnes.Moreover,in the mitigation scenario,proportion of natural gas consumption will increase by 7%in 2020 and 10%in 2030.respectively.In the transportation sector,gasoline and diesel consumption will gradually decrease,while the consumption of natural gas in2030 will increase by 2.7 times compared to the reference scenario.Moreover,with the promotion of electric cars,the transport electricity consumption will increase 3.1 times in2030 compared to the reference scenario.In order to fulfill the emission peaking target,efforts should be made from both the final demand sectors and oil and gas production industries,to help adjust the energy structure and ensure the oil and gas supply in future.

Study of the impacts of upstream natural gas market reform in China on infrastructure deployment and social welfare using an SVM-based rolling horizon stochastic game analysis

Natural gas is expected to play a much more important role in China in future decades, and market reform is crucial for its rapid market penetration. At present, the main gas fields, pipelines and liquefied natural gas(LNG) infrastructure are mainly monopolized by large state-owned companies, and one of the important market reform policies is to open up LNG import rights to smaller private companies and traders. Therefore, in the present study, a game theoretical model is proposed to analyze and compare the impacts of different market structures on infrastructure deployment and social welfare. Moreover, a support vector machine-based rolling horizon stochastic method is adopted in the model to simulate real LNG price fluctuations. Four market reform scenarios are proposed considering different policies such as business separation, third-party access(TPA) and their combinations. The results indicate that, with third-party access(TPA)entrance into the LNG market, the construction of LNG infrastructure will be promoted and more gas will be provided at lower prices, and thus the total social welfare will be improved greatly.

Risk measurement of international oil and gas projects based on the Value at Risk method

International oil and gas projects feature high capital-intensity, high risks and contract diversity. Therefore, in order to help decision makers make more reasonable decisions under uncertainty, it is necessary to measure the risks of international oil and gas projects. For this purpose, this paper constructs a probabilistic model that is based on the traditional economic evaluation model, and introduces value at risk(VaR) which is a valuable risk measure tool in finance, and applies Va R to measure the risks of royalty contracts, production share contracts and service contracts of an international oil and gas project. Besides, this paper compares the influences of different risk factors on the net present value(NPV) of the project by using the simulation results. The results indicate:(1) risks have great impacts on the project's NPV, therefore, if risks are overlooked, the decision may be wrong.(2) A simulation method is applied to simulate the stochastic distribution of risk factors in the probabilistic model. Therefore, the probability is related to the project's NPV, overcoming the inherent limitation of the traditional economic evaluation method.(3) VaR is a straightforward risk measure tool, and can be applied to evaluate the risks of international oil and gas projects. It is helpful for decision making.

Development Status and Prospects of CCS-EOR Technology in China

China surpassed the United States(US) in 2006 to become the largest greenhouse gas emitter. CCSEOR technology, which meets the dual needs of reducing carbon emissions and enhancing oil recovery, has had much importance attached to it. For the latest decade, the Chinese government has provided support for CCSEOR technology through policy, funding and research projects. Under the vigorous guidance of the government,oil companies represented by China National Petroleum Corporation(CNPC) competed to carry out research,demonstration, popularization and operation in major oil fields centering on the CCS-EOR technology and achieved remarkable results. Its scientific and technological achievements are reflected in various sub-projects under the 863 Program, 973 Program and National Science and Technology Major Project. However, white shifting from trial promotion of the current stage to large-scale commercialization, CCS-EOR techmology will not only face many opportunities but also quite a few challenges.

Market-oriented Energy Revolution in China and Impacts

China has been undergoing a new round of ambitious reform in its energy sectors after president Xi's call for "energy revolution" in June 2014. This top-down strategy paves a way to market-oriented transition for Chinese energy govern system on both industrial level and corporation level. This paper analyzes the new trends of China's energy policy and its impacts on crude oil market as well as on Chinese state-owned petroleum enterprises. This revolution will reshape the management system of Chinese energy industry to cope with rising energy demand, supply restraints, huge environmental costs and backward technologies. With the deepening reform of oil and gas pricing mechanism and the openingup of petroleum industry, Chinese domestic energy market will be upgraded towards a more rationalized and competitive system. Mixed ownerships will be introduced to stimulate the vitality, creativity and brand influence of state-owned petroleum corporations, pushing Chinese national oil majors to collaborate jointly with various foreign oil and gas companies and the emerging domestic private companies with great entrepreneurship.

Comparing and evaluating the nationally determined contributions of the top six emitters under the Paris Agreement goals

Comparing and evaluating the Nationally Determined Contribution(NDC) is an important element in global stocktake in the post-Paris climate negotiations, aimed at closing the emissions gap with the Paris Agreement goals. To date, however, there has still been no explicit guideline or method. By applying emissions allowance allocated by 16 schemes as benchmarks, this paper tries to compare and evaluate the NDCs of the top six emitters, which jointly account for about 70% of the world's CO_2 emissions. Results show that the four developed countries' NDCs lack ambition with respect to most allocations under 2℃ and all under 1.5℃, indicating they need to substantially ratchet up their NDCs and lead elevating mitigation. Evaluating cumulative emissions is more likely to clarify the ambition and fairness of China's NDC. If considering cumulative emissions, China's NDC is aligned with the median of cumulative allowances under 2℃ and within the 1.5℃ range. The Paris Agreement invited the Parties to communicate the mid-century low emissions strategies. This paper also tries to explore the mid-century mitigation in the perspective of allocations, which might provide decision-makers with some useful information when envisaging the post-NDC mitigation.

Background and Effects of Deepening Reform of the Oil and Gas Industry System

Under the background of a fourth wave of industrial revolution and a period of worldwide energy transformation, deepening the reforms in the oil and gas industry system is of great significance. After reviewing the achievements and summarizing the problems of the oil and gas industry in China, this paper lays emphasis on the key aspects of this new round of deepening reforms, and holds the position that this reform, based on the implementation of the national energy strategy, covers the entire oil and gas industry chain by liberalizing market access, reforming market mechanisms, and strengthening management. The reform will bring far-reaching effects upon the entire chain and the participants of the oil and gas industry. It will help to improve the market-oriented allocation of resources, allow enterprises to interact as competitors, and enhance the national oil and gas security.

China's Excess Oil Refining Production Capacity in the Background of the Supply Side Structural Reform

Through analysis of the current situation and newly-increased production capacity-of the oil refining industry of China, this Paper discusses both the continuous expansion trend and the serious excess of production capacity of the oil refining industry of China. Due to the entry of the Chinese economy into the new normal,the accelerated substitution of old energy by new energy and rigid restrictions composed of low carbon and environmental protection requirements, the oil demand of China will continue to increase overall, but the growth will obviously slow down. At the same time, the newly-increased production capacity in Shandong and coastal region will continuously expand, the supply and demand contradiction will intensify, and the structural excess production capacity of the oil refining industry of China will be prominent. It is suggested that the government should attach great importance to the production capacity of the oil refining industry at the macro level, and deeply carry forward the supply side structural reform, and that enterprises should speed up technical innovation,enhance regional and layout optimization, adapt to market changes and adjust product structure, control oil refining but increase chemical engineering, improve product quality and production efficiency, and constantly promote the international competitiveness of the Chinese petrochemical industry.

Investment in deepwater oil and gas exploration projects:a multi-factor analysis with a real options model

Deepwater oil and gas projects embody high risks from geology and engineering aspects, which exert substantial influence on project valuation. But the uncertainties may be converted to additional value to the projects in the case of flexible management. Given the flexibility of project management, this paper extends the classical real options model to a multi-factor model which contains oil price, geology, and engineering uncertainties. It then gives an application example of the new model to evaluate deepwater oil and gas projects with a numerical analytical method. Compared with other methods and models, this multi-factor real options model contains more project information. It reflects the potential value deriving not only from oil price variation but also from geology and engineering uncertainties, which provides more accurate and reliable valuation information for decision makers.

Review on the petroleum market in China:history,challenges and prospects

The petroleum industry plays an essential role in driving China's economic development.In the past few decades,severa reforms in the petroleum industry have been implemented;however,there are still some is sues that have not been resolved Moreover,with the new-normal economy,the transition to green energy and international trade disputes,the petroleum marke is also facing emerging challenges.Therefore,the purpose of the present study is to review the historical development o China's petroleum market,identify the current challenges and propose corresponding countermeasures for future prospects As a conclusion,five main challenges are highlighted totally,namely lack of marketization,excess oil refining capacity,hig external dependency,environment pollution and unstable international trading relationship.To address these challenges it is encouraged to deepen petroleum market reform,accelerate the elimination of inefficient refining capacity,diversify of supply sources,as well as improve domestic petroleum enterprises'ability to resist price risks.

An improved portfolio optimization model for oil and gas investment selection

For oil company decision-makers, the principal concern is how to allocate their limited resources into the most valuable opportunities. Recently a new management philosophy, "Beyond NPV", has received more and more international attention. Economists and senior executives are seeking effective alternative analysis approaches for traditional technical and economic evaluation methods. The improved portfolio optimization model presented in this article represents an applicable technique beyond NPV for doing capital budgeting. In this proposed model, not only can oil company executives achieve trade-offs between returns and risks to their risk tolerance, but they can also employ an "operational premium" to distinguish their ability to improve the performance of the underlying projects. A simulation study based on 19 overseas upstream assets owned by a large oil company in China is conducted to compare optimized utility with non-optimized utility. The simulation results show that the petroleum optimization model including "operational premium" is more in line with the rational investors' demand.

Digitalisation is Reshaping the Oil and Gas Industry

The 'Industry 4.0' era is characterised by a series of new digital technologies, which affect every link of the vertical value chain and are the important driving force of world change. Digitalisation creates new jobs for people and creates more value for businesses.

A biased fairness assessment against developing countries

Since the adoption of the Paris Agreement, almost all countries have submitted their nationally determined contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat. Those submissions form the basis for the implementation of Paris Agreement. However, recent research [1] has shown that existing NDCs will not bring the world to the goal of limiting global temperature increase to below 2 °C above preindustrial levels, much less achieving the goal of limiting warming to 1.5 °C [2,3].