At present, the global energy system is facing challenges in fairness, supply security, and green development, with severe uncertainty. The structural transformation of the global energy system urgently requires strong global governance. The commodity attributes of energy require the establishment of a sound market mechanism to promote energy trade between countries. The comprehensive improvement of the energy system, governance system, and market mechanism can promote the transformation of the world energy system towards a more low-carbon and rational modernization of resource utilization.

Academician Ni Weidou's research team of the Chinese Academy of Engineering proposed a "SEGO" system analysis method for energy strategy analysis in the first issue of the Chinese Journal of Engineering Science in 2021. Starting from the four elements and their relationships of energy challenges, energy systems, energy governance, and energy markets, they systematically analyzed and summarized the global energy transformation and China's energy revolution strategy. The article points out that the world is facing multiple energy challenges such as energy equity, energy security, and energy greening, and lacks strong global energy governance, resulting in a relatively slow overall transformation of the global energy system. China is expected to play a more proactive role in promoting the transformation of the global energy system. The sustainable development of energy in our country is gradually advancing, and we are facing challenges such as energy system integration during the energy revolution. However, our firm political will has effectively promoted energy transformation, achieving less energy consumption and emissions. The article suggests that China's energy revolution should be carried out from a panoramic perspective of the economy, society, and ecological environment. The overall system optimization and fine control of energy development should be done well, especially the deep coordination of co construction, sharing, and coordination between different types of energy networks, to accelerate the disruptive innovation of new energy technologies and industries.

1、 Preface

Promoting the revolution of energy production and consumption, and building a clean, low-carbon, safe and efficient energy system are important strategies for China's energy development. In 2016, the National Development and Reform Commission and the National Energy Administration issued the "Energy Production and Consumption Revolution Strategy (2016-2030)", which proposed the strategic task of "four revolutions and one cooperation". From a systemic perspective, the "four revolutions and one cooperation" are not separate, but rather an organic system with strong internal connections. With the continuous deepening of China's globalization process, it is also necessary to dynamically examine China's energy production and consumption revolution strategy from the perspective of global energy development, promote energy transformation, promote economic and social development, and protect the ecological environment.

To conduct a systematic analysis of energy strategy, this article establishes the SEGO (sustainable development, energy system, governance of society, operation of market) method. Combining factors such as sustainable development, energy system, social governance, and market operation, it explores the global energy transformation and China's energy revolution, and puts forward suggestions to promote the process of China's energy revolution.

2、 Research methods

Energy strategy can be understood as a comprehensive plan for the development of energy systems proposed by a specific social organization from the perspective of overall social governance to address the challenges of sustainable energy development. This plan mainly serves the operation of the energy market, ultimately affecting the physical composition and technical performance of the energy system to achieve specific social governance and sustainable development goals.

This article uses the SEGO method to systematically analyze energy strategies (see Figure 1). This method consists of four basic elements:

① The energy challenges related to sustainable development, abbreviated as energy challenges;

② The physical system of energy supply, conversion, consumption, and infrastructure, abbreviated as the energy system;

③ Energy related social governance, abbreviated as energy governance;

④ Energy related market operation, abbreviated as energy market;

（1） Energy challenges

Energy is a necessary supporting condition for sustainable development. The energy challenge of sustainable development refers to the questioning of certain issues and phenomena raised by specific social organizations due to constraints in energy, resources, and environment, in order to meet the growing needs of people. The International Institute for Applied Systems Analysis (IIASA) categorizes global energy challenges into three categories: energy equity, energy supply security, and energy greening.

In response to the challenges in the energy sector, different countries and regions need to adjust according to their actual situations. For developing countries, economic development remains the primary task of national development. The goal of sustainable energy development in China is to meet the power needs of economic development, ensure energy security, protect public health and ecological environment, and eliminate energy poverty. Therefore, when analyzing the energy challenges of specific countries or regions, the first step is to clarify the needs of social organizations; Secondly, it is necessary to clarify the priority of different energy challenges to ensure a more reasonable response to energy challenges; Once again, describe the social conditions, resource environment, and other boundary conditions of a specific region; Finally, identify the energy demand in the current environment, clarify the sustainable development challenges faced in meeting energy demand, in order to better respond.

（2） Energy system

The energy system is the carrier for energy conversion and utilization, and the process of transforming energy resources into specific forms of energy services (useful energy) required for social production and life. The energy utilization chain includes five processes: source, transportation, conversion, distribution, and terminal utilization. There are differences in energy systems among countries around the world, and in the face of sustainable development challenges, optimizing energy systems is a necessary measure. It is urgent to conduct in-depth analysis of energy systems.

Energy system analysis is a qualitative and quantitative analysis of each link in the energy system from production to terminal utilization, with the goal of achieving overall system optimization, in order to provide reference for decision-makers. When conducting energy system analysis, the first step is to clarify the composition and structure of the energy system in the research area, determine the system boundaries, related links, departments, and the principles of physical system operation, and use models and methods to describe an overview of the energy system in the area. On this basis, we will conduct research, collect relevant data to fill the model, and analyze the patterns and impacts of system changes. Finally, based on the energy challenges faced, identify the root causes of the problems in the energy physics system, and propose improvement measures and feasible solutions.

（3） Energy governance

The prominent issues of public product attributes and externalities in the energy sector urgently need to be addressed through governance. According to the United Nations definition, governance refers to the exercise of economic, political, and administrative power to manage the affairs of a country and region at all levels. Energy governance refers to the social governance that is carried out regarding the provision of energy services, typically including the actors, institutions, and procedures that make decisions, involving energy related actors such as government, non-governmental organizations, companies, citizens, public-private partnerships, and agenda setting, negotiation, implementation, monitoring, and enforcement procedures related to energy rules.

At present, the goal of supporting energy governance at both national and global levels is to address the challenges of sustainable energy development, but the focus varies. National energy governance is aimed at addressing the challenges of energy supply security, while global energy governance is primarily aimed at addressing the challenges of energy equity and energy greening.

（4） Energy market

The energy market refers to the market where commodities are exchanged for energy commodities. The operation of the energy market mainly involves the daily behavior and corresponding mechanisms of people or organizations involved in energy development and utilization. The research and analysis of the operation of the energy market is an important component of the energy strategy system analysis.

The process of analyzing the operation of the energy market is as follows: first, identify the stakeholders involved in the energy market in a certain region, and determine the people or organizations that affect the composition and operation of the energy market; Secondly, clarify the roles and interests of various stakeholders in the energy market of the region, determine the current mechanisms and models among market stakeholders, analyze the characteristics of existing mechanisms, and explore whether there are problems that cannot meet social governance requirements due to conflicts of interest; Finally, in response to potential conflicts between the current state of market operation and governance objectives, directions for energy market coordination and optimization are proposed.

（5） The overall consistency of the SEGO method

The four elements of the SEGO method have overall unity, with energy challenges as the cause, energy systems as the main carrier, energy governance as the means, and energy markets as the transmission mechanism. Together, they constitute a complex dynamic mechanism of integration and interconnection between energy, ecology, environment, economy, society, etc., which has become an indispensable component of energy system strategic analysis.

The connection between the four elements is that in order to effectively address energy challenges, it is first necessary to understand the basic composition, development trends, and future technological options of the energy system; To achieve the transformation and adjustment of the energy system, an integrated and coordinated mechanism at the energy governance level is needed; Due to the differences in energy governance models and stakeholders among different countries and regions, energy as a commodity must be transmitted from producers to consumers through the market to achieve terminal utilization of energy. Therefore, it is necessary to understand the operating mechanism of the energy market, explore conflicts of interest, and enable the transformation of the energy system to better meet the energy consumption needs of the whole society under the intervention and guidance of energy governance.

Specifically, energy challenges should be based on the difficulties that the world or country has encountered or may encounter in energy development, and the energy development difficulties faced by the world or country should be explained; The energy system should revolve around the energy production and consumption structure of the target area; Energy governance should focus on the energy governance structure of a certain region, clarify the power structure and governance model, and propose reform suggestions; The energy market aims to clarify the main stakeholders of a regional energy market, clarify the relationships and conflicts between energy market entities, and propose suggestions for the development of market systems and mechanisms.