Low-Carbon Options in China

Jiang Kejun
Energy System Analysis and Market Analysis Division
Energy Research Institute, China
EMF 22, Tsukuba, Dec 12-14, 2006

Emission Scenarios

outlook

options

Energy planningtarget

2010

20302050

Framework of Integrated Policy Model for China (IPAC)
Energy demand and supply
Price/investment
Economic impact
Medium/long-term analysis

IPAC-SGM

Energy demand and supply
Price/investment
IPAC-TIMER
Medium/long-term analysis

IPAC-AIM/MATERIAL

IPAC-Emission

IPAC/Tech(Power/Transport)
IPAC/SE, IPAC/EAlarm

Technology development
Environment impact
Technology policy

IPAC/AIM-LocalRegion analysis
Medium/short analysis
Energy demand and supply
Technology policy

AIM-air

IPAC-AIM/techEnvironment industry
Pollutant emission
Medium/long-term analys

Energy demand and suppl
Full range emission
Price, resource, technolog
Medium-long term analysis
Economic impact
Short term forecast/energy early warning

Medium/short term
analysis
Technologyassessment
Detailed technology
flow

IPAC-health

Climate Model
ERI, ChinaChina: Energy demand and CO2 emission scenarios
Baseline scenario
Policy and technology scenario
Enhanced
Energy Energy
Intensive Annual average energy saving Annual average energy saving rate
SavingProducts
rate 2.7%
3.6%
Building
Annual average energy saving Annual average energy saving rate
rate 1.9%
3.0%
Transport
Annual average energy saving Annual average energy saving rate
rate 1.5%
2.8%
Renewable energy
Biomass
Annual average reduction rate Annual average reduction rate ofof cost by 3.7%
cost by 5.9%
Hydro
65% of technical potential by 80% of technical potential by 2050
2050
Solar/wind
0.7yuan/kWh by 2050
0.5Yuan/kWh by 2050
Carbon Capture and Coal fired power 4% by 2050
15% by 2050
SequestrationplantsIndustry
1% by 2050
5% by 2050
Clean coal technology Power generation
7% by 2050
35% by 2050
Industry
5% by 2050
15% by 2050
HydrogenPower generation
Distributed power generation Distributedpowergeneration
system by 3% in 2050
system by 8% in 2050
Transport
Fuel cell vehicle 5%
Fuel cell vehicle 15%
Transport
VehicleHybrid vehicle diffusion start Hybrid vehicle diffusion start fromfrom 2010, 10% by 2030
2010, 70% by 2040
Policies
Energy tax
No
50yuan/tce in 2010, 200yuan/tce in2050
Subsidy
NoPower from renewable energy
0.3yuan/kWhInvestment
Energy Annual average growth rate 4% Annual average growth rate 6.2%
technology R&D

Pr i mar y energy de mand in China, 205 0

7000
6000
5000
4000
3000
2000
1000
0Oi l

Gas

Nucl ear

Renewabl es

6405
4697

1391

2000

BAU 2050

Tec h and Pol i cy
2050

Final e ne rgy de mand in China,20 50
Coal( Mt c e)( Mt c e)

Coal

6000
5000
4000
3000
2000
1000
0

Oi l

Gas

El ec t r i c i t y5087
3825

1078
2000

BAU 2050

Tec h and Pol i cy2050

Final e ne rgy use by se c tor

6000
5000
400030002000
10000Tr a ns por t

I ndus t r y5087
38251078

2000

BAU 2050

Tec h and Pol i cy2050

Ene rgy Use in Powe r Ge ne ration in China,2050
Coal(Mtce)( Mt c e)

Bui l di ng

Gas

Hydro

Nuclear

Oil

Other renewables

3000
2500
2000
1500
1000
500
02000

BAU 2050

Tech and Policy
2050

Mtoe

Primary Energy Demand in China, Policy Scenario
3500
3000
2500
2000
1500
1000
50002000 2010 2020 2030 2040 2050
YearRenewables
NuclearGas
Oil
CoalEnergy demand will be
reduced 27% (1708Mtce) in2050 by technology andpolicy scenario comparedwith baseline scenario inChina.

(tce/10000 yuan RMB)

GDP e ne rgy inte nsity in China, 2000-2050
2.00
1.50
1.00
0.50
0.00
2000

2010

2020

2030

2040

2050

Energy intensity/GDP(BAU)
Energy intensity/GDP (TAP)

CO2 Emission in China,2050(Mt-C)

CO2 emission(BAU)

CO2 emission(TAP)

3500
3000
2500
2000
1500
1000
500
0
2000

2010

2020

2030

2040

2050

CO2 emission will be reduced
39% (1263Mt-C)in 2050 by
39% technology and policy scenario
compared with baselinescenarioin China

Gt-C

CO2 Emission from Energy Activities in China
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0

LCS Scenario

2000

2010

2020

2030
Year

2040

2050

Identify efficiency promised technologies: fully used by 2020
SectorSteel Industry

Chemical Industry
Paper Making
TextileNon-ferrous metal
Building Materials
Machinery
Residential
ServiceTransport
Common Use
Technology

Technologies
Large size equipment (Coke Oven, Blast furnace, Basic oxygen
furnace ,etc.), Equipment of coke dry quenching, Continuous castingmachine, TRT
Continuous rolling machine, Equipment of coke oven gas, OH gas andBOF gas recovery , DC-electric arc furnace
Large size equipment for Chemical Production, Waste Heat RecoverSystem, Ion membrane technology, Existing Technology Improving
Co-generation System, facilities of residue heat utilization, Blackliquor recovery system, Continuous distillation system
Co-generation System, Shuttleless loom, High Speed Printing andDyeing
Reverberator furnace, Waste Heat Recover System, QSL for lead andzinc production
dry process rotary kiln with pre-calciner, Electric power generator withresidue heat, Colburn process, Hoffman kiln, Tunnel kiln
High speed cutting, Electric-hydraulic hammer, Heat Preservation
FurnaceCooking by gas, Centralized Space Heating System, Energy Saving
Electric Appliance, High Efficient Lighting
Centralized Space Heating System, Centralized Cooling Heating
System, Co-generation System, Energy Saving Electric Appliance,
High Efficient Lighting
Diesel truck, Low Energy Use Car, Electric Car, Natural Gas Car,
Electric Railway Locomotives
High Efficiency Boiler, FCB Technology, High Efficiency ElectricMotor
Speed Adjustable Motor, Centrifugal Electric Fun, Energy Saving
Lighting

Technologies use in IPAC-AIM/Technology modelfor transport analysis
ModeAir, Freight
Large Truck

Small Truck

Railway, Freight

Waterway

Air, Passenger

Technology
Airplane, freight
Conventional large truck (Gasoline)
New large truck (Gasoline)
Conventional large truck (Diesel)
New large truck (Diesel)
Hybrid Truck, large
Conventional small truck
New small truck
Small Truck Diesel
Hybrid Truck, small
Conventional diesel locomotive
New diesel locomotive
Conventional electric locomotive
New electric locomotive
Steam locomotive
Conventional coastal ship
New coastal ship
Conventional ocean ship
New ocean ship
Conventional river ship
New river ship
Transportation Others
Airplane, Passenger

ModeBus

MRTCarRailway, Passenger

Waterway, passenger

TechnologyGasoline bus
Improved gasoline bus
Diesel busImproved diesel bus
Hybrid Bus
CNG.Bus
LPG.Bus
MRTElectric car
SANATA-Normal Car, Gaso
Mini-Car
High Fuel Economy Car
Hybrid Car
Fuel Cell car
Diesel Car
New Diesel Car
Conventional diesel locomo
New diesel locomotive
Conventional electric locom
New electric locomotive
Steam locomotive
Conventional river ship
New river ship

Policy Options for alternative transport scenario
ModeAir
Railway
Waterway
Freight Large Truck
Freight Small Truck
BusCarBiomass Fule
Public Transport
BicycleFuel tax

Policy Options
New Boing Airplane, AirBus
380
Efficiency improvement 8% forelectric and diesel locomotive
15% efficiency improvement
by using larger tank andengine
Advanced diesel truck, morethen 50%
Hybrid Truck, 20%
Hybrid Truck, 50%
New Diesel Truck, 40%
Hybrid Bus, 70%
Efficient diesel car, 30%
Hybrid car 50%
Ethonal 30% of gasoline use
BioDiesel 15%
Take 15% more from car use
10% more
Start from 2010, similar rateby 2020 with that in Japan andEurope

Fuel Oil-Waterway

500
400
300
200
10002000

Diesel-Waterway
Koresene
Electricity
Diesel-Railway
Bio-Diesel
Ethrnal
Diesel-Road

2010

20202030

GasolineYear

Transport Energy Deamnd, Policy
ScenarioMtoe

Mtoe

Transport Energy Deamnd, Baseline
Scenario

Fuel Oil-Waterway

500400300200
10002000

Diesel-Waterway
Koresene
Electricity
Diesel-Railway
Bio-Diesel
Ethrnal
Diesel-Road

2010

2020

Year2030

GasolineTechnology Used in Power Generation
Biogas Power Generation
Biogas power generation from husbandury
Biomass Power Generation
Offshore wind turbine
Nuclear Power Plant
Biomass Power Plant
Super Critical Unit
Critical Unit
Coal Cogeneration
N.Gas Co-generation
Coal Power Plant
Gas Power Plant
IGCC
NGCC
Oil Power Plant
Hydro Power Plant
Wind PowerTechnology options for alternative scenario

Bi ogas Power Gener at i on
10GW by 2020
Bi ogas power gener at i on f r om hu 1GW by 2020
Bi omass Power Gener at i on2GW by 2020
Of f shor e wi nd t ur bi ne
10GW by 2030
Nucl ear Power Pl ant
40GW by 2020
I GCC
100GW by 2030
NGCC
100GW by 2030
I nl and Wi nd Power
25GW by 2020

Power Generation Output in China, Baseline Scenario
8000
7000

Bio
wind
Nuclear
Hydro

5000
4000
3000

N.Gas
Oil
Coal

2000
1000
02000

2010

2020

2030

Year

Power Generation Output in China, Policy Scenario
8000
7000

Bio
wind

6000
TWhTWh6000

5000

Nuclear
Hydro

4000
3000
2000

N.Gas
Oil

1000

Coal02000

2010

2020
Year2030

14001200100080060040020002000

N.Gas
OilCoal2010

2020

2030

Year

Fossil Fuel Use in Power Sector

MtceMtce

Fossil Fuel Use in Power Sector, baseline scenario

1400
1200
100080060040020002000

N.Gas
OilCoal2010

2020
Year2030

Clean Coal Technology: Global Progressa In 2000, Version 21 program in United Statesa Early Entrance Co-production Plant(EECP), 2007a Pilot phase plants on LPMEOH and LPDME, which are
the technologies to produce methanol, Dimethyl Ether,and co-generation. These plants were constructed in 1997a Coal integrated generation system by Some famousinternational companies including BP, GE, Air Products
and Chemicals, Shella Investment for clean coal technology R&D is decreasingin Europe due to less use of coal, even in United States

Clean Coal Technology: Progress in Chinaa Coal washing: in 2003, coal washing rate is only 24%,
remain very low washing ratea Coal-Water mixture: There are huge development of coalwater mixture in China. In 1999 the production capacity
was less than 900 thousand ton. The production capacity
increased to be nearly 7 million ton in 2003
a Industry briquette: because of high price, progress ofindustry briquette is slow. Recently air pollution issues
raised the possibility to use more industry briquettea Ultra-super critical unit: 1GW unit is under constructionin Yuantian Power Plant, which started construction in2004 and will be in operation in 2007. This is one
component of National 863 ProjectClean Coal Technology: Progress in China(conti.)

a IGCC: Project feasibility study was done for Beijing
IGCC project and Yantai IGCC project during 1995 to2000. And now four IGCC project is planned and will
start construction soon.
a Underground coal gasification: Shan Dong Lineng Groupmade plan for a pilot phase project on underground coalgasification. This project includes four gasification
furnace with total capacity 3million m3 per day
a Poly-Generation: in 973 Program, a preliminary analysis
was conducted. 4 to 5 projects are under construction andwill start production in 2007 to 2009

Clean Coal Technology: Progress in China(conti.)a Coal Liquefaction: In 2002, Shenhua Direct Coal Liquefaction
project is under construction. This project is expected to start
production in 2007. All together there are 29 projects under planningwith total capacity 40 to 50 million ton oil.
a Desulphurization: with recent rapid increase of coal fired powerplants, newly construct coal fired power plant with sulphur content
higher than 1% equipped with desulphurization technology. And due
to air pollution in cities, some existing coal fired power plants nearcities also started to equip with desulphurization equipmentsa Low Nox Combustion technology: still in research process. One pilot
project is under construction. As research project, more then ten units
equipped with low NOx combustor

Profit to develop clean coal technologies• Increase energy security: self-supply of energy 93% in2005. In 2030, self supply will be 76% in 2030 in baseline
scenario, 77% in policy scenario, with smaller import.
• Fundamental industry in China with large employment:
7.6 million employees in 2004, 5.8million in 2030.
Important thing is this is good for low income people tofine opportunity• Extend economy activities. Taking lead for clean coaltechnology in the world will bring economy benefit.
Three power equipment companies in China is becoming
among top manufactures in the world in 2005(largest
power capacity suppliers for coal fired power plants), andstarted to export advanced coal fired power plants.

Profit to develop clean coal technologies(Conti.)• Very good environment effects. SO2, NOx, PM emission,water pollution will be significantly reduced by using
clean coal technologies, also very important for GHG
emission reduction. Clean coal technology development
will be crucial for government environment target in 11th
Five Year Plan
• Contribution to global climate change collaboration. AsiaPacific Partnership on Clean Development and Climate,
China-EU Partnership on Climate Change havecomponent of clean coal technology collaboration

Technology is moving fast: coal fired power plants•••

Super-Critical Generator is major power
generation technology in China for new power
plantsThere are more than 10 ultra-super critical units
under construction
Four IGCC under planning and start construction
next year

Energy Intensity in 2010, 9.5% growth policy scenario
0.014
0.012

21% decrease

0.01
0.008
0.006

0.01230.0099

0.004
0.002
02005

2010
Year

Government target: 20% energy intensity decrease in 2010
compared with 2005

Primary Energy Demand, 9.5% Grwoth Policy Scenario
3500
BioDiesel
Ethonal

3000

Mtce

2500

BiomassWind

2000
1500

NuclearHydro

1000
500

N.Gas
Oil

0
2005

2010
Year

Coal

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Mt ce
Ener gy Savi ng by Sect or , 9. 5% Pol i cy Scenar i oSect orConclusion• There are already a large amount of new technologies
available to be implemented in China. Policies such as fiscalpolices including energy tax should be adopted at early time
• New advanced technologies is crucial for future low carbon
society, such as advanced power generation system,transport system, higher efficiency electric appliance,building• More investment is urgently needed now for technology
R&D. International collaboration is expected to work on
this• Investment on new technology will benefit on economy
development• Chinese government is making full effort to reduce energy
demand increase in China as national strategy. If thestrategy could be implemented, there will be strong support
for low carbon society in 2050

Policies recommended to government beside policy planning• Energy tax, to be implemented at early time, such as 2010
• Reduce space heating payment for energy efficient building• Pay-back price: grid purchase electricity from renewable in
the price grid sale to end-users• Much more emphasizing on new technology development