Low-Carbon Options in China

Jiang Kejun, Hu Xiulian
Energy System Analysis and Market Analysis Division
Energy Research Institute, China
12th AIM International Workshop, Feb.19-21, 2007

Objectives

a Find Sustainable development pathway on energy andenvironment in China
a Development a common future with other team members
from Japan, India, and UK.
a Find a way to join international effort on GHG Emission
reduction

China: Energy demand and CO2 emission scenarios
Baseline scenario
Policy and technology scenario
EnhancedEnergy 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
Sequestration
plantsIndustry
1% by 20505% 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%
TransportVehicle
Hybrid 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
0

Oi lGasNucl 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
4000
3000
2000
1000
0

Tr a ns por tI ndus t r y5087
3825

1078

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

GasHydro

Nuclear

Oil

Other renewables

3000
2500
2000
1500
1000
500
02000

BAU 2050

Tech and Policy
2050

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
02000

2010

2020

2030

2040

2050

CO2 emission will be reduced
39% (1263Mt-C)in 2050 by
39% technology and policy scenario
compared with baseline
scenarioin ChinaIdentify efficiency promised technologies: fully used by 2020
SectorSteel Industry

Chemical Industry
Paper Making
TextileNon-ferrous metal
Building Materials
Machinery
Residential
ServiceTransport
Common UseTechnologyTechnologies
Large size equipment (Coke Oven, Blast furnace, Basic oxygenfurnace ,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 Recover
System, 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
Furnace
Cooking 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 ElectricMotorSpeed 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

ModeBusMRTCar

Railway, Passenger

Waterway, passenger

Technology
Gasoline bus
Improved gasoline bus
Diesel bus
Improved diesel bus
Hybrid Bus
CNG.Bus
LPG.Bus
MRT
Electric 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
RailwayWaterway
Freight Large Truck
Freight Small Truck
BusCarBiomass Fule
Public TransportBicycle
Fuel 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

50040030020010002000

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

2010

2020

2030

GasolineYear

Transport Energy Deamnd, Policy
Scenario

Mtoe

Mtoe

Transport Energy Deamnd, Baseline
Scenario

Fuel Oil-Waterway

500
40030020010002000

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 CogenerationN.Gas Co-generation
Coal Power Plant
Gas Power Plant
IGCCNGCC
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 on
2GW 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

BiowindNuclear
Hydro

5000
40003000N.Gas
Oil
Coal

2000
100002000

2010

2020

2030

YearPower Generation Output in China, Policy Scenario
8000
7000

Biowind6000
TWhTWh6000

5000

Nuclear
Hydro

4000
3000
2000

N.Gas
Oil

1000

Coal02000

2010

2020
Year2030

1400
1200
1000
800
600
40020002000

N.Gas
Oil
Coal

2010

2020

2030

Year

Fossil Fuel Use in Power Sector

Mtce

Mtce

Fossil Fuel Use in Power Sector, baseline scenario

1400
1200
1000
800
600
400
20002000

N.Gas
Oil
Coal

2010

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 Productsand 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 Yantai IGCC project is underconstruction. Yanzhou Coal Mine Group also made planfor IGCC, together with methanol generation system.
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, and several companies, research institutes,
universities are planning to construct gasification power
generation, fuel and feedstock poly-generation system

Clean Coal Technology: Progress in China(conti.)a Direct Coal Liquefaction: In 2002, Shenhua Direct Coal Liquefaction
project was approved by State Council and started construction. This
project is expected to start production in 2007. Fundamental researchfor direct coal liquefaction is taken by research institutes such as
China Coal Research Academy
a Desulphurization: with recent rapid increase of coal fired power
plants, newly construct coal fired power plant with sulphur content
higher than 1% equipped with desulphurization technology. And dueto 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% in
2005. 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, 7.8million 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

We can do more, with new technologies

Conclusion• There are already a large amount of new technologies
available to be implemented in China. Policies such as fiscal
polices 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

Next Step

• Further discussion with other team members, by sharing
options in model, and policy options• Energy intensive products demand model/Material flow
model development• International regime discussion