Chen Wenying

Future implications of China's energy-technology choices

This paper summarizes an assessment of future energy-technology strategies for China that explored the prospects for China to continue its social and economic development while ensuring national energy-supply security and promoting environmental sustainability over the next 50 years. The Markal energy-system modeling tool was used to build a model of Chinas energy system representing all sectors of the economy and including both energy conversion and end-use technologies. Different scenarios for the evolution of the energy system from 1995 to 2050 were explored, enabling insights to be gained into different energy development choices. The analysis indicates a business-as-usual strategy that relies on coal combustion technologies would not be able to meet all environmental and energy security goals. However, an advanced technology strategy emphasizing (1) coal gasification technologies co-producing electricity and clean liquid and gaseous energy carriers (polygeneration), with below-ground storage of some captured CO2; (2) expanded use of renewable energy sources (especially wind and modern biomass); and (3) end-use efficiency would enable China to continue social and economic development through at least the next 50 years while ensuring security of energy supply and improved local and global environmental quality. Surprisingly, even when significant limitations on carbon emissions were stipulated, the model calculated that an advanced energy technology strategy using our technology-cost assumptions would not incur a higher cumulative (1995–2050) total discounted energy system cost than the business-as-usual strategy. To realize such an advanced technology strategy, China will need policies and programs that encourage the development, demonstration and commercialization of advanced clean energy conversion technologies and that support aggressive end-use energy efficiency improvements.

Modeling China's energy future

The analysis in this paper builds on a previous China MARKAL modeling effort to further explore alternative energy-technology strategies and assess the extent to which they could enable China to meet its social and economic development goals while ensuring national energy-supply security and promoting environmental protection and sustainable development. The present analysis is intended to help sharpen the focus on key strategic issues, policies, and programs for promoting an advanced energy-technology strategy in general and coal polygeneration technology in particular. The detailed assessment of coal polygeneration technology is warranted because of its potentially central role in providing clean synthetic transportation fuels as well as electricity. The paper explores the following set of specific issues: (1) the costs and benefits of advanced energy-technology strategies compared to strategies based on coal combustion for electricity generation and direct coal liquefaction to produce liquid fuels, (2) the impact that delays in the introduction of polygeneration technologies might have on overall energy system costs and on meeting environmental and energy security goals, (3) the impact of future, crisis-induced oil price shocks, (4) the impact of insufficiently aggressive end-use energy efficiency efforts, and (5) the relative costs of achieving reductions in air pollution and CO2 emissions with different energy-technology strategies. The analysis indicates that an energy development strategy based on advanced technologies, including efficient end-use technologies, renewables, and coal gasification-based energy supply technologies, can enable China to meet economic development, clean air, energy security and greenhouse gas mitigation targets consistent with sustainable development. A “business-as-usual” strategy, even including direct coal liquids technology, cannot meet target caps on oil and gas imports. In addition, the analysis indicates that over the 55-year modeling period (1995 to 2050) an advanced technology strategy would involve only a small (1 %) increase in total energy-system cost compared with a “business-as-usual” strategy. The advanced technology strategy requires significantly higher capital investments in energy technologies, but these result in significantly lower fuel costs, especially from reduced fuel imports.

Future implications of China's energy-technology choices: summary of a report to the Working Group on Energy Strategies and Technologies

This paper summarizes results of an assessment of future energy-technology strategies for China highlighting implications of different advanced energy-technology strategies that could allow China to continue its social and economic development while ensuring national energy-supply security and promoting environmental sustainability. The MARKAL energy-system modeling tool was used to build a model of Chinas energy system. Different scenarios for the evolution of energy supply and demand from 1995 to 2050 were explored, enabling insights to be gained into different energy development choices that China might make. The overall conclusion from the analysis is that there are plausible energy-technology strategies that would enable China to continue social and economic development through at least the next 50 years while ensuring security of energy supply and improved local and global environmental quality. Surprisingly, except for the case when very major reductions in carbon emissions are sought, the model predicts that such energy strategies would not involve significantly higher cumulative (1995–2050) discounted costs for the energy system than “business-as-usual” strategies. Furthermore, “business-as-usual” strategies, which were also modeled, will not enable China to meet all of its environmental and energy security goals. To meet these goals, an energy development strategy that relies on the introduction of advanced technologies is essential. To realize such strategies, policies are needed in China that will (1) encourage utilization of a wider variety of primary energy sources (especially biomass and wind) and clean secondary energy carriers (especially synthetic fluid fuels from coal and biomass), (2) support the development, demonstration and commercialization of radically new clean energy conversion technologies to ensure that they are commercially available beginning in the next 10 to 20 years, and (3) support aggressive end-use energy efficiency improvement measures.

Climate change mitigation in China

Climate change mitigation issues including China’s carbon emission status, the mitigation potential and cost in different sectors, the target of 40%–45% reduction of emission intensity of GDP in 2020 compared with the 2005 level, and conditions and uncertainties of the carbon emission peak are analyzed and assessed in the Third China National Climate Change Assessment Report and summarized in this paper. Economic structure adjustment has played and is expected to continue to play important role for carbon mitigation. Development of nuclear and renewable power would contribute to around 2 billion tons and 3.7 billion tons carbon reductions by 2020 and 2030 respectively. Key energy saving and low carbon technologies in the end-use sectors such as industry, transportation and building are listed and assessed. The mitigation potential and cost curve for steel is provided as an example to show that a large amount of carbon emissions could be reduced with minus mitigation cost partly resulting to energy saved. For industry process, carbon mitigation potentials would be around 420 million tons and 770 million tons by 2020 and 2030 respectively. Carbon mitigation potentials from LULUCF (Land use, land use change and forestry) are still uncertain and needed further research. For the assessment of 45% carbon intensity reduction target in 2020, it is concluded that economic structure adjustment, energy efficiency improvement, development of non-fossil energy, building and transportation would contribute to 33.4%, 28.5%, 20.4% and 17.3% of the total reductions. Assuming GDP growth rate as 6%–7% during 2010–2030, energy intensity reduction rate as 15% during 2015–2020, 14% during 2020–2025, and 13% during 2025–2030, the total primary energy consumption would be around 6 billion tons. To control coal use to less than 50% of the total primary energy consumption, while increasing the share of nature gas to over 10%, and the share of new and renewable energy to 20% or higher, carbon emissions would peak around 2030 at 11 to 12 billion tons. Finally, Climate change mitigation strategies to facilitate the achievement of China’s carbon emission peak target are proposed. It’s also suggested that measures are needed to accelerate the economy restructuring and development modes shift, to control the growth rate of total energy demand, to maintain a sustainable energy system with the new and renewable energy as its main components, and to achieve the carbon emission peak target by sector and region.

The future of natural gas coal consumption in Beijing, Guangdong and Shanghai: An assessment utilizing MARKAL

There are many uncertainties regarding the future level of natural gas consumption in China. In order to obtain a clear idea of what factors drive fuel consumption choices, we focus on three regions of China: Beijing, Guangdong, and Shanghai. Using an economic optimization model (MARKAL), we consider drivers including the level of sulfur dioxide emissions constraints set by the government, the cost of capital, the price and available supply of natural gas, and the rate of penetration of advanced technology on both supply and demand sides. The results from the model show that setting strict rules for SO2 emissions will be instrumental in encouraging the use of natural gas, and may also cause some reduction in CO2 emissions. The currently differentiated cost of capital for various sectors within the Chinese economy, on the other hand, artificially boosts the economics of capitalintensive coal relative to natural gas. This suggests that financial reform could be a lever for encouraging increased gas use.