How to use modelling tools to answer questions on policy making in China

Kejun JIANG Kjiang@eri.org.cn Energy Research Institute, China

1

ERI, China

Energy consumption by fuels(1957-2008) 2500 2000 1500 1000 500 0
Hydro-power Natural Gas Crude Oil Coal

Mtoe

Year
2

2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1978

Energy Consumption per unit of GDP GJ/1000Yuan, 2000 constant price

5.00

4.00

3.00

2.00

1.00

0.00

Year

3

Index of industry products in China, 1975-2004 60 50 Index, 1978=1 40 30 20 10 0
1975 1980 1985 1990 1995 2000 2005

Chemical Fiber Paper Coal Crude Oil Natural Gas Electricity Steel Products Cement Plastics Machine Tools Motor Vehicle

Year

4

CO2 Emission in China, 1990-2005 6000 Milliton t-CO2 5000 4000 3000 2000 1000 0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Year

5

What is happening now on policy

• • • •

Negotiation in COPs, Copenhagen and after that 12th Five Year Plan on Energy, Climate change Low Carbon Development Planning and Strategy National long-term energy plan

6

7

Negotiation

• Targets? By 2020, 2030 or 2050? Intensity or absolute targets? • Commitment: domestic targets or actions, MRV, sector based approach • Cost and benefit? • Technology transfer needs?

8

Domestic climate change strategy • What is the targets of GHG in China? Short-term and longterm? • Key policies and countermeasures for low carbon future • Long-term Energy and emission pathways? • Economy development pattern? • Technology R&D strategy? What kind of technologies? • Near-term action and policies? Cost and benefit of these near-term policies?

9

Other policies • • • • • • • Energy security and supply Energy development strategy Energy technology development strategy Energy investment pathway: power generation Energy target: intensity, total amount control Environment target Environment strategy

10

Using modeling tools

• • • • •

Scenarios: pathways, targets (intensity and absolute) Cost analysis: wide range of cost analysis Multi-development targets analysis Benefit analysis by taking low carbon economy Co-benefit analysis (GHGs, local pollutions, water pollutions, and others) • Integrated analysis

11

What we are doing

• • • •

Low carbon scenario up to 2050 for China Technology roadmap up to 2050 Policy roadmap for deep cut in 2050 Political roadmap for Climate change in China and the world • Low carbon development for cities and provinces (more than 10 cities and provinces) • Cost and benefit analysis • Technology solution

12

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

IPAC-SGM

IPAC-AIM/MATERIAL

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

IPAC-Emission

Energy demand and supply Full range emission Price, resource, technology Medium-long term analysis Economic impact Short term forecast/ energy early warning Medium/short term analysis Technology assessment Detailed technology flow

Technology development Environment impact Technology policy

IPAC/Tech(Power/Transport) IPAC/SE, IPAC/EAlarm IPAC/AIM-Local IPAC-AIM/tech

Region analysis Medium/short analysis Energy demand and supply Technology policy

IPAC/Gains-Asia

AIM-air

IPAC-health

Climate Model

13

ERI, China

CO2 Emission in China
4000 3500 3000 2500

Mt-C

2000 1500 1000 500 0 2000 2005 2010 2020 2030 2040 2050

Baseline Policy ELC

14

油石 业采开气然天 业选采矿属金色黑 业选采矿属金色有

业工加草烟 业织纺 造制品制维纤他其及革皮装服 业造制具家、业品制草棕藤竹及工加材木 业品制纸及纸造 业造制品用育体教文 ,制复的介媒录记业刷印 工加油石 业焦炼 业造制品制及料原学化 业造制药医 业造制维纤学化 业品制料塑 ,业品制胶橡

业工加延压及炼冶属金色黑 属金色有 业品制属金 业造制备设用专、械机通普 业造制备设输运通交 业造制备设信通及子电、材器及械机气电 械机用公办化文表仪器仪 业工他其 业应供产生力电 业应供产生水热汽蒸 业应供和产生的气煤 业应供和产生的水来自 业筑建

Investment by industrial sectors

100000

业品制物矿属金非

120000

140000

160000

180000

20000

40000

60000

80000

0 2005 亿元

业造制、工加料饮品食

2010

2020

工业分部门投资

2030

2040

2050

业运采材竹及材木

,业选采矿他其

,业选采矿属金非

年份

15

Products output in major sectors, Low Carbon and ELC
U t ni St eel M l l i on i C ent em M l l i on i M l l i on i G ass l cases M l l i on i C opper Am oni a M l l i on m i Et hyl ene M l l i on i Soda Ash M l l i on i C asut i c M l l i on i Paper M l l i on i Fer t i l i zerM l l i on i Al um num M l l i on i i Paper M l l i on i C ci um cari bi lde al M l i on 2005 355 1060 2. 6 8. 51 5. 1 14. 67 12. 64 62. 05 52. 2 7. 56 46. 3 8. 5 399 2020 610 1600 7 16 7. 2 23 24 110 61 34 50 10 2030 570 1600 7 16 7 24. 5 25 115 61 36 50 8 2040 440 1200 6. 5 15 6. 5 23. 5 25 120 61 36 50 7 2050 360 900 4. 6 12 5. 5 22 24 120 61 33 45 4
16

t on t on t on t on t on t on t on t on t on t on t on t on

650

690

670

580

ec iv reS

Parameter of Urban Household: by 2030 same life quality as that in developed countries

0.8kWh/ 100 5.4 180 320W 3.5 100% 14 100% 18% 130 12 1500W 50 100 250 130 1.3 1.6 2020 288 42% 1.35 1.33 20%

0.8kWh/ 100 8 220 300W 3.2 100% 21 100% 25% 140 30 1800W 80 120 310 180 1.4 1.8 2030 336 44% 1.5 1.36 45%

0.7kWh/ 100 8 290 280 2.9 100% 27 100% 33% 260 50 2300W 100 130 390 260 1.6 2.2 2050 380 48% 1.6 1.4 65%

17

se tun M i W se tun M i HH001 rep HH001 rep HH001 rep

HH001 rep HH001 rep L HH001 rep

ecna i lppa c i r tce le reh to fo s ruoH ecnac i lppa c i r tce le reh to fo y t icapaC gn ikooc c i r tce le fo yad rep s ruoH gn ikooc c i r tce lE fo p ihs renwO re taeh ra loS fo p ihs renwO re taeh re ta fo p ihs renwO W HH rep thg iL LFC fo e ta r no i ta r teneP yad rep VT rep s ruoH VT fo y t icapaC ega revA VT fo p ihs renwO keew rep en ihca gn ihsaw esu o t se i t m m en ihca gn ihsaw fo p ihs renwO m ro te rege r feR fo ycne ic i f fE ro te rege r fe r fo ecaps ega revA ro ta reg i r feR fo p ihs renwO 1=0002 ,e i t no i taz i l i tu reno i t idnoc r ia fo xedn I m 1=0002 ,y t isne tn i reno i t idnoc r iA fo xedn I reno i t idnoC r iA fo p ihs renwO d radna ts ycne ic i f fe %05 h t iw gn id l iub fo e rahS 1=0002 ,e i t gn i taeh ecaps fo xedn I m 1=0002 ,y t isne tn i gn i taeh ecaps fo xedn I gn i taeh ecaps h t iw HH fo e rahS no i l l m ,d lohesuoH i ec iv reS

t inU

Transport, Low carbon scenario
2005
Family car ownership, per 100HH Family car annual travel distance, km Average engin size of family cars, litter Fuel efficiency of car, L/100km Share of MRT in total traffic volume, % Share of Biofuel, % Share of electric car, % Share of fuel cell car, % Urban Rural 3.37 0.08 9500 1.7 9.2 0.011 1.10% 0% 0%

2010
14 0.2 9500 1.6 8.9 0.016 1.30% 0.12% 0%

2020
36 8 9300 1.6 7.1 0.025 4.1% 3.2% 0.80%

2030
65 38 8635 1.6 5.9 0.046 7.70% 6.80% 1.60%

2040
77 70 8300 1.5 4.8 0.1 12% 12.5% 4.70%

2050
78 90 7480 1.4 4.1 0.21 13% 19.8% 7.90%

18

Comparison of BaU and Low Carbon Scenario
Technology Efficiency Ratio in 2030 Reference scenario Advanced coke 11900 Mcal/ ton coke, with gas production of 1340 Mcal 10300 Mcal/ ton coke, with gas production of 1420Mcal 2.4 Mcal/ ton J Recovery 58% Low carbon scenario 50% Ratio in 2050 Reference scenario 77% Low carbon Scenario 42% Fully localization Note

generation coke oven

17%

47%

23%

58%

ry quenching

80%

100%

90%

100%

Localization, with promising prospect of market potential Needed to localization be

intering furnace of international advanced level urnace of international advanced level Blast gas recovery

390 Mcal/ ton sinter lump, saving 42% of energy 3750 Mcal/ ton hot metal, saving 21% of energy Heat and electricity recovery 0.7 Mcal/ ton hot metal Saving energy 86% of

45%

85%

67%

90%

40%

65%

64%

87%

44%

70%

85%

100%

ontinuous casting

90%

98%

85%

95%

and

19

No. 1

Sector Industry technology

28 key technologies in the enhanced low carbon scenario in China

Technology High efficiency equipment

2

3

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Transport

Building

Power generation

Description energy High efficiency furnace, kiln, waste heat recovery system, high efficiency process technologies, advanced electric motor New manufacture process technology for cement and steel CCS In cement, steel making, refinery, ethylene manufacture Super high efficiency Advanced diesel hybrid diesel vehicle engine Electric car Fuel cell car High efficiency 30% higher energy aircraft efficiency Bio-fuel aircraft Super high efficiency With COP>7 air-conditioner LED lighting In house renewable Solar PV/Wind/Solar hot energy system water and space heating Heat pumps High isolation building High efficiency electric appliance IGCC/PolyWith efficiency above 55% Generation IGCC/Fuel cell With efficiency above 60% On shore Wind Off shore wind Solar PV Solar Thermal

Note Nearly market

in

Mature Mature Mature before 2030

Mature Mature before 2020

4th Generation Nuclear Advanced NGCC With efficiency above 65% Biomass IGCC CCS in power generation Alternative fuels Second generation bio-ethanol Bio-diesel Vehicles, ships, vessels Grid Smart grid Circulating Recycle, reuse, tecnologies reducing material use

20

Technology Roadmap

Ultra performance air-conditioni ng Popularization Rate: 100%

Advanced Solar Water heater/ heating Popularization Rate: 45%, of all the suitable construction

21

Investment in Energy Industry in China
14000 12000 10000 BaU

Energy Expenditures in China
300000 250000 200000

10^8Yuan

10^8Yuan

8000 6000 4000 2000 0 2000 2005 2010 2020 2030 2040 2050 Year

HLC HELC LLC

BaU HLC HELC 2000 2005 2010 2020 2030 2040 2050 Year

150000 100000 50000 0

Addtional Investment in end use sectors in ELC
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Industry Transport Year
-1.00% 6.00%

GDP Loss, %
2010 2020 2030 2040 2050
5.00% 4.00% 3.00% 2.00% 1.00% 650ppm 550ppm 450ppm Per Capita Carbon Intensity

10^8 Yuan

Building

Total

0.00% 2010 2020 2030 2050 2075 2100

22

Cost curve in power generation in China, 2050
4000 3000 2000

Yuan/t-C

1000 0 -1000 0 -2000 -3000 reduction, m-tC 200 400 600 800 1000 1200 1400 1600

23

t-CO2 10 15 20 0
ng

5

G ua ng do Jia Sh an g Ch on gq in g Ti ha i ng su

CO2 emission per capita, t-CO2

Provinces

an jin Sh an x

i Sh an do ng G ua ng xi Ni ng xia
24

CO2 emission from energy activities in Guang Dong, mt-C
广东能源活动C 2排放量 O 300 250 百万吨碳 200 150 100 50 0 基准情景 政策情景 低碳情景

2005

2010

年份

2020

2030

25

CO2 Emission in Beijing
60 50 40

Mt-C

30 20 10 0 2005 2010 2020 2030

BaU Policy Low Carbon

26

CO2 Emission from energy use: Jilin City
3000.0 2500.0
10000t-C

2000.0 1500.0 1000.0 500.0 0.0 2006 2010 2020 2030

BaU Low Carbon Policy Potential for CCS

27

28

Fixed Unit Ivestment 3000 2500 yuan/kW 2000 1500 1000 500 0
International International IGCC IGCC-Fuel Cell China IGCC China SC China USC

1995 2000 2005 2010 2020 2030 2050

29

CO2 Emission in China
4000 3500 3000 2500

Mt-C

2000 1500 1000 500 0 2000 2005 2010 2020 2030 2040 2050

Baseline Policy ELC

30

SO2 Emission
30 25 20
MtSO2

15 10 5 0 2005 2010 2020 2030 2040 2050

BaU LC ELC

31

Black Carbon Emission in China
2000 1800 1600 1400 1200 1000 800 600 400 200 0 2005 2010 2020 2030 2040 2050

1000ton

BaU LowCarbon

32

33

34

35

36

A Snapshot of Selected China Energy Options Today: Climate and Energy Security Impacts and Tradeoffs in 2025
Bubble size corresponds to incremental energy provided or avoided in 2025. The reference point is the “business as usual” mix in 2025. The horizontal axis includes sustainability as well as traditional aspects of sufficiency, reliability, and affordability. The vertical axis illustrates lifecycle greenhouse gas intensity. Bubble placements are based on quantitative analysis and ERI expert judgment.

Positive Climate Characteristics

Building Efficiency Industry Industry Efficiency Efficiency

Power Sector (this size corresponds to 40 billion kWh) by comparing low energy scenario and BaU Power Sector (this size corresponds to 40 billion kWh) by comparing low energy scenario and policy BaU Nuclear Nuclear Transport Sector (this size corresponds to 200 thousand barrels of oil per day) by comparing low energy scenario and BaU Transport Sector (this size corresponds to 200 thousand Liquefied barrels of oil per day) by comparing policy BaU scenario Natural Gas (LNG) Clean Coal and BaU
Imports
(IGCC) with CO2 Capture

Vehicle Fuel Efficiency Standard
Solar PV Ultra-Super Critical Hydro Hydro Wind Biomass Power Cellulosic Ethanol Plug-In Hybrids

Biodiesel

CO2 -Enhanced Oil Recovery

Reduce Energy Security
For specific details on the assumptions underlying the options on this chart, go to www.wri.org/usenergyoptions

Corn Ethanol

Business As Usual In 2025

Oil Imports

Increase Energy Security

Gas-to-Liquids

Expanded Domestic Oil Production Coal-to-Liquids (with carbon capture) Coal-to-Liquids (no carbon capture)

Revised 7/10/2008

Negative Climate Characteristics

37

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