overview: sustainably meeting china s growing energy...

Overview: Sustainably Meeting China’s Growing Energy Needs

For APERC Annual Conference 2014 and Workshops

Nan ZhouChina Energy Group

Lawrence Berkeley National LaboratoryMarch 26, 2014

S1-3-1

Soaring energy demand and skyrocketing CO2 emission

Note: Mtce >> EJ = 0.0293; EJ >> Quads = 0.9478

~80% = energy-intensive industries

2

National Bureau of Statistics (NBS), 1981-2012. China Energy Statistical Yearbook. China Statistics Press. Beijing, China. EIA, 2012. Annual Energy Outlook.

~80% = energy-intensive industries

Need end-use detail to plan and evaluate energy efficiency policies, programs and targets for long term pathways and short term milestones

2

Source: NBS, 2013. Note: 1 tce = 29.28 GJ = 27.75 MMBtu.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2012

Mtc

e

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1980 1984 1988 1992 1996 2000 2004 2008 2012

Mtc

e

Primary Energy Use by Sector in China (1980-2012)

Commercial Transport Residential Industry

US

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2012

Mill

ion

Tonn

es o

f CO2

China

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2012

Mill

ion

Tonn

es o

f CO2

USEnergy-Related CO2 Emissions (2012)

Overall economy will continue to grow

0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2010 2020 2030 2040 2050

AgricultureIndustryTransportCommercialResidential

0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2010 2020 2030 2040 2050


4,475 4,558

Continued Improvement Accelerated Improvement

Primary Energy Use (Mtce)

5,213 5,481

3

Continued Improvement Scenario (CIS): •Meeting China’s planned standards and targets and following international experience in efficiency improvements

• Planned phase out of inefficient industrial and power plants

Peaking emission is possible, but depends on aggressive energy efficiency improvement and aggressive decarbonization

4

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2000 2010 2020 2030 2040 2050


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2000 2010 2020 2030 2040 2050


9,680

7,352

Mt CO2 Emissions

11,93111,192

Continued Improvement Accelerated Improvement

Many top-down analysis see China growing infinitely. We see it differently.

5

LBNL CIS, 5481

LBNL AIS, 4558

3195

4457

IEA Ref, 5473

3116

4114 IEA 450, 4197

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Tota

l Prim

ary

Ener

gy U

se (M

tce)

ERI Baseline @ IEA equiv.

ERI Efficient @ IEA equiv.

ERI Low Carbon @ IEA equiv.

ERI Accel Low Carbon @ IEA

Stand By

Fans

TV

Clothes Washer Refrigerator

AC*

0

50

100

150

200

250

300

350

400

450

1980 1990 2000 2010 2020 2030 2040 2050

Appl

ianc

e O

wne

rshi

p (#

Uni

ts/1

00 U

rban

HH)

Actual Projected

0

100

200

300

400

500

600

700

800

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Ind

ust

rial

Pro

du

ctio

n In

dex

(20

05=1

00)

Ethylene

Iron and Steel

Aluminium

Paper

Glass

Ammonia

Cement

(million tonnes) 2005 2030 20502005-30 AAGR

2030-50 AAGR

Iron and Steel 353 605.6 730.5 2.2% 0.9%Cement 1069 993.3 1002.4 -0.3% 0.0%Aluminium 7.8 15.8 15.6 2.9% -0.1%Paper 62.1 120.8 123.9 2.7% 0.1%Ammonia 40.5 42.9 40.5 0.2% -0.3%Ethylene 7.6 51.9 54.5 8.0% 0.2%Glass 20.1 37.3 27.5 2.5% -1.5%

Saturation Effects (appliance, infrastructure construction, fertilizer , etc.)

Slowdown of urbanization

Low population growth

Change in exports to high value added products

6

Energy reduction potential greatest in industry in early years, but later in buildings

6

5,2135,481

4,475 4,558

0

1,000

2,000

3,000

4,000

5,000

6,000

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Ener

gy D

eman

d (M

tce)

AgricultureIndustrialTransportCommercialResidential

Accelerated Improvement

Continued Improvement

7

Commercial sector will become a major electricity consumer, as the service sector comes to dominate China’s economic structure

7

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Tota

l Ele

ctrc

ity F

inal

Ene

rgy

Dem

and

(TW

h)


1%

40%

5%

36%

18%18%

30%

3%

48%

1%

CIS

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Tota

l Ele

ctrc

ity F

inal

Ene

rgy

Dem

and

(TW

h)


1%

45%

9%

29%

16%16%

24%

5%

54%

1%

AIS

Quantifying the scale of potential impacts of policies within and across sectors to guide policy prioritization

Note: Potential energy savings from building policies only considers heating and cooling, and does not include potential savings from lighting and equipment efficiency improvements.

Impact of appliances standards and labeling (S&L) programs

Contextualized impact of S&L programs and benefits of appliance efficiency to reducing need for new generation

Reduction = 30% of total building electricity demand; 12% of total electricity demand

22%13%

9%

8%

7%

5%

7%

9%

20%

25%

35% 40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2020 2030

Shar

e of

Tot

al E

lect

rici

ty R

educ

tion Others*

Air Conditioner

Refrigerator

External Power SupplyHeat Pump Water HeaterElectric Motors

446 TWh 830 TWh

Options for decarbonization in power sector, nuclear is crucial

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2000 2010 2020 2030 2040 2050

Gen

erat

ion

Out

put (

TWh)

Biomass and other RenewSolarWind PowerHydropowerNuclear PowerNG Fired CCOil Fired UnitsCoal _1000P MW UltSuperCoal _600 to 1000MW SuperCoal _300 to 600MW SubCoal _200 to 300MW SubCoal _100 to 200MWCoal _LT 100MW

41%

8%

44%

22%

1%

CIS

6%

13%

12%

1%13%

25%

12%

2%

2%2%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2000 2010 2020 2030 2040 2050Ge

nera

tion

Out

put (

TWh)

Biomass and other RenewSolarWind PowerHydropowerNuclear PowerNG Fired CCOil Fired UnitsCoal _1000P MW UltSuperCoal _600 to 1000MW SuperCoal _300 to 600MW SubCoal _200 to 300MW SubCoal _100 to 200MWCoal _LT 100MW

9%

10%

4%

30%

19%

AIS

16%

19%

17%

2%

54%

16%

2%

2%

11

Coal is mostly used in power generation, but will decline as the renewable and nuclear pick up

11

0

500

1000

1500

2000

2500

3000

3500

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Tota

l Coa

l Dem

and

(Mtc

e)

AgricultureIndustryCommercialResidentialOther TransformationCokingGeneration

10%

23%

53%

13%13%

14%

21%

51%

CIS

0

500

1000

1500

2000

2500

3000

3500

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050To

tal C

oal D

eman

d (M

tce)

AgricultureIndustryCommercialResidentialOther TransformationCokingGeneration

12%

26%

43%

17%

24%

16%

24%

34%

AIS

•Half of the coal used in non-power sector•Fuel switching is limited•The reduction relies on power sector decarbonization

Non-power sector

Reinventing Fire: China- sustainable energy infrastructure to preserve environmental quality and support future growth

12

u Reinventing Fire shows how the U.S. could run a 2.6-fold bigger economy by 2050 with no oil, no coal, no nuclear energy, and one-third less natural gas, with a $5-trillion lower net-present-value cost than business-as-usual—with the transition led by business for profit

u China’s technology leadership allows it to export many solutions to the rest of the world, particularly to developing world

u Emergence of China leaves a large opportunity for visioning and assessing new energy futures

u Utilizing CEG’s expertise and 8 years of development in long term energy demand modelling

China Energy GroupLawrence BerkeleyNational Laboratory

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2000 2010 2020 2030 2040 2050

Tota

l Prim

ary E

nerg

y Use

(Mtc

e)

Primary Electricity*PetroleumNatural GasCoal

2005 - 2030 Annual Growth: 3.4%2030 - 2050 Annual Growth: 0.3%

ContinuedImprovement

Scenario

13

By 2050, buildings and communities in China will be self sustained and resilient with increased comfort levels

Reinventing Fire2050 Buildings Vision

Passive Buildings Integrative Design

Super efficient appliances and space conditioning systems

Renewables, Fuel Switching and NetZero Energy Buildings

Microgrids and Demand Response

Prefabricatedbuildings

• Passive Housefor Northern residential building

• Natural ventilation and shading for Southernbuildings

• Day lighting

• Bundled and optimized measures

• Maximum wholebuilding system energy efficiency in a cost effective way

• Super efficient heating and cooling systems

• Super efficient AC, refrigerator, clothes washer, LED, and other equipment

• Onsite generation

• PV, solar thermal, geothermal

• From coal to natural gas and electricity

• Microgrid with distributed generation

• Storage such as battery, EV, fuel cells

• Demand response

• Smart control

• Longer building lifetime

• Durable,recyclable material

• Less material intensity

• Speedy and high quality construction

14

Reinventing Fire SCENARIO: POTENTIAL Buildings IMPACT

-20%

0%

20%

40%

60%

80%

100%

Actual 2010

2050 Baseline

Projection

Heating Intensity

Cooling Intensity

Retro-fitting

Existing Buildings

Renew-ables in Buildings

Lighting 2050 Reinventin

g Fire

Buildings energy use can likely be reduced to near net zero

Energy Reductions in the Reinventing Fire ScenarioIndexed (100% = Baseline energy use in 2050)

Coal to Natural

Gas Heating

Appliances

Passive House Renewables and Fuel Switching

Commer-cial Equip-

ment

Pre-fab Buildings

Integrative Design

Energy savings in industry sector

Super-efficient Appliances and Equipment

Design

15

Reinventing Fire2050 Transportation Vision

Reduced Private Auto Use

Auto Efficiency, Electrification

Freight Mode Shifting

Freight Logistics/Operations

Freight Vehicle Efficiency

Misc. Other Opportunities

• Smart growth,integrated transport planning, telecommuting

• Parking pricing, vehicle quotas

• Weight reduction, lowrolling resistance tires, aerodynamics

• Advanced ICEs, including HEVs

• Electric vehicles

• Bulk goods and intermodal onto rail

• Some shifting to waterway and pipeline

• Software and data to improve routes, loads,maintenance, and driver behavior

• Aerodynamics, low rolling resistance tires, advanced powertrains

• Lightweighthybrid or plug-in electric delivery vans

• Heavier trucks, road trains

• Switching to cleaner fuels

• Best practices and emerging tech for plane, train, buses,and boat efficiency

By 2050, China’s transportation system will provide increased mobility, but more efficiently, with fewer emissions, and lower costs

16

Reinventing Fire Scenario: Potential Transportation Impact

0%

20%

40%

60%

80%

100%

FreightPassenger

Actual 2010

2050 Baseline

Projection

VehicleUse

Efficiency &Electri-fication

Mode Shifting

Logistics Air, Rail, Waterway Efficiency

2050 Reinventing

Fire

Baseline energy consumption can likely be reduced by at-least 40%


Road Trains

Efficiency

Road passenger Road freight

17

Reinventing Fire 2050 Industry Vision

Production/Energy

Demand Reduction

Energy EfficiencyImprovement

Fuel Switching

/CCS

Structural Shift

Higher quality products and materials

Integrative design/system optimization

Lower carbon fuels More efficient processes within industries

Material recycling, material efficiency

Energy-efficient commercial and emerging technologies

Electrification and on-site electricity generation

Increase high value added, lower intensity industries

By-productsynergy/industrial parks

Energy management CCS Move from industry to service sector

By 2050, China’s industry is world-class in terms of energy efficiency and has moved away from carbon-intensive fuels

18

0

20

40

60

80

100

120

140

160

Actual 2010 2050 Frozenenergy Intensity

projection

2050 Baselineprojection

Material recycling Dematerialization Energy intensityreduction

Structural shift 2050 ReinventingFire

Tota

l Ind

ustr

y En

ergy

Use

(Baa

selin

e en

ergy

use

in 2

050

= 10

0)

Baseline demand

reduction, energy

efficiency, structural shift

Values are for illustration and are not results from this project

Reinventing Fire SCENARIO: POTENTIAL Industry IMPACT

Actual 2010

2050 Baseline

Material Recycling

Dematerial-ization

Energy Intensity

Reduction

Structural Shift

2050 Reinventing

Fire

Industry energy consumption can likely be reduced by >50%


Integrative design, system

optimization

2050 Frozen Energy

Intensity

19

Reinventing Fire2050 Transformation Sector Vision

Electricity Mining and refining Combined heat and power

Hybrid grid structure with partial decentralization

Coal and petroleum usesignificantly reduced

Proliferation of Zero Net Energy systems

Robust 2-way distribution network (significant demand response, EVs, storage, ZNE buildings)

Local gas resources developed (CBM, unconventional shale)

Integrated district heating designed into compact cities

Decarbonized generation sources (i.e., hydro, wind, solar, nuclear); CCS for remaining coal and new gas

Biodiesel and biogas

By 2050, primary energy demand in the transformation sector will be dramatically reduced , allowing for a large-scale shift to renewable supplies

Thank you!

For more information, please contact 周南 Nan Zhou

Tel: [email protected]

China Energy GroupLawrence Berkeley National Laboratory

Berkeley, CA 94720http://china.lbl.gov

21

Coal:China’s import is growing 50% a year, will be importing all coal available in APEC region in

three years with the rate.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

mill

ion

tonn

es

Actual

Sharp Peak

Broad Peak

+30% Recovery

Scenario 1:Sharp peak on 189 bt remaining reserves (Min. Land & Water Resources)

Scenario 2:Broad peak on 189 bt remaining reserves

Scenario 3: Broad peak with assumptions of 30% increase in recoverability of base reserves (+43 bt)

21

Trajectory China is on

•A supply curve to resource availability•Suggest coal price will remain strong

22

Oil:Domestic production plateaued, additional demand will be import

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Mill

ion

b/d Actual

URR=68 Gbbl

URR=114 Gbbl

Scenario 1:Ultimate recoverable reserves of 68 billion barrels (Feng, Li, Pang)

Scenario 2: Ultimate recoverable reserves of 114 billion barrels (Feng, Li, Pang)

22

23

Conventional Gas:Even with most optimistic forecast, will still be limited

0

20

40

60

80

100

120

140

160

180

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

billi

on c

ubic

met

ers

Actual

BP = 1.9 TCM

2003 Survey = 2.85 TCM

High = 6.8 TCM

Scenario 1: Remaining reserves of 1.9 TCM (BP; not used in supply cases)

Scenario 2: Remaining reserves of 2.85 TCM (as reported by Min. of Land & Water Resources)

Scenario 3: Remaining reserves of 6.8 TCM (assumes significant undiscovered)

23

U.S. 700 billion m3

a year

5% of the total energy

LBNL Key Findings for Alternative Energy Resources

u Shale gas most abundant alternative resource: recoverable resources of 15-25 tcm

u Maximum shale gas output in worst/best scenario could displace 105-395 million tonnes of raw coal (3-10% current consumption, thermal equivalent)

u Modeling shows output peaks within decade of commercialization; commercialization at early stage dependent on several key tech breakthroughs

u Coal seam methane (CMM, CBM) has ~10 tcm of resources, may be better alternative but R&D breakthroughs also needed

u Tight gas will become increasing proportion of natural gas supply

u Tight oil and oil shale unlikely to contribute much to total petroleum output

u Gas hydrates not major supply prospect; need long-term R&D Source: Liu, 2012, 12th Annual U.S.-China Oil & Gas

Industry Forum

25

Most of the industrial energy savings will be from iron & steel and cement sector

25

*Other Industry includes manufacturing, chemicals, light industry and all other small industrial subsectors.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Tota

l Prim

ary

Ener

gy U

se (M

tce)

Other Industry GlassEthylene AmmoniaPaper AluminiumCement Iron and Steel

CIS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050Tt

al P

rimar

y En

ergy

Use

(Mtc

e)

Other Industry GlassEthylene AmmoniaPaper AluminiumCement Iron and Steel

AIS

11.2

173.9

360.7

24.2

45.2

45.2

8.3

46.9

58.4

0

50

100

150

200

250

300

350

400

450

500

2005 2030 2050

Mill

ion

Uni

ts

Buses

MotorcyclesCars

Passenger road transport will be driven by a stock of 420 million vehicles

26

The private car ownership of 25% is still well below international levels(47% in US).

China is aggressively pursuing electric vehicles

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2010 2020 2030 2040 2050

Vehi

cle

Satu

ratio

n

Gasoline Diesel Gasoline Hybrid

Ethanol CNG LPG

Electric

CIS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2010 2020 2030 2040 2050

Vehi

cle

Satu

ratio

nGasoline Diesel Gasoline HybridEthanol CNG LPGElectric

AIS30% 70%

40%

10%

20%

25%

5%

28

Electric Vehicles Impact on Gasoline Demand

28

0

10

20

30

40

50

60

70

80

90

100

2000 2010 2020 2030 2040 2050

Gaso

line

Dem

and

(mill

ion

tonn

es)

Cumulative Reduction: 631 MT

Accelerated Improvement

Continued Improvement

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

50

2010 2015 2020 2025 2030 2035 2040 2045 2050

AIS

Chan

ge in

Tra

nspo

rt C

O2

Rela

tive

to C

IS (M

t CO

2)

DieselGasoline

Electricity

29

Electric Vehicles and Rail Electrification Impact on CO2, increase use in electricity, but emission offsets by power sector decarbonization from 2015

Electric Vehicles and Rail Electrification Impact on CO2

29

-160

-140

-120

-100

-80

-60

-40

-20

0

20

40

60

2010 2015 2020 2025 2030 2035 2040 2045 2050

AIS

Chan

ge in

Fue

l Dem

and

Rela

tive

to C

IS

(Mtc

e)

Electricity (Greater Rail Electrification)Electricity (More EV)

Diesel

Gasoline

Electric Vehicles and Rail Electrification Impact on electricity

Major Oil Product Imports and Exports: China will export diesel and gasoline due to the efficiency improvement and fuel switching while refinery output

portfolio keeps constant.

Imports(120)

(100)

(80)

(60)

(40)

(20)

-

20

40

60

2000 2010 2020 2030 2040 2050

Mill

ion

tonn

es o

il eq

uiva

lent

Heavy OilDieselJet KeroseneKeroseneGasolineNaphthaLPG

Exports

Imports

CIS

(120)

(100)

(80)

(60)

(40)

(20)

-

20

40

60

2000 2010 2020 2030 2040 2050

Mill

ion

tonn

es o

f oil

equi

vlae

nt

Heavy OilDieselJet KeroseneKeroseneGasolineAvgasNaphthaLPG

Exports

AIS

Imports

Most other models for long-term scenarios based on regressions (i.e., future is like the past). Our work is

based on detailed end-use (bottom up) modeling

Measures for Energy Reductions Indexed (100% = Baseline energy use in 2050)

Envelope measures

-20%

0%

20%

40%

60%

80%

100%

Retrofitting Existing

Buildings

Coal to Natural Gas

Heating

Actual 2010

2050 Baseline Projection

Heating Intensity

Cooling Intensity

Renewables in Buildings

Lighting 2050Appliances Commercial Equipment

Integrative Design

Design and holistic solutions

Renewables and Fuel Switching

Office Equipment and appliance

Factors Driving Energy Demand in Buildings

overview: sustainably meeting china s growing energy...

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