Transcript China Thermal Power Efficiency Project

China Thermal Power Efficiency Project
WB support to the improvement of coal-fired
power generation efficiency in China
Jie Tang
Energy Specialist
East Asia and Pacific Region
Energy Supply to Sustain Economic Growth
Increased demand on energy supply, less energy intensive,
and sustainability
1. The 11th Five-Year Plan (2006-2010)

doubling the GDP (2000 - 2010)

Improving efficiency

reducing energy consumption per unit GDP by 20% (2005 to 2010)
Power sector: installation of large-sized, high-efficiency thermal
generators and scale up efficiency improvement
2. The medium and Long Term Energy Conservation Plan

reducing energy consumption per unit GDP by 2.2%

power sector highlighted for efficiency improvement
Coal as a Dominant Energy Source
Coal accounts for about 65% primary energy supply in China, and will
remain dominated until 2020.
CHALLENGES:
1. Long-term Energy Security

Providing affordable and reliable energy supply - 40% oil imported
2. Local Environmental Impacts

acid rains impact on agriculture and food security


SO2 emissions will double and NOx emission will triple from 2000 to 2020
particulates impact on population health

cost of exposure to particulates for urban residents expected to rise from $32
billion in 1995 to $98 billion in 2020 (WB: China 2020)
3. Global Environment Impacts – Climate Change

High coal consumption is leading to increased GHG emission
GHG Emission
(Billion tons)
increasing Greenhouse
Gas emissions
7
China
6
5
Indonesia, Vietnam
& Philippines
4
S. Korea, Thailand,
Malaysia
3
2
USA
1
2000
2001
2002
1996
1997
1998
1999
1993
1994
1995
0
1990
1991
1992
Billions of tons of CO2 from fossil
fuel consumption
High
fossil fuelfrom
consumption
is leading
to
CO
2 emission
fossil fuel
consumption
China’s CO2 emissions are expected to increase from 3.3 billion
tons in 2000 to 5.7 billion tons in 2020 (IEA 2004)
World Bank Support
Support renewable
energy development
Advices on
legislation,
policies and
sector
regulation
Challenges
Energy Security
Local Env Impacts
Climate Change
Support technology
transfer & development –
clean coal & EE
Support EE
improvement
Thermal
Power
Efficiency
Project
The Power Industry
- Capacity
Total installed capacity reached 442.4 GW by 2004, 12.6% increase from 2003
-
-
329.5 GW in
thermal, produced
about 82% of the
total electricity
output in 2004
about 50% of the
total coal
consumption of
1400 Mtce in 2004,
was for power
generation.
329.48 GW
350
300
250
200
150
100
105.24 GW
74.5%
50
6.84 GW
0.82 GW
nuclear
other
0
23.8%
hydro
thermal
Coal-fired Power Generation
- efficiency

The overall efficiency of coal-fired generation is about 20%
lower than best international practice
1985
1990
1995
Coal-fired Power Generation
- Way to improved efficiency
Mix of thermal power units in 2004
Unit
Number of sets
Average Gross
Efficiency (gce/kWh)
± 600 MW
53
328
± 300 MW
341
355
200 - 300 MW
218
340
100 - 200 MW
389
365
below 100 MW
> 4000
> 390
Overall Efficiency
~ 352
Sector-wide approach to
• Applying stringent efficiency standard on new capacity addition
• Phasing out small units
• Rehabilitation
Barriers to Efficiency Improvement
- barriers to efficiency improvement of existing units
Regulatory barriers

–
–
Lack of adequate policies, incentives mechanisms & enforceable standards for
efficiency management
Lack of detailed regulatory provisions supporting implementation of the Medium
and Long Term Energy Conservation Plan in the power sector
Institutional barriers

–
–
–
Weak enforcement of government policies
Weak supporting systems for efficiency management
Lack of obligations or incentives to invest energy efficiency improvements
Technical barriers

–
–
Lack of advanced technologies for rehabilitation of medium an large- sized units
Lack of advanced technologies for rehabilitation of plant auxiliary equipment to
improve overall plant efficiency
China Thermal Power Efficiency Project
- proposed for GEF Grant (US$19.7 million)
The project is designed to offer a systematic program to
increase the overall efficiency of China’s coal-fired power
plants

–
–
Phase-out small-sized
Facilitate investment in rehabilitation / retrofitting of in-efficient thermal
units through technical capacity building and demonstration
There are three components:

–
Enhancement and Enforcement of Sector Regulation on EE

–
–
A mandatory and incentive approach
Efficiency Improvement Demonstration Project (Rehabilitation)
Technical Capacity Building
China Thermal Power Efficiency Project
- Rehabilitation and technical capacity building
Efficiency Improvement Demonstration Project -- Rehab.

Identify about 10 sets of potential units in different categories of unit size

Technical auditing and justification (economic, financial, reliability)
–
–
–
–
Packaged solutions to unit / plant efficiency improvement
Financial justification / cost-effectiveness of individual as well as packaged solutions
Including environment project when possible – regulation requirements on emissions, financial implication to plant
owner
Market demand and implementation schedule
Development of new business and financing models for rehabilitation

–
Competing with other initiatives on plant own working capital (annual budget for Technical Renovation Funds)
Rehabilitation of units & plants for demonstration

–
about 57 units of 200MW and 57 units of 300 MW have similar type of technologies/design (double-flow turbines)
Technical Capacity building


TA to technology development and/or transfer to lower down cost of rehabilitation and to
explore further efficiency increase potential
Creation of awareness and dissemination of knowledge
China Thermal Power Efficiency Project
- project cost and financing
Project Components
Local
Financing
GEF
Grant
Estimated
Total
(US$m)
(US$m)
(US$m)
1.
Enhancement of Regulation on
Energy Efficiency
1.5
3.6
5.1
2.
Efficiency Improvement
Demonstration Project
85.5
(79)
8.5
94
3. Technical Capacity Building
6.6
7.6
14.2
93.6
19.7
113.3
Total Project Costs
•
Total cost estimation:
$113.3 million
•
US$93.6 million in counterpart funds, covering 100% of the capital investment in
demonstration (US$79 million) and partial cost of technical assistance activities
•
US$19.7 million GEF Grant, contributing to the cost of technical assistance
activities
China Thermal Power Efficiency Project
- GEF financing, carbon financing
GEF financing – contributing partially to the cost of
•
Policy and regulation enhancement
•
Technical auditing (bring international best practices when possible)
•
Technical capacity building – rehabilitation technology, plant service efficiency
•
Knowledge dissemination for replication
Carbon financing for rehabilitation – in considerations
•
Baseline: unit or plant itself - coal consumption rate and output (kWh) before
rehabilitation
•
ERs – reduced coal consumption for same amount of output (kWh) after
rehabilitation
•
Methodologies – to be developed
Thank you !