Transcript China Energy 2020

THE WORLD BANK
Coal and the Search for Energy
Security:
Challenges Facing China
Junhui Wu
Energy Sector Manager
East Asia and Pacific Region
EAP to account for 30% of global
energy demand growth 2002-20 (IEA 2004)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2002
2010
USA+Canada
South America
Rest of the World
2020
EU
South Asia
Developing East Asia
Japan+Korea
EAP in 2010: Coal dominant, oil & gas rising
Primary energy consumption (IEA 2004)
2,500
Biomass
2,000
Other
renew ables
Hydro
1,500
Nuclear
1,000
Gas
Oil
500
Coal
Japan+Korea
2002
EU 2002
USA+Canada
2002
EAP 2010
(BAU)
China 2002
0
EAP 2002
• Fastest energy demand
growth among all regions in
the world
• Coal to account for nearly half
of primary energy 
environmental impacts
• Oil imports to rise  security
concerns
• Gas low; renewables very low
– aggressive promotion
needed
• Power generation dominated
by coal (~75%); oil (~10%);
gas (~10%); rest renewables +
nuclear
Primary energy (Million tons oil equiv)
Regional Context
Million tons oil equivalent (Mtoe)
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China's 2000 GDP to quadruple in two decades
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China Context:
What the
projections say?
China GDP growth assumptions of major energy forecasts (billions of 2002$)
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Official (10th 5-yr Plan)
US DOE High
DRC
US DOE Ref
3,500
DRC BAU: In 2020,
2.5 times 2000 level
Millions of Tons of Coal Equivalent
IEA 2004: In 2020,
2.43 times 2000 level
2,000
IEA 2002: In 2020,
1.75 times 2000 level
1,500
1,000
2020
2018
2016
2014
2012
2010
2008
US DOE High Growth
US DOE Low Growth
IEA 2004
DRC Sustainability
2006
2004
2002
2000
1998
1996
1994
1990
1980
0
1992
Actual
US DOE Ref case
IEA 2002
DRC Bus As Usual (BAU)
DRC Green Growth
500
2030
2028
2026
2024
World Bank (China 2020)
US DOE Low
China Primary Energy Forecasts
2,500
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
Actual to 2002
IEA 2002
3,000
Energy consumption in
China expected to rise
from 1,300 Mtce in 2000
to between 2,290 and
3,280 Mtce in 2020.
1998
1996
1994
1992
$0
1990
Government’s goal is to
quadruple real GDP from
$1,081 billion in 2000 to
$4,132 billion in 2020
(2000 dollars).
This may only be the beginning
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Per capita energy consumption will still be low in 2020
– with plenty of room for growth
China's per capita energy use could grow far
beyond 2020
Tons coal equivalent
per capita
14
USA 2002
12
10
8
S. Korea 2002
6
4
Germany 2002
Japan 2002
UK 2002
China 2002 to 2020
2
India 2002
-
-
10,000
20,000
30,000
GDP per capita (2002$)
40,000
Consensus: coal will remain dominant and
oil imports will surge!
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•
• Coal will dominate (>50% of
primary energy till 2020). Coal
consumption to increase from
1.3 billion tons in 2000 to
between 2.1 and 2.9 billion
tons in 2020.
China will remain heavily dependent on coal till 2020
Fuel Mix - Primary Energy 2020 (IEA 02, Mtce)
US-Canada
EU
China
Russia
Jap-Aus-NZ
India
Brazil
Mexico
Indonesia
Korea
-
500
Coal
1,000
Oil
1,500
Gas
2,000
Nuclear
2,500
3,000
Hydro
3,500
4,000
4,500
Other Renewables
5,000
Gas to expand to 7%-9%
of primary energy by
2020 increasing from 26
bcm in 2000 to around
159 bcm in 2020.
• Oil will account for about
27% of total primary
energy in 2020.
Consumption increase
from 4.6m barrels per day
in 2000 to between 9 and
12.2m barrels per day in
2020.
• Other sources (nuclear,
hydro, other renewables) will
account for less than 5% of
primary energy in 2020.
Energy Efficiency:
Potential exist but more difficult to tap
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China has made great progress in reducing waste...
…further reductions in
intensity will not be as
easy to realize
(Energy intensity: tons of oil equivalent/1,000 dollars of GDP 1995$)
2.5
2.0
1.5
1.0
0.5
A More Energy-Efficient
Growth Path for China?
Actual
DRC - Green
US DOE - Ref
DRC - Ord Eff
IEA 02
US DOE - Low
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
0.0
12
GDP/total energy use (PPP$/kg of oil eq) 2001
11
DRC - Sustainability
US DOE - High
10
Hong Kong
9
8
Energy intensity of Chinese industries still high
7
Gap between energy consumption/unit output in China and
international best practice
5
0%
50%
100%
Thailand
6
150%
4
Japan
3
Coal for power gen
Steel
China
2000
2
1980
1
South
Korea
0
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
GDP per capita (PPP$, 2001)
Cement
Trucks (fuel oil)
Sources:The Economist World in Figures 2003, WDI 2003
emissions growth expected from China
(IEA 2004)
30,000
25,000
WORLD
20,000
ALL DEVELOPING
COUNTRIES
15,000
USA+CANADA
10,000
OECD EUROPE
5,000
CHINA
2020
2015
2010
2005
2000
1995
1990
1985
1980
1975
0
1970
International community’s focus
is on global environment:
China’s CO2 emissions are
expected to increase from 3.3
billion tons of carbon in 2000 to
5.7 billion tons in 2020 (IEA
2004).
A quarter of 2002-2020 global CO2
1965
•
China’s focus is on local
environmental damage:
 acid rain as SO2 emissions
double and NOx emission
triple between 2000 and
2020 impact on agriculture
and food security
 particulates  population
health cost of exposure to
particulates (for urban
residents) expected to rise
from $32 bn in 1995 to $98
bn in 2020 (WB: China 2020)
1960
•
CO2 emissions (Million tons of carbon)
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Safeguarding the environment:
Finding the common ground
Gross Efficiency in Energy Production
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China
1990
2000
2002
2004
Installed Capacity in GW
138
319
357
441
of which Thermal
102
238
253
325
Gross Efficiency (gce/kWh)
392
363
357
352
India
China
USA
Germany
UK
Japan
1985
1990
1995
France
Decreasing efficiency in coal-fired generation
?
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Improvements in China’s gross efficiency in power generation is expected
to halt or reverse due to rapid growth of smaller less efficient units
Coal Fired
Generation
Gross
Efficiency
(gce/kWh)
2002
357
320
Total
Unit Size 300MW
and above
Unit Size 100MW to 350
300 MW
Unit Size below 100 390
MW
Installed Installed Growth
Capacity Capacity %
2002
2004
249
106
360
142
45
34
82
114
39
61
104
70
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Barriers to scale-up of deployment of
clean coal technologies
Pricing issue, lack of incentives
Emission standards: Less stringent to older power plants as well
as new small plants (less than 100 MW)
Environment regulation enforcement issue
Planning issue during transition in sector restructuring
None availability of efficient clean coal technology and
equipment domestically, especially for small and medium power
plants
Acute power supply shortage (New capacity: rush for installation
of small units to avoid approval process; Existing units, not
practical for outages)
Recommendations:
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New Park- leapfrogging to newest technologies and most
stringent energy standards
Existing Park- intensify efficiency improvement
Technology transfer from international community and increased
investment in China’s R&D.
World Bank Involvement in the Energy Sector
- Past and Future
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1. Policy Dialogue and Technical Assistance
1.
2.
3.
4.
5.
Assisted in developing long-term energy strategy – on-going study
“China Energy 2020”
Contribution to formulation of 《China Renewable Energy Law》
Policy recommendations supporting the deployment of clean coal
technologies
Assisted in setting up project processing criteria/procedures, with
adequate focus on economic, social and environmental sustainability
Contribution to development of coal sector restructuring and
development strategy – a study just started
2. Lending
1.
2.
3.
3.
Introduction of China’s first 300, 600 and 1000 MW coal fired units,
greatly improved efficiency in generation
Diversified sources for generation: hydropower, gas, renewable energy
Energy Efficiency, building efficiency and heating
Carbon finance and GEF
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Thank you
Junhui Wu
Energy Sector Manager
East Asia and Pacific Region
Contact: [email protected]