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China Energy Issues in the 12 th Five Year Plan and Beyond Conference 23-24 Feb, 2012 Energy Studies Institute, National University of Singapore Energy Conservation Strategies in China Hua Liao(廖华) Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology (BIT) 北京理工大学 能源与环境政策研究中心 www.ceep.net.cn +86-10-68918551 [email protected]

Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

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Page 1: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

China Energy Issues in the 12th Five Year Plan and Beyond Conference23-24 Feb, 2012Energy Studies Institute, National University of Singapore

Energy Conservation Strategies in China

Hua Liao(廖华)Center for Energy and Environmental Policy Research (CEEP),

Beijing Institute of Technology (BIT)北京理工大学 能源与环境政策研究中心

[email protected]

Page 2: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Founded in 2009

15 faculty members

+30 graduates students

Research fields: Energy Supply and Demand

Energy Efficiency and Conservation

Energy Market and Carbon Markets

Climate Change and Environmental Issues

Energy Security and Warning

Agricultural Emission Reduction

Energy Modeling and System Development

http://www.ceep.net.cn/

Page 3: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Strategies in China

Energy conservation achievements

New policy targets

Policy actions

Opportunities and Challenges

Page 4: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Strategies in China

Energy conservation achievements

New policy targets

Policy actions

Opportunities and Challenges

Page 5: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Earlier policies

Resource-conservation: one of the three basic state policies

Stress both developing and saving, with priority given to saving

Page 6: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Earlier policies

Resource-conservation: one of the three basic state policies

Stress both developing and saving, with priority given to saving

0

500

1000

1500

2000

2500

3000

3500

1955 1962 1969 1976 1983 1990 1997 2004 2011

Hydro, Nuclear and Wind PowerNatural GasOilCoal

Y1980-2000

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1955 1962 1969 1976 1983 1990 1997 2004 2011

Y1980-2000

Sources: NBS (2012) and CEEP.

TPES (Mtce)Energy Intensity(Year 2005=1)

Page 7: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

National achievements in the 11th FY

China has made unprecedented efforts to energy conservation since 2006.

Page 8: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

0.75

0.80

0.85

0.90

0.95

1.00

1.05

2000 2002 2004 2006 2008 2010 2012

National achievements in the 11th FY

China has made unprecedented efforts to energy conservation since 2006.

In the 11th FY, total energy consumption increased 6.6%/y, while GDP grew by 11.2%/y.

Energy intensity was reduced by 19.1% in the 11th FY, equivalent to 340 Mtce savings.

TEC (Mtce) Energy Intensity(Year 2005=1)

19.1%reduction

Sources: NBS (2012) and CEEP.

0

500

1000

1500

2000

2500

3000

3500

1955 1962 1969 1976 1983 1990 1997 2004 2011

Hydro, Nuclear and Wind Power

Natural Gas

Oil

Coal

Page 9: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Provincial achievements

Energy intensity reduction assignment in the 11th FY

Sources: NDRC (2011) and Liao (2012).

12%

15%

16%

17%

20%

22%

Page 10: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Provincial achievements

All the regions except for Xinjiang have successfully accomplished the assignments.

Beijing ranks the first. It’s intensity decreased by 26.6%.

Energy intensity reduction assignment in the 11th FY

Sources: NDRC (2011) and Liao (2012).

12%

15%

16%

17%

20%

22%

Page 11: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Backward Production Capacities Phased-out in the 11th FY

45M casesGlass11.3MtPaper107MtCoke120MtIron72MtSteel370MtCement76.82GWSmall thermal power

The proportion of thermal power generating units with a generation capacity above 300,000 kw each in China’s thermal power installed capacity increased from 47% in 2005 to 71% in 2010.The proportion of large iron production blast furnaces with a capacity above 1,000 cu m each increased from 48% to 61%.

Source: State Council Information Office (2011).

Page 12: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy intensity of main industrial products decreased remarkably

-14.3%--Synthetic ammonia

-11.6%--Ethylene

-24.6%--Cement

-12.8%605 k/tce694 t/kceSteel-10.0%333 g/kwh370 g/kwhThermal power supply

ChangesY2010Y2005Product

Source: State Council Information Office (2011).

Page 13: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Nuclear power and hydropower in 2010

In end of 2010, 26 nuclear power units with a total installed capacity of 30.9 GW were under construction, making China a country with the largest scale of under-construction nuclear power capacity in the world.

In 2010, hydropower generation was 72.1 TWh, accounting for 17% of the national total power generation. For many years, China has stably ranked first in the world in both installed capacity, under-construction capacity and power generation of hydropower. At the end of 2010, the total installed capacity of hydropower is over 213 GW.

Sources: NBS (2011) and State Council Information Office (2011).

Page 14: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Wind power in 2010

Till the end of 2010, the total installed capacity of wind power reached 41.83 GW. Rank 1st in the world.

Source: NDRC (2011)

Page 15: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Solar Energy

The photovoltaic solar industry developed rapidly. Till the end of 2010, China had an accumulative installed capacity of 600 MW for PV solar power; the heat collecting area of solar water heaters had reached 16.8 million m2 .

Source: NDRC (2011)

Page 16: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Strategies in China

Energy conservation achievements

New policy targets

Policy actions

Opportunities and Challenges

Page 17: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Policy Levels

National 12th FYP (National congress)

Comprehensive Work Plan for Energy Conservation and

Emission Reduction During the 12th FY (State Council)

Sectoral Work Plan for Energy Conservation (Industrial,

Transport, Building, ...)

Provincial work plan (Provincial authorities)

Launch a campaign to get 10,000 enterprises to save

energy (company level)

Residential...

Page 18: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

New policy targets

In additional to conventional intensity targets, Controlling Total Energy Consumption is proposed.

Source: NDRC (2011)

Page 19: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

New policy targets

In additional to conventional intensity targets, Controlling Total Energy Consumption is proposed.

Reduce energy intensity by 16% in 2011-2015 (3.5%annually in average), and achieve energy savings of 670

Mtce. Reduce carbon intensity by 17% in 2011-2015.

non-fossil energy accounts for >11.4% in 2015, and >15% in 2020

Increase 40 million hectares of forest, and 13 billion cubic forest stock volume 2006-2020.

Source: NDRC (2011)

Page 20: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

New policy targets

In additional to conventional intensity targets, Controlling Total Energy Consumption is proposed.

Reduce energy intensity by 16% in 2011-2015 (3.5%annually in average), and achieve energy savings of 670

Mtce. Reduce carbon intensity by 17% in 2011-2015.

non-fossil energy accounts for >11.4% in 2015, and >15% in 2020

Increase 40 million hectares of forest, and 13 billion cubic forest stock volume 2006-2020.

Energy conservation is highlighted in the 12th Five-Year Plan than ever before.

Source: NDRC (2011)

Page 21: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Aggregate energy intensity reduction targets by province

10%

15%

17%

16%

18%

Sources: State Council (2011) and Liao (2012).

Page 22: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Strategies in China

Energy conservation achievements

New policy targets

Policy actions

Opportunities and Challenges

Page 23: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Policy actions: industrial structure

Limit the excessively rapid expansion of energy-intensive and highly-polluting industries

Eliminate backward production capabilities

Upgrading of traditional industries

Adjust energy structure

Increase the proportions of the service industry

Source: NDRC (2011) .

Page 24: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Policy actions: responsibility

Allocate the national targets to the regions

Improve energy statistical, monitoring and evaluation systems

Enhance the assessment of target responsibilities

Source: NDRC (2011) .

Page 25: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Policy actions: economic policies

Pricing mechanism reform

Gov. funding on energy conservation

Government green procurement

Reform of environmental and resource taxes

Curb the export of energy-intensive

Energy efficiency labeling and certification for energy-conservation products...

Source: NDRC (2011) .

Page 26: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Energy Conservation Strategies in China

Energy conservation achievements

New policy targets

Policy actions

Opportunities and Challenges

Page 27: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

How about in 2011

Total energy consumption climbed to 3.48 Btce.

The main industrial energy intensive products continued increasing. eg. finished steel 9.0%, cement 11.2%.

Energy intensity only reduced by 2.01%. According to this speed, it will only decrease by 9.6% in 12th FY, much lower than 16%.

0.75

0.80

0.85

0.90

0.95

1.00

1.05

2000 2002 2004 2006 2008 2010 2012

2.01%Reduction

in 2011

Source: NBS (22 Feb 2012)

Page 28: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

How about in 2011

Total energy consumption climbed to 3.48 Btce.

The main industrial energy intensive products continued increasing. eg. finished steel 9.0%, cement 11.2%.

Energy intensity only reduced by 2.01%. According to this speed, it will only decrease by 9.6% in 12th FY, much lower than 16%.

0.75

0.80

0.85

0.90

0.95

1.00

1.05

2000 2002 2004 2006 2008 2010 2012

The situation is not optimistic.

2.01%Reduction

in 2011

Source: NBS (22 Feb 2012)

Page 29: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Opportunities Large market capacity for high energy efficient

technologies 1.3 billion population, large product and infrastructure

demands,

Low average and marginal cost for each technology

Source: Liao (2012) .

Average cost

Products volume

Page 30: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Opportunities Unbalanced regional development means the

undeveloped can “import” new technology from the developed.

Source: Liao (2012) .

川渝

豫鲁

赣 闽

苏沪

黑吉 辽

滇藏

1.5

2.0

2.5

3.0

3.5

0.0 0.4 0.8 1.2 1.6 2.0

GDP per capita in 2010 (log scale)

Ene

rgy

Inte

nsity

in 2

010

(log

scal

e)

Page 31: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Opportunities Strong political will

Page 32: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Economic stages: industrialization and urbanization Investment-driven mode of economic growth, and most

investment are construction industry related.

Page 33: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Economic stages: industrialization and urbanization Investment-driven mode of economic growth, and most

investment are construction industry related. There many other economic-social development goals

are conflict to energy conservation. How much priority is given to energy conservation and how to trade off them are most difficult.

Page 34: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Economic stages: industrialization and urbanization Investment-driven mode of economic growth, and most

investment are construction industry related. There many other economic-social development goals

are conflict to energy conservation. How much priority on energy conservation and how to trade off them are most difficult.

Due to the complicate interests of all stakeholders, it is difficult to reform the energy pricing mechanism in the short run.

Page 35: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Economic stages: industrialization and urbanization Investment-driven mode of economic growth, and most

investment are construction industry related. There many other economic-social development goals

are conflict to energy conservation. How much priority on energy conservation and how to trade off them are most difficult.

Due to the complicate interests of all stakeholders, it is difficult to reform the energy pricing mechanism in the short run.

Many residents have weak sense on energy conversation especially when their incomes are high.

Page 36: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Economic stages: industrialization and urbanization Investment-driven mode of economic growth, and most

investment are construction industry related. There many other economic-social development goals

are conflict to energy conservation. How much priority on energy conservation and how to trade off them are most difficult.

Due to the complicate interests of all stakeholders, it is difficult to reform the energy pricing mechanism in the short run.

Many residents have weak sense on energy conversation especially when their incomes are high.

The high cost of energy conservation performance assessment.

Page 37: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges

The potential for energy intensity reduction is decreasing

Page 38: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Challenges Almost no one is responsible for the invisible energy

wasting, such as the short-life of buildings, roads,...

Directional blastingafter 13 years

The building is higher than thebridge pier of highway

Source: Xinhua

Page 39: Energy Conservation Strategies in Chinaesi.nus.edu.sg/docs/event/liao-hua.pdf滇 藏 陕 甘 青 宁 1.5 2.0 2.5 3.0 3.5 0.0 0.4 0.8 1.2 1.6 2.0 GDP per capita in 2010 (log scale)

Thanks for your attention!

Q&A