Updates on the Chinese Energy Sector and on the China LEAP

Modeling Effort

Yanjia Wang, Alun Gu, Aling Zhang

EETC, Tsinghua University, China

4th Asia Energy Security Workshop6-7 November 2006, Beijing, China

Part A: Update on the Chinese Energy Sector

Yanjia Wang

Where Does China’s Energy Go?

• Basic facts in 2005– Primary energy production 2.063 billion tce, 10% higher than pr

evious year;– Total energy consumption 2.225 billion tce, 9.47% higher than 2

004;– Coal consumption 2.14 billion ton, 11.4% higher– Power installed capacity: 517.18GW, 16.9% higher– Power generated: 2,497.5TWh, 13.82% higher– Crude oil consumption 3300 million ton, 13.8% higher– Crud oil import (net): 119 million ton, 1.4% higher– Petroleum import (net): 143.6 million ton, 5.2% less– Elasticity of energy production & consumption: 0.96– Elasticity of electricity production: 1.24– Elasticity of electricity consumption: 1.22

Where Does China’s Energy Go?• Macro control effected, but still a long way to go

2002 2003 2004 2005

Elasticity of energy consumption

0.66 1.53 1.59 0.96

Elasticity of electricity consumption

1.30 1.56 1.52 1.22

Growth of crude oil import (net) -- 33.4% 41.4% 1.45%

Growth of oil products import (net)

-- 49.3% 83.6% -33.9%

Commissioned power capacity 50GW 66.7GW

Total energy consumption growth rate

6.0% 15.3% 16.1% 9.5%

Coal Plays Dominate Role Continuously

Energy Production Energy Consumption

Year 1990 2003 2004 2005 1990 2003 2004 2005

Coal 74.2 75.1 76.0 76.3 76.2 68.4 68.0 68.7

Oil 19.0 14.8 13.4 12.6 16.6 22.2 22.3 21.2

NG 2.0 2.8 2.9 3.2 2.1 2.6 2.6 2.8

Elec. 4.8 7.3 7.7 7.9 5.1 6.8 7.1 7.3

Mix of Energy Consumption in 2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

World OECD China

hydro

nuclear

coal

NG

oil

Power Industry

Year Capacity/GW Share/%

Total Thermal Hydro Nuclear Total Thermal Hydro Nuclear

1980 65.9 45.6 20.3 -- 100 69.2 30.8 --

1990 137.89 101.84 36.05 -- 100 73.9 26.1 --

1995 217.22 162.94 52.18 2.10 100 75.0 24.0 0.1

2000 319.32 237.54 79.25 2.10 100 74.4 24.8 0.1

2003 391.41 289.77 94.90 6.19 100 74.0 24.2 1.6

2005 517.85 391.37 116.52 8.7Wind 1.26

GW

PV 15MW

100 75.90 22.5 1.6

1972-2004 New Constructed Power Plant (104 kW)

0

1000

2000

3000

4000

5000

6000

7000

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

GDP 2000按 年可比价计算

1.581.501.451.471.511.601.71

1.922.11

2.182.262.40

2.572.79

2.89

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.5019

90

1992

1994

1996

1998

2000

2002

2004

GDP 2000按 年可比价计算

???

ENERGY EFFICIENCY IN CHINA

Renewable Energy Law Effected on Jan. 1st 2006

NDRC issued a document for pricing renewable energy for power generation on Jan. 4t

h 2006.• Biomass for power tariff = coal-fired tariff (i

ncluding deSOx) + 0.25yuan/kWh for 15 years

• Wind power: tendering price and lowest bidder’s price

• PV, geothermal, wave..: project based approval price

20% Energy Efficiency Target

• National 11th Five-Year Plan(2006-2010): Energy intensity of GDP will decrease about 20% within 5 years.

• Give a quantified target on energy efficiency for the first time in five-year plans

• Divide total target to provincial, large industrial group, city, large energy consumers’ target to implement.

Tremendous Efforts Must be Made on Energy Efficiency Improvement

GDP Annual Growth Rate (2006-2010) (%)

Total GDP Growth during 2006 to 2010（ Times）

Energy Elasticity

7.0 1.403 0.303

7.5（ Government anticipation 2006-2010） 1.436 0.341

8.5 1.504 0.403

9.0（ 2000-2005 average ） 1.539 0.429

9.9（ growth rate of 2005） 1.603 0.468

10.0 1.615 0.472

11.0 1.685 0.508

15.0（ GDP double within 5 years） 2.011 0.602

Three Gorge Hydropower Fully Operate for the First Time

• 14×700MW generators fully operate on Oct. 18 2006

• 14×700MW generators commissioned on Sept. 2005

• The first generator commissioned on July 2003

• 26×700MW generators will commission by the end of 2008

Sluice will reach designed level-- 156 meter

• Water level before 156 meter (bottom) (taken on Aug. 8th 2006)

• Water level reached 154.24 meter (top) (taken on Oct. 22, 2006)

40GW Nuclear Power by 2020

First phase in Tianwan, Russian Pressed Water Reactor, being built.

First and Second Phases in Qinshan, domestic Pressed Water Reactor, operating;The third phase in Qinshan, Canadian Heavy Water Reactor, being built;Sanmen, 6GW, domestic Pressed Water Reactor

Yangjiang, authorized, technique to be chosen. Daya Bay, Ling’ao, French Pressed Water Reactor, operatingYangjiang 6GW, 2012 finished

☆☆

☆

☆☆

☆

☆

☆

☆

Northeast

BeijingNorth China

Northwest

Southwest East China

Central South

Weihai, 195MW Domestic Gas cooling reactor,Another two plants in

Rongchen, Hai Yang are under planning

Hongheyan 2GW,2011 finished

Operated Nuclear Power Plant List Date

Nuclear Power Plant Capaci ty

(MWe) Reactor Cri ti cal Operation

Reactor Suppl ier

Qinshan I 279 PWR Oct.1991 Apr.1994 CNNC

Qinshan I I (reactor 1)

610 PWR Nov.2001 Jun.2002 CNNC

Qinshan I I (reactor 2)

610 PWR Sep.2002 Apr.2003 CNNC

Qinshan I I I (reactor 1)

665 PHWR Oct.2002 Feb.2003 AECL

Qinshan I I I (reactor2)

665 PHWR Jul .2003 Nov.2003 AECL

Daya Bay I & I I 944 PWR Jul .1993 1994 Fra

Baya Bay I I 944 PWR Jan.1994 May1994 Fra

Ling Ao I& I I 935 PWR Feb.2002 2003 Fra

Ling Ao I I I & IV 935 PWR 2010-2011 Fra

Tianwan I & I I 1000 PWR Apr.2004 2007 Russia

Qinshan VI & VII 610 PWR Apr.2005 2010 CNNC

Qinshan I

Qinshan II

China Vice Primary Minister and Canadian Primary Minister attend the creamery of Qinshan III commissioned

Qinshan III

2×700 MW

US$2.88 billion

Daya Bay

Location of Nuclear Power Plants in Asia

Part B:China LEAP Modeling Effort

Basic assumptions

• Base year: 2000 (2005)

• Target year: 2030

• Dataset: AES2005

• LEAP2006 (slow calculation)

• Three scenarios: BAU, NAP,RAP

• Check inputs and outputs of base year (finish)

• GDP adjustment in 2004

The construction of new socialist countryside in China

• Narrow the widening gap between rural and urban China

• Improve agricultural production, living standards and public administration in the rural areas

• Rural facilities will be improved

• Rural consumption structure will be changed

Wind power industry update

• Wind power installed capacity in 2005: 1.26GW, increment: 0.498 GW (39%)

• Localization of 70%

• Initial investment: 7500-8500 yuan/kW

• In 2020, wind power installed capacity: 30GW (finish)

CDM projects in China

• CDM projects will decrease the operation cost in power industry in China (doing)

• Emission factor in China: about 0.8 kgCO2e/kWh(coal-fired)

• CERs (Certified emission reductions): US $ 10/tCO2e

• Emission reduction benefits: 0.064yuan/kWh• Average electricity tariff: 0.309 yuan/kWh

Nuclear power scenarios in China

Installedcapacity

(GW)share

Installedcapacity

(GW)share

Installedcapacity

(GW)share

S1 8.7 1.60% 25 3.50% 45 4.50%

S2 (BAU) 8.7 1.60% 20 2.80% 40 4.00%

S3 8.7 1.60% 15 2.10% 30 3.00%

2005 2010 2020

Installedcapacity

(GW)share

Installedcapacity

(GW)share

Installedcapacity

(GW)share

S1 8.7 1.30% 30 3.90% 70 7.00%

S2 (BAU) 8.7 1.30% 20 2.60% 40 4.00%

S3 8.7 1.30% 14 1.80% 20 2.00%

2005 2010 2020

Existing Lar Scale Coal FireHydroNuclearWindpowerGas fireOil combustionCHPSolar pvGeothermalAdvanced Large Coal fireCCGT base loadNew BiomassNew Landfill GasNew import from RFE to BeijingNew import from RFE to Shenyang

Transformation Results: Capacity

Scenario: BAU Reference, Capacity: All Capacities

2000 2010 2020 2030

Gig

awat

ts

1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

Nuclear

HouseholdsIndustryCommerceTransportAgriculture

Demand Results: Energy demand final units

Scenario: BAU Reference, Fuel: All Fuels

2000 2005 2010 2015 2020 2025 2030

Mill

ion

Ton

ne o

f Coa

l Equ

ival

ents

5,2005,0004,8004,6004,4004,2004,0003,8003,6003,4003,2003,0002,8002,6002,4002,2002,000

1,8001,6001,4001,2001,000

800600400200

0

Adjustment

Ongoing

• Transport sector (substitute fuel development)

• Renewable energy development in China: renewable energy power plants…

• ......

Thank you!

gal@tsinghua.edu.cn