©oecd/iea 2008 how much is enough? china ’s appetite for coal · recommendation: a properly...

INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE

© OECD/IEA

2008

How Much is Enough?How Much is Enough?

ChinaChina’’s Appetite for Coals Appetite for Coal

Electricity Policy Research GroupElectricity Policy Research Group

Judge Business SchoolJudge Business School

University of Cambridge University of Cambridge

27 October 200827 October 2008

Jonathan E. SintonJonathan E. SintonChina Programme ManagerChina Programme Manager

International Energy AgencyInternational Energy Agency


© OECD/IEA

2008

Tangu Port, Tianjin, 2005

photo: Edward Burtynsky

http://edwardburtynsky.com


© OECD/IEA

2008

If China…

� equaled US per capita coal use

it would use about twice as much coal as it does now.

� equaled US per capita total primary energy

it would use the equivalent of 87% of the 2006 world total.

� experienced 6% GDP growth to 2030 with energy growing half as fast

it would use twice as much energy as it does today, or about 1/3 of the 2006 world total.


© OECD/IEA

2008

3.5%

3.7%

5.8%

6.8%

7.2%

1.6%

14.5%

1%

32.4% 23.3%

16.6%24.8 %

15.4%

4.5%

4.4%

5.4%

7.8%

11.4%

8.7%

5%

Regional share

in 1973

in 20055%

20.2 % 12 %

21.5%

6.2%

13.7%

in 20305%

Regional patterns of energy demand are Regional patterns of energy demand are

evolving along with economic growthevolving along with economic growth


© OECD/IEA

2008

Reference ScenarioReference Scenario

World primary energy demand World primary energy demand

Under Reference Scenario assumptions, global demand grows by over half, with coal use rising most in absolute terms

0

2

4

6

8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billion tonnes of oil equivalent

0

2

4

6

8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billion tonnes of oil equivalent

Other renewablesBiomassHydroNuclearGasOilCoal

IEA, World Energy Outlook 2007, Reference Scenario


© OECD/IEA

2008

Asia: Half the story, and sometimes Asia: Half the story, and sometimes

more more

China & India contribute more than 80% of the increase in global coal demand to 2030 on current trends

0%

20%

40%

60%

80%

100%

Total

energy

Coal Oil Nuclear Hydro Power sectorinvestments

Rest of the worldIndiaChina

Increase in Primary Energy Demand & Investment Between 2005 & 2030 as Share of World Total



© OECD/IEA

2008

China’s energy demand more than doubles by 2030, with coal accounting for about half of the increase

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

1980 1990 2005 2015 2030

Mtoe

Other renewablesBiomassHydroNuclearGasOilCoal



ChinaChina’’s primary energy demands primary energy demand


© OECD/IEA

2008

China becomes a net importer of coal, while India’s import dependency rises strongly

- 500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2005 2015 2030 2005 2015 2030

mill

ion tonnes o

f coal equiv

ale

nt Production Net imports

% share of net imports in total demand

-3%

28%

3%

12%22%

2%

China India


Coal balance in China & IndiaCoal balance in China & India



© OECD/IEA

2008

Shendong

coalfield

to

IEA, Cleaner Coal in China, forthcoming


© OECD/IEA

2008

Moving towards fewer and Moving towards fewer and

larger coal mineslarger coal mines

- 400

0

400

800

1 200

1 600

0 1 10 100

avera

ge a

nnual

outp

ut (t

ho

usand

to

nnes)

number of mines (thousands)

1 024 Mt

440 Mt

830 Mt576 Mt

288 Mt

197 Mt

19952005

1995

2005

2005

1995

TVE & private

key state-owned

local state-owned



© OECD/IEA

2008

How much coal can be used depends, How much coal can be used depends,

in part, on how it is obtainedin part, on how it is obtained

Recommendation: A properly resourced mines inspectorate is

central to ensuring mine worker safety. China needs to strengthen its

own inspectorate and complement this by training and empowering coal miners to

take greater responsibility for their own safety. IEA, Cleaner Coal in China, forthcoming


© OECD/IEA

2008

Costlier coalCostlier coal

China Coal Newsletter 20 Oct 2008

Qinhuangdao



© OECD/IEA

2008

Alternative Policy ScenarioAlternative Policy Scenario

Incremental primary fossil fuel demand, Incremental primary fossil fuel demand,

20052005--20302030

New policies lead to a big reduction in coal demand, primarily through slower growth in electricity demand

- 200

0

200

400

600

800

1 000

1 200

1 400

Coal Oil Gas Coal Oil Gas

Mto

e

Savings compared with the

Reference Scenario

Alternative Policy Scenario

30 bcm

794 Mtce

293 Mtce

3.2 mb/d

1.1 mb/d

5 bcm

China India

IEA, World Energy Outlook 2007, Alternative Policy Scenario


© OECD/IEA

2008

High Growth ScenarioHigh Growth Scenario

China's incremental demand by fuelChina's incremental demand by fuel

Coal would see the biggest increase in demand in volume terms were China’s economy to grow faster

0

250

500

750

1 000

1 250

1 500

1 750

2 000

Coal Oil Gas Other

Mto

e

Reference Scenario

High Growth Scenario

IEA, World Energy Outlook 2007, High Growth Scenario


© OECD/IEA

2008

Catching up: Cumulative energyCatching up: Cumulative energy--

related COrelated CO22 emissionsemissions

Around 60% of the global increase in emissions in 2005-2030 comes from China & India

Cumulative Energy-Related CO2 Emissions

0 100 200 300 400 500

United States

European Union

Japan

China

India

billion tonnes

1900-2005

2005-2030



© OECD/IEA

2008

Base YearBase Year

PerPer--capitacapita eenergynergy--related COrelated CO22 emissions & emissions &

populationpopulation

IEA, World Energy Outlook 2007


© OECD/IEA

2008


PerPer--capitacapita eenergynergy--related COrelated CO22 emissions & emissions &

populationpopulation

In 2030, China’s per-capita emissions would still be less than half of the US.



© OECD/IEA

2008

A new energy revolution:A new energy revolution:

Cutting energyCutting energy--related COrelated CO22 emissionsemissions

Improved efficiency and decarbonising the power sector brings emissions back to current levels by 2050. A 50% cut requires revolutionising transport.

IEA, Energy Technology Perspectives 2008


© OECD/IEA 2008

To bring emissions back to current levels by 2050 a CO2 incentive of $50/t is needed. Reducing emissions by 50% would require a $200-$500/t incentive.

-200

0

200

400

600

800

1000

0 5 10 15 20 25 30 35 40 45 50

2050 CO2 Emissions Reduction From Baseline

[Gt CO2/yr]

Marg

inal

Co

st

[US

D/t

CO

2]

ETP2008

ACT MAP

ETP2008

BLUE

HighEstimate

LowEstimate

End-use efficiency

Transport alternative fuels

Power Sector

Industry

fuel switching &CCS

Energy efficiency is the cheapest way Energy efficiency is the cheapest way

to cut COto cut CO22 emissionsemissions



© OECD/IEA 2008

Average annual generation capacity Average annual generation capacity

additions: 50% COadditions: 50% CO22 cut scenario 2010cut scenario 2010--20502050



© OECD/IEA

2008

How do we get there from here?How do we get there from here?

Roadmaps help build consensus Roadmaps help build consensus

IEA, Energy

Technology

Perspectives

2008

Tongmei Datang Tashan coal mine, 15 Mtpa, 4 x 50MWe + 2 x 600 MWe© OECD/IEA 2008 22

Recommendation: Even as it pursues innovative new technical

and policy solutions, China should provide incentives to quickly adopt well-proven technologies, management practices and policies that deliver immediate, sustainable

improvements along the entire coal supply chain.

Recommendation: Encourage joint ventures and foreign direct investment in the energy sector to promote technology transfer, both into and out of

China.

China (Taiyuan) International Coal & Energy New Industry Expo. 16-18 Sep 2007

© OECD/IEA 2008 23

Recommendation: Co-operate with other

nations to establish technical performance standards for coal-fired power plants and their sub-systems to

promote the wider deployment of cleaner coal technologies, both in China and elsewhere.

Datang Tongmei power plant, 4 x 50 MWe CHP© OECD/IEA 2008 24

Recommendation: Make market-based mechanisms, such as international carbon trading, central to China’s CO2 abatement strategy and cleaner coal technology development for domestic and international markets.

Recommendation: International and national partnerships, supported by governments, industry and academia, can stimulate the development of

new technologies prior to their commercialization.

Xishan Coal Electricity Tunlan coal mine (6 Mtpa), and Gujiao power plant (600 MWe – planned to reach 3,000 MWe)

© OECD/IEA 2008 25


© OECD/IEA 2008

A few more of these would be welcomeA few more of these would be welcome

China Huaneng Group’s Gaobeidian power plant, Beijing3 ktpa postcombustion CO2-capture pilot plant

photo: Huaneng

©oecd/iea 2008 how much is enough? china ’s appetite for coal · recommendation: a properly...

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