Modeling China's energy future

Abstract

The analysis in this paper builds on a previous China MARKAL modeling effort to further explore alternative energy-technology strategies and assess the extent to which they could enable China to meet its social and economic development goals while ensuring national energy-supply security and promoting environmental protection and sustainable development. The present analysis is intended to help sharpen the focus on key strategic issues, policies, and programs for promoting an advanced energy-technology strategy in general and coal polygeneration technology in particular. The detailed assessment of coal polygeneration technology is warranted because of its potentially central role in providing clean synthetic transportation fuels as well as electricity. The paper explores the following set of specific issues: (1) the costs and benefits of advanced energy-technology strategies compared to strategies based on coal combustion for electricity generation and direct coal liquefaction to produce liquid fuels, (2) the impact that delays in the introduction of polygeneration technologies might have on overall energy system costs and on meeting environmental and energy security goals, (3) the impact of future, crisis-induced oil price shocks, (4) the impact of insufficiently aggressive end-use energy efficiency efforts, and (5) the relative costs of achieving reductions in air pollution and CO 2 emissions with different energy-technology strategies. The analysis indicates that an energy development strategy based on advanced technologies, including efficient end-use technologies, renewables, and coal gasification-based energy supply technologies, can enable China to meet economic development, clean air, energy security and greenhouse gas mitigation targets consistent with sustainable development. A “business-as-usual” strategy, even including direct coal liquids technology, cannot meet target caps on oil and gas imports. In addition, the analysis indicates that over the 55-year modeling period (1995 to 2050) an advanced technology strategy would involve only a small (1 %) increase in total energy-system cost compared with a “business-as-usual” strategy. The advanced technology strategy requires significantly higher capital investments in energy technologies, but these result in significantly lower fuel costs, especially from reduced fuel imports.