Enabling China’s Low-Carbon Energy Transformation · On their pathways to decarbonization, solar...

TU Berlin – WIP

Bobby Xiong

OR - Student Research Project

March 13, 2018

Enabling China’s Low-Carbon Energy Transformation

Through Expanding its Transmission Grid

Hans Hosenfeld, Alexandra Krumm, Linus Lawrenz, Luise Lorenz, Bobby Xiong

Operations Research – Methods for Energy and Resource Markets

Technische Universität Berlin – Faculty VII (School of Economics and Management) – Workgroup for Infrastructure Policy

Sustainability Week 2018 – March 13, 2018

- 1 -TU Berlin – WIP

Bobby Xiong


March 13, 2018

1) Overview

2) Conventional and renewable energy sector in China

3) Model results

4) Barriers

5) Conclusion

Agenda


Bobby Xiong


March 13, 2018

Introduction

Shentou Second Power Plant (2 GW)Shuozhou, Shanxi, China

Source: Own photograph taken on March 7, 2018


Bobby Xiong


March 13, 2018

Introduction

An employee of the Jinan vehicle administration department installs a plate

on an electric car in Jinan, Shandong province, Dec 1, 2016.

Source: China Daily

http://www.chinadaily.com.cn/china/2016-12/02/content_27544973.htm

China Merchants New Energy/Panda Green Energy,

the 1500 acre panda solar farm in Datong, Shanxi, China

Source: Digital Globe

https://www.getrevue.co/profile/dailyoverview/issues/solar-pandas-in-

datong-northern-china-106596


Bobby Xiong


March 13, 2018

Political overview

Key country

data

Population

GDP

Poverty rate

• China currently consumes more than half of the world’s coal production and emitted around 10.4 Gt CO2 in 2015

• The Chinese government is facing the twin challenge of confronting development challenges and the low-carbon energy transformation

• In the biggest cities, air pollution as well as water and soil pollution has been the dominating environmental problem, although not as

high in public attention, are becoming equally problematic

• The Communist Party of China (CPC) governs the country and is the leading organ in the nation’s fight on climate change within its Five-

Year-Plan (FYP)

• Official plans of the CPC, intend to increase the share of non-fossil energy generation up to 39% of by 2020, with major adds to solar,

nuclear and wind power

Electrification

Share of RES

Capacity inst.

Primary

energy

consumption

1.379 billion1

7.544 metric tons1

US$ 11.199 trillion1

5.8 % (< $ 1,9/day)2

CO2

emissions

p.c.

100 %1

127.82 EJ3

33 % (of IC)3

1.530 TW3

Energy policy overview

1) World Bank Group 2016, 2) Asian Development Bank 2017, 3) National Energy Agency of China 2016


Bobby Xiong


March 13, 2018

Public interest groups

• The federal system in China is highly responsible for the success or failure of the implementation of environmental policies, since every

local reporting unit gets to their specific area scaled targets

• State-owned companies and ministries are dominating both the generation and distribution of energy

• The Chinese government acknowledged the opportunities of taking a leading technological position through a “green development” in the

world

• Societal interest groups and ENGOs call for environmental sustainability to avoid undermining the country’s social stability and protect

future generations against climate change

• Several policy making instances implemented participation possibilities for local population

Private and industrial interest groups

• Private and industrial interest groups in the energy context can often be related to stately interests due to an high amalgamation of state

ruing authorities and businesses

• The Chinese power sector is characterized by powerful quasi-monopolies, with a high influence to the national policy making process

• Several multilateral banks and export credit agencies within the OECD countries restricted their coal financing in China

Interest groups in energy policies


Bobby Xiong


March 13, 2018

1) Overview


3) Model results

4) Barriers

5) Conclusion

Agenda


Bobby Xiong


March 13, 2018

Installed power capacity

Source: National Bureau of Statistics of China (2017) Source: AGEE, BMWi, Bundesnetzagentur (2018)


Bobby Xiong


March 13, 2018

China‘s present electricity and heat generation

Source: Own illustration based on IEA (2014)

coal90%

oil5%

gas4%

others total1%

Share of heat generation by technology

Source: Own illustration based on IEA (2014)

Installed heat capacity


Bobby Xiong


March 13, 2018

Source: Own illustration based on NEA, NDRC (2016, 5)

Development of China's energy sector during the 12th FYP period

China’s energy sector in the previous (12th FYP) period


Bobby Xiong


March 13, 2018

China’s renewable energy targets under the 12th FYP and 13th FYP

Source: Own illustration based on NEA, NDRC (2016)

0

100

200

300

400

500

600

700

800

12th FYP targets 13th FYP targets

Capacity targ

ets

in G

W

Period

Geothermal

Biomass

CSP/STE

Solar PV

Offshore wind

Onshore wind

Hydropower

The 12th FYP period and 13th FYP in comparison


Bobby Xiong


March 13, 2018

Source: http://berc.berkeley.edu/energy-access-developing-parts-china/

Regional energy consumption across China (2015)

Key energy consumption areas


Bobby Xiong


March 13, 2018

China‘s different subregions

Source: Own illustration.

1. China-CentralChongqing, Henan, Hubei, Hunan, Jiangxi, Sichuan

2. China-EastAnhui, Fujian, Jiangsu, Shanghai, Zhejiang

3. China-NorthBeijing, Hebei, Inner Mongolia, Shandong, Shanxi, Tianjin

4. China-NortheastHeilongjiang, Jilin, Liaoning

5. China-NorthwestGansu, Ningxia, Qinghai, Shaanxi

6. China-SouthGuangdong, Guangxi, Guizhou, Hainan, Yunnan

7. China-TibetXizang

8. China-UygurXinjiang

China’s nodesplit for GENeSYS-MOD

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 14 -

China’s electricity production (2015) – 100% RES sc.


China’s electricity production (2050) – 100% RES sc.

China’s regional power generation

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 15 -

Endogenous transmission capacity expansion


Endogenous (left) and exogenous (right) expansion

• Total power trade in 2050 within endogenous transmission

capacity expansion

• Earlier independence from conventional energy sources

through grid expansion

Targeted network expansion as a catalyst


Bobby Xiong


March 13, 2018

1) Overview


3) Model results

4) Barriers

5) Conclusion

Agenda


Bobby Xiong


March 13, 2018

• Behavioral change caused by increasing levels of prosperity and the demand

for displaying social rise through material status symbols (e.g. cars)

• Perception of environmental standards as barriers to economic growth

• Areas of tensions between federal implementation levels and national plans

– incentive arrangement

• Measurability and scalability of national targets to the federal system and

reporting units

• Since China’s FYP targets are only binding within a short term, the low-

carbon energy transformation is highly dependent on the governments

motivation

• Due to measurements being planned on a government level, a market driven

allocation of resources is missing

Political

Barriers

Economic

Barriers

Social

Barriers

Key barriers


Bobby Xiong


March 13, 2018

1) Overview


3) Model results

4) Barriers

5) Conclusion

Agenda

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 19 -

Model results

1. Model results show that sustainable energy pathways for China towards a low-carbon energy transformation are both technically achievable

and economically feasible.

2. On their pathways to decarbonization, solar power will play an essential role, contributing around 70% of the generation mix in 2050.

3. Next to solar power, wind and hydropower will play a major role in the future energy mix of China.

4. Biomass and electric furnaces will mostly serve the demand for heat.

5. A targeted expansion of China’s backbone power grid may speed up the fade out of conventional power sources within the transformation

path.

Challenges

• The biggest challenge for the renewable roadmap will be unbalanced distribution of renewable energy potentials and higher power

consumption in the metropolitan areas

• Inhomogeneous implementation of policies on a national and provincial level

Next steps

• Refining our research for publication

• 12th ENERDAY (TU Dresden), 41st IAEE International Conference Groningen 2018

Conclusion

TU Berlin – WIP

Bobby Xiong


March 13, 2018

Enabling China’s Low-Carbon Energy Transformation

Through Expanding its Transmission Grid

Hans Hosenfeld, Alexandra Krumm, Linus Lawrenz, Luise Lorenz, Bobby Xiong

Operations Research – Methods for Energy and Resource Markets

Technische Universität Berlin – Faculty VII (School of Economics and Management) – Workgroup for Infrastructure Policy

Sustainability Week 2018 – March 13, 2018

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 21 -

Asian Development Bank. 2017. “Poverty in the People’s Republic of China.” Text. Asian Development Bank. May 23.

https://www.adb.org/countries/prc/poverty.

Burandt, Thorsten, Karlo Hainsch, Konstantin Löffler, Heinrich Böing, Jenny Erbe, Ivo-Valentin Kafemann, Mario Kendziorski, et al. 2016.

“Designing a Global Energy System Based on 100% Renewables for 2050.” Student Research Project. Berlin: Technische Universität

Berlin.

CCCP. 2006. “The 11th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2006-2010).” Beijing, China:

Central Committee of the Communist Party of China.

———. 2011. “The 12th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2011-2015).” Beijing, China:

Central Committee of the Communist Party of China.

———. 2015. “The 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2016-2020).” Beijing, China:

Central Committee of the Communist Party of China. http://en.ndrc.gov.cn/newsrelease/201612/P020161207645765233498.pdf.

Dai, Yixin. 2015. “Who Drives Climate-Relevant Policy Implementation in China?” Evidence report 134. Beijing, China: School of Public Policy

and Management, Tsinghua University.

https://assets.publishing.service.gov.uk/media/57a08985ed915d622c000267/ER134_WhoDrivesClimate-

relevantPolicyImplementationinChina.pdf.

EIA. 2016. “International Energy Outlook 2016.” Reference Case Projection Tables. Reference Case Projection Tables 2011–40. Washington,

D.C., USA. http://www.eia.gov/forecasts/ieo/ieo_tables.cfm.

Key references

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 22 -

EndCoal. 2017. “End Coal | Summary Statistics.” End Coal. http://endcoal.org/global-coal-plant-tracker/summary-statistics/.

IEA. 2014. “China, People’s Republic of: Electricity and Heat for 2014.” International Energy Agency.

https://www.iea.org/statistics/statisticssearch/report/?country=CHINA&product=electricityandheat&year=2014.

———. 2015a. “India Energy Outlook.” In World Energy Outlook 2015. Paris: International Energy Agency.

———. 2015b. “Projected Costs of Generating Electricity 2015 Edition.” Paris, France: International Energy Agency. https://www.oecd-

nea.org/ndd/pubs/2015/7279-proj-costs-electricity-2015-es.pdf.

Liu, Lei, Pu Wang, and Tong Wu. 2017. “The Role of Nongovernmental Organizations in China’s Climate Change Governance: Role of NGOs.”

Wiley Interdisciplinary Reviews: Climate Change, August, e483. doi:10.1002/wcc.483.

Löffler, Konstantin, Karlo Hainsch, Thorsten Burandt, Pao-Yu Oei, Claudia Kemfert, and Christian von Hirschhausen. 2017. “Designing a Global

Energy System Based on 100% Renewables for 2050 - GENeSYS-MOD: An Application of the Open-Source Energy Modelling System

(OSeMOSYS),” DIW Discussion Paper, DIW Discussion Paper 1678.

National Bureau of Statistics of China (NBS). 2015. “National Data.” National Data. http://data.stats.gov.cn/english/easyquery.htm?cn=E0103.

National Energy Administration. 2017. “2015年光伏发电相关统计数据 ---国家能源局 .” Accessed July 10. http://www.nea.gov.cn/2016-

02/05/c_135076636.htm.

Key references

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 23 -

NDRC. 2014. “碳排放权交易管理暂行办法 (Interim Measures for the Administration of Carbon Emission Trading).” National Development and

Reform Commission. http://qhs.ndrc.gov.cn/gzdt/201412/t20141212_652035.html.

———. 2015. “Enhanced Actions on Climate Change: China’s Intended Nationally Determined Contributions.” Beijing, China: 中华人民共和国国家发展和改革委员会 (Department of Climate Change, National Development & Reform Commission of China).

http://www4.unfccc.int/ndcregistry/PublishedDocuments/China%20First/China’s%20First%20NDC%20Submission.pdf.

———. 2016. “全国碳排放权交易第三方核查参考指南 (Guidelines for Third Party Verification of the National Carbon Emission Trading).”

National Development and Reform Commission. http://www.ndrc.gov.cn/zcfb/zcfbtz/201601/W020160122366656523188.pdf.

NEA. 2015. “2015年光伏发电相关统计数据---国家能源局.” National Energy Administration. http://www.nea.gov.cn/2016-02/05/c_135076636.htm.

———. 2017. “2016年风电并网运行情况---国家能源局.” National Energy Administration. http://www.nea.gov.cn/2017-01/26/c_136014615.htm.

NEA, and NDRC. 2016. “电力发展‘十三五’规划 - China’s 13th Electricity Development Five Year Plan (2016-2020).” National Energy Agency.

http://www.ndrc.gov.cn/zcfb/zcfbghwb/201612/P020161222570036010274.pdf.

Key references

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 24 -

Noble, Ken. 2012. “OSeMOSYS: The Open Source Energy Modeling System - A Translation into the General Algebraic Modeling System

(GAMS).” Working Paper Series DESA 2012-3-29. Stockholm, Sweden: KTH.

Schröder, Andreas, Friedrich Kunz, Jan Meiss, Roman Mendelevitch, and Christian von Hirschhausen. 2013. “Current and Prospective Costs of

Electricity Generation until 2050.” Berlin: DIW.

Xu, Charlie. 2017. “A New Energy Network: HVDC Development in China.” North American Supergrid. January 2.

http://cleanandsecuregrid.org/2017/01/02/a-new-energy-network-hvdc-development-in-china/.

World Bank. 2017. “China | Data.” World Bank Group. http://data.worldbank.org/country/china.

Key references


Bobby Xiong


March 13, 2018

Design & Features of the Global Energy System Model (GENeSYS-MOD)


Bobby Xiong


March 13, 2018

Layout of GENeSYS-Mod with own additions


Bobby Xiong


March 13, 2018

BAU scenarioLEO scenario

Benchmark

scenario:

100% RES

Specifications

and goal

Restrictions• Only use of renewable energy sources (RES) and excluding nuclear

power in 2050 in the power, transportation and heat sector

• limited CO2 budget

• Goal: To see whether it is possible to fulfill the demand in all sectors

with 100% renewable energy in 2050 by keeping the CO2 emissions

within fixed national budgets of the respective countries and to reach

the 2 ºC goal

Compared scenarios

= Limited Emissions Only

Restrictions:

• Limited CO2 budget (higher than in the 100% RES

scenario)

= Business As Usual

Restrictions:

• Upper limits of RES-Potentials (according to the New

Policies scenario of the IEA)

• No expansion of new nuclear capacities

Scenarios


Bobby Xiong


March 13, 2018

Power

• Current power generation parameters obtained by various sources, i.e. EndCoal (2017), NEA (2015, 2017), Zhang et al. (2015a), IHA

(2017), Löffler et al. (2017).

• Recent demand data (power and low heat) collected from National Bureau of Statistics of China (NBS) official database.

• Future demand data was calculated by distributing forecasts based on regional factors, i.e. GDP, population (growth), interpolation of

historical data, official short term plans (FYP) by the CCCP (2015).

• Grid data mainly collected from State Grid Corporation.

Grid

• Grid data mainly collected from State Grid Corporation of China (SGCC) and Southern Power Grid Company Limited (CSG).

Heat and Transportation

• Heat parameters are taken from Löffler et al. (2017) and mapped on a local resolution by officially available data provided by the NBS

(high heat: steam, low heat: hot water supply).

• Past and present transportation parameters are derived from NBS databases and using the method of least squares based on the past

20 years, linear growth is assumed until the expected population cap by 2035.

Input data


Bobby Xiong


March 13, 2018

China’s power pathway – 100% RES sc.

Solar power accounts for 71% of total power generation in 2050, followed by Wind (15%) and Hydro (11%).

Development of China‘s power in the 100% RES scenario

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March 13, 2018- 30 -

• The share of coal in high heat is substituted by biomass (47%), electrical furnaces (37%) and gas (16%) from power-to-gas utilities.

• From 2015 to 2040, coal consumption for low heat is lowered by 54% and then is almost turned off until 2045. Heat pumps provide 89% of

the low heat generation in 2050.

China’s high heat pathway – 100% RES sc. China’s low heat pathway – 100% RES sc.

0

5000

10000

15000

20000

25000

30000

2015 2020 2025 2030 2035 2040 2045 2050

PJ

Biomass

Renewable Gas

Electric Furnace

Gas

Coal

Development of high and low heat in China‘s 100% RES scenario

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 31 -

• Conventional freight technologies are replaced by H2-fueled trucks, electric rail transport and biofueled ships.

• Passenger transport demand is met by electric rail transport, battery powered vehicles and H2-fueled planes.

China’s freight transport pathway – 100% RES sc. China’s passenger transport pathway – 100% RES sc.

Development of the transportation sector in China‘s 100% RES scenario


Bobby Xiong


March 13, 2018

China’s emissions per energy carrier – 100% RES sc.

• Emissions decline over time, reaching zero emissions in 2050

• Decrease in emissions with big shifts in 2025 and 2045

Development of China‘s emissions in the 100% RES scenario

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 33 -

China’s power pathway – LEO sc. China’s power pathway – BAU sc.

• Conventional energy sources still part of power generation mix in 2050, even though negligible shares

• Coal used throughout the whole time horizon in BAU scenario

• BAU scenario sees comparable results in 2050, however the shift towards renewable sources comes much later

• Both scenarios mostly rely on photovoltaic

Comparison of China‘s LEO and BAU power pathways

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 34 -

China’s high heat pathway – LEO sc. China’s high heat pathway – BAU sc.

• LEO: More biomass is used in the heat sector thus reducing its share in the transportation sector

• BAU: Coal remains most important technology until 2045

• Power-to-heat becomes feasible without the limitations for power generation

Comparison of China‘s LEO and BAU high heat pathways

TU Berlin – WIP

Bobby Xiong


March 13, 2018- 35 -

China’s low heat pathway – LEO sc. China’s low heat pathway – BAU sc.

• LEO: Nearly identical to 100% RES scenario

• BAU: Coal continuosly used in low heat generation until 2050, thus share of heat pumps much smaller

Comparison of China‘s LEO and BAU low heat pathways

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March 13, 2018- 36 -

China’s emissions – LEO sc. China’s emissions – BAU sc.

• LEO: Overall emissions are 25% higher compared to the 100% RES scenario

• BAU: Overall emissions are about 150% higher compared to the 100% RES scenario

• In 2050 emissions of 1.7 Mt

Comparison of China‘s LEO and BAU emissions

Enabling China’s Low-Carbon Energy Transformation · On their pathways to decarbonization, solar...

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