1

Scenario Analysis for China’sEnergy and Major Industry Sectors

Tsinghua University, ChinaCenter for Clean Air Policy

Dialogue on Future International Actions to Address Global Climate Change

Lima, 12th October, 2005

2

Presentation Outline

• Overview• Sector Analysis and results• Implications of Intensity Targets• Conclusions and Discussions• Appendix

2

3

China’s national energy profile

• Energy demand keeps growing.• Decline of energy demand after middle of 1990s mainly results from

shift of economic structure and enhancement of energy efficiency.• Energy intensity declined all along since 1980s. The amount of energy

consumption has only doubled while China’s gross domestic product (GDP) has quadrupled from 1980-2000.

China's Energy Demand/Energy Intensity

0250500750

100012501500

19851987

19891991

19931995

19971999

2001

Year

Mtce

0

2

4

6

8

Mtce

/Billi

on U

S. $

energy demand energy intensity

Data resource:China Statistical Yearbook 2002

4

China’s national emissions profile• China’s CO2 emissions increase year

by year, so does China’s share of the world fossil fuel CO2 emissions. China ranks the second emitter all over the world. However, per capita emission level is low.

• In 2002, China’s per capita emission of CO2 is only 2.71tCO2, much lower than the world average level of 3.96tCO2.

• China’s CO2 emissions mainly come from combustion of coal. Emissions from natural gas and petroleum account for a relatively small proportion.

• Structure of CO2 emissions is approximately consistent with the structure of primary energy consumption.

Historial CO2 Emission of China

0.0200.0400.0600.0800.0

1,000.01,200.0

1940 1950 1960 1970 1980 1990 2000 2010

CO2 E

miss

ion (M

t-CO2

)

Solid Liquid Gas Cement Total

Data resource: CDIAC,2003

Total Fossil Fuel CO2 EmissionsWorld's Countries Ranked by 2002

0 1000 2000 3000 4000 5000 6000

USAChina

RussiaIndiaJapn

GermanyUK

CanadaKorea

ItalyMex icoFrance

IranAustrilia

South AfricaMtCO2

3

5

Background information on sectors

1.67%7.86%4.25%9.95%8.56%*Share of China’s total energy consumption (2000)

256.65*/1249

Electricity

50.19416.55138.77322.58CO2 Emission (MtCO2)(2000)

Pulp &PaperCementSynthetic AmmoniaIron &SteelTarget Sectors

Data resource: China Statistical Yearbook 2002 ; CCAP,Sector-Based Greenhouse Gas Reduction P

Structure of China's CO2 Emission in 2000

43%

9%

28%

7%

13%0%

Electricity & Heat Industrial Processes Manufacturing & Construction Transportation Other Fuel Combustion International Bunkers

Paper,Pulp:1.54%Synthetic Ammonia:4.25%

Cement:12..404%Iron&Steel:9.88

*Taking no account of the electric supply to other sectors

China's Sectoral CO2 Emissions

0%

20%

40%

60%

80%

100%

Electricity Iron&Steel SystheticAmmonia

Cement Pulp andPaper

share of world share of top 10 developing countries emitters

6

Electricity Sector Characters

• Coal-fired power plants still accounts for the majority of electric power supply.• China has the most abundant hydropower resources in the world, with an estimated potential of 380 gigawatts. Hydropower theoretically could supply much of China’s needs, but suitable rivers are located far from load centers and are heavily laden with silt.

. Data Resource: China Statistical Yearbook 2002; ERI, China’s Sustainable Energy Scenarios 2020

Development of China's Electric Power System

050

100150200250300350400

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 Year

Instal

led C

apac

ity(G

W)

02004006008001000120014001600

Powe

r Gen

eratio

n(TW

h)

Installed Capacity(GW) Power Generation (TWh)

China's Electric Power Generation Structure(2000)1% 0%

2%

76%

18%3%

coal gas oilhydropower nuclear renewables

4

7

100%

-

0.12%

0.66%

24.8%

74.4%

Share of Total

Capacity

-5�15%---1.46 --Renewables

100%1249.11638.4319367.4Total

-10�20%20�30--0.5 375.2 530* (1998)Wind

-25�35%40--16.7 210011 Nuclear

-60�80%50--243.134 79352.2 1209Hydro

0.76 50�60%2.5%31.24 41.1 Oil

0.47 40�58%1.03%12.8627.368 Gas

1.16 35�45%

30

96.5%1205 1038.1

237540 3634

Coal

Average CO2intensity �Mt-

CO2/TWh)

Average efficiency

Average age

�year�

share of total CO2 emissions

CO2emission(Mt)

Generation(TWh)

Capacity (MW)

number of plants (or generator

units

Fuel

Distribution of plants by Fuel in 2000

8

Distribution of coal-fired plants�>6MW� by CO2 intensity in 2000*

32.2 408.33 420.96 76563233<1.05

1220.62

280.96

231.01

300.32

AnnualCO2 (MtCO2)

95.75%

22.0

18.0

23.55

CO2 (% share of sector)

1099.342850965283Total

261.58 658522921.05-1.20

187.34 557814231.20-1.30

229.46 86900 4335>1.30

Total annual generation(Twh)

Total capacity

(MW)

Total number of

plants/units

CO2 Intensity (Mt CO2/TWh)

*There is no such accurate data for this part. We can only provide rough results estimated from existing data.

20021993Year

18.1%58826.5451319.0%225831807<50

6100

513

456

248

344

26

No. of Plants

325705.7

28640.7

54405.5

51310

116923

15600

Total Capacity (MW)

16.7%20.1%23993217100-200

8.8%11.4%1353026750-100

100%100%1190862532total

15.8%27.4%32600162200-300

35.9%19.1%2278073300-600

4.8%3.0%36006>600

of Totalof TotalTotal Capacity (MW)

No. of PlantsUnit Size�MW�

Distribution of coal-fired power plants by capacity ( greater than 6MW )

5

9

Bullets for Electricity Sector• Thermal power plants (fired with coal, petroleum, or natural gas) accounted

for almost three-quarters of China’s installed capacity in 2000. Hydropower provided about 25 percent and nuclear power less than 1 percent of capacity. Oil and natural gas combined accounted for less than 6 percent of total power generation in 2000.

• Nearly all of the sector’s CO2 emissions come from coal-fired generators.

• Unlike some other countries, a significant share of China’s coal-fired generator capacity is at relatively small units. For example, nearly three out of every four such generators is less than 50 MW, and these generators account for about 20% of total electric capacity.

• Over 40 % of China’s CO2 emissions of electricity sector come from relatively inefficient coal-fired plants with CO2 intensities above 1.2 Mt/TWh.

10

Iron&Steel Sector

Data resource:Carbon Dioxide Information Analysis Center, 2003

Development of China's Iron Production

05

101520253035

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

%

0

50

100

150

200

250

Mt

% share of global iron production China's iron production

Development of China's Crude Steel Production

0

5

10

15

20

25

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

%

0

50

100

150

200

250

Mt

% share of global crude steel production China's crude steel production

• Total production and proportion of both iron and steel in the world keep growing all along.

• Pig iron from blast furnace accounts for the majority of total iron. Proportion of direct reduced iron is comparatively small.

• Majority of crude steel is from oxygen blown converters(83%,2002)

6

11

Iron&Steel Sector• Higher energy intensity of per

ton steel( about 1.5 times as Japan)

• Main reasons of higher energy intensity includes: characteristic of production process ,small proportion of advanced equipment, inefficient management.

• Iron/Steel ratio of China is high , although with a decline trend

Iron/Steel Ratio of China and USA

0.2

0.4

0.6

0.8

1

1.2

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

China USA

Source: Japan Iron and Steel Federation*include the energy consumption of iron used as an input as well as that used to make the steel

90

100

110

120

130

140

150

100105

110120

130

150

125

International comparison of energy intensity of iron/steel industry(Index for Japan set at 100*)

Japan Korea EU15 USA ChinaRussialarge average

12

2907068setsOpen-hearth furnace

82.546.533.922.3%Continuous casting ratio

281267176<100setsContinuous casting machineContinuous casting

equipment

24.46.35.34.4tonsAverage Production Capacity per plant

49822128082976220tonsProduction Capacity

204338015611403setsNumberSteel-making electric furnace

35.824.224.223.3tonsAverage Production Capacity per plant

10070717558114911tonsProduction Capacity212297240211setsNumberSteel-

making Oxygen blown

converter

11742.841.237.9kg/tCoal injection per ton iron

611.785.394.4103.2m3Average Production Capacity per plant

147427275397141765116595m3Production Capacity

241322815021130setsNumber

Iron-making blast

furnace

2000199519931990Typical Plants in iron&steel industry

Data resource: China iron&steel statistic . Data of 2000 is only for key iron&steel enterprises

Evolution of Plants in Iron&Steel Sector

7

13

AnnualCO2 *2

(mt)

Total annual production *2

(mt)

Share of total(%)

Total production capacity per year*1 (mt)

Total numberCO2intensity(tCO2/t)

Class of equipment

18.9117.438.6014.230051.085>3000m3

46.5639.8319.6632.5275191.1692000-2999m3

252.85202.622100165.46523211.248Total*3

Blast furnaceFor iron-making 41.4134.14 16.8527.8780 311.2131000-

1999m3

128.0097.7148.2279.7893 1841.310300-999m3

16.3312.326.0810.0594701.326101-299m3

1.641.200.590.9810 121.367 <100m3

-0.05*57.754.146.7760 3-0.006>300t12.72187.20100163.6770 2450.068Total*4

oxygen blown converter for steel-making

1.6054.0628.8847.270039-0.030100-299t4.0752.9228.2746.2710600.07750-99t

7.5211.2635.9012.3900300.66850-99t7.129.7331.0110.7024910.73211-49t0.861.083.431.1830480.802<10t

4.479.3129.6710.2400130.480>100t19.9731.37010034.51541820.637Total*4

Electric furnace for steel-making

0.080.570.310.500020.142<10t7.0271.8938.4062.86001410.09811-49t

Distribution of Plants in key Iron&Steel Enterprise in 2003

*1 Incomplete statistic data for large and medium key enterprises; *2Uncertain data estimated from product capacity by the same proportion *3 By volume *4 By weight *5 negative energy consumption means energy recovery realized by advanced steel-making converter

14

Bullets for Iron&Steel Sector• Iron production is the highest energy-intensity process during iron and steel

production, and accounts for nearly 40% of China’s total CO2 emissions from iron and steel production.

• Blast furnaces between 300-999 m3 accounted for 50.62% of China’s total CO2 emissions from blast furnace in 2003. But average capacity per plant of China’s new blast furnace will above 1000m3

• The CO2 intensity of China’s largest blast furnaces (>3000 m3) is 13.06% lower than average level for all furnaces, but the largest blast furnaces account for only 8.60% of total iron production.

• In the past decade, the average production of China’s iron plants has greatly increased, rising by 617.11% from 1995 to 2000. A similar trend has occurred in steel-making, 47.9% of oxygen blown converter, 287.3% of electric furnace

8

15

Cement Sector• Total output of cement sector

increased from 65Mt in 1978 to 146Mt in 1985, and China’s cement sector ranked No.1 of the world in output statistics.

• Great demand of cement is caused by the building and rebuilding of the infrastructures and city constructions to satisfy the tremendous growth of China’s economic. So cement production keeps growing without any letup.

• Accounted for more than 40% of whole world output in 2002.

• Main sources of CO2 emission from cement sector is fossil fuel combustion, self industrial process and a relative small portion of indirect electrical consumption.

• Average clinker/cement ratio is 0.75

Data resource: Carbon Dioxide Information Analysis Center, 2003; ERI, China’s Sustainable Energy Scenarios 2020

CO2 Emissions in China's Cement Sector

0

100

200

300

400

1990 1991 1992 1993 1994 1995 1996 1997 Year

CO2 E

miss

ions(M

t-CO2

)

Fuel Combustion Electricity-Related Process

Development of China's Cement Production

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.00

19791981

19831985 1987

19891991

19931995

19971999 2001

%

0.0100.0200.0300.0400.0500.0600.0700.0800.0

Mt

% Share of Global Production China's Cement Production

16100%

16.58%

0.79%

0.19%

0.60%

13.91%

1.10%

83.43%

9.00%

16.21%

58.22%

Share of Producti

on

99.9

11912.34%1161Subtotal

rotary kiln

718

5.7

1.4

4.3

7.9

599

64.6

116.4

418.0

Annual Production (MT)

78.5

84.6

120.8

72.5

72.5

36.2

72.5

Unit Investme

nt ( USD/T)

shaft kiln

15

15

20

15

15

15

15

15

15

15

AverageAge (Year)

100%9412Total

0.20.20%19Wet-process Rotary kiln

0.32.11%199Lepol kiln

0.50.91%86kiln operated with off-kiln decomposition

--stand-tube preheating kiln

0.04

0.93%88rotary kiln with waste

heat for power generation

3.70%348rotary kiln with cyclone preheater

0.14.47%421dry process plain kiln

---Other

87.66%8251Subtotal

0.053.69%347ordinary shaft Kiln

0.183.98%7904Mechanical Shaft Kiln

average plantCapacity (MT)Share*1No. of

plants*1

Distribution of China’s Cement Plants in Clinker Production Process

*1 Data in 1995

9

17416.55

76.1

3.84

0.85

2.29

63.06

6.06

340.45

82.84

257.61

total CO2emissions(MTCO2)

748

1229

1435

1117

1896

1596

1154

Energy consumption (Mcal/T)

18.27%Subtotal

rotary kiln

0.6741

0.6085

0.5333

0.6312

0.7669

0.7117

0.6163

CO2Intensity(TCO2/T)*

3

shaft kiln

140

140

140

133

133

98

141

Electricity

consumption

(kWh/T)*2

184

139

87

156

249

218

144

Coal consumption (kgce/T))*2

2.87

2.22

1.81

2.43

3.81

3.4

2.4

Gasoline consump

tion (kg/T)*2

100%Total

0.92%Wet-process Rotary kiln

0.20%Lepol kiln

0.55%kiln operated with

off-kiln decomposition

stand-tube preheating kiln

15.14%

rotary kiln with waste heat for power

generation

rotary kiln with cyclone preheater

1.45%dry process plain kiln

81.73%Subtotal

19.89%ordinary shaft Kiln

61.84%Mechanical Shaft Kiln

Share of CO2 emissions

Parameters of China’s Cement Plants in Clinker Production Process in 2000

*2 data in 1990; *3 including the emission from self industrial process

18

Bullets for Cement Sector

• The cement industry in China is dominated by shaft kilns.

• In 2000, about 8500 shaft kilns account for almost 85% of total cement production. These plants account for over 80% of total cement CO2 emissions.

• Mechanical Shaft Kiln is the largest single source of cement CO2 emissions, accounts for 61.84% of China’s total CO2 emissions from cement.

• Rotary kilns operated with off-kiln decomposition have a very low CO2intensity, but a high unit investment, accounts for 0.6% of production and 0.5% of emissions

• China’s cement sector structure is need to be improved.

10

19

Distribution of Synthetic Ammonia Sector in 1998

Data resource: China Statistical Yearbook 2002 �ERI, China’s Sustainable Energy Scenarios 2020; Xiulian Hu, Kejun Jiang. Evaluation of Technology and Countermeasure for GHG Mitigation in China

Synthetic Ammonia SectorDevelopment of China's Systhetic Ammonia Production

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

%

0.005.0010.0015.0020.0025.0030.0035.0040.00

Mt

% Share of Global Production China's Systhetic Ammonia Production

•To be classified into great, medium and small ammonia enterprises. Separately, output per year of each kind of enterprise is 300 thousand tons, >40 thousand tons and <40 thousand tons

•Although the proportion of small scale enterprises declined gradually, they account for more than 50% of the total production.

•Global average proportion of product made from gas and oil is > 85%, while China’s raw materials for synthetic ammonia are mainly coal and coke.

17.1%5.4056.0%55Medium scale

55.9%17.6790.8%828Small scale

Share of no. Share of production

Total 100%31.63100%912

27.0%8.5553.2%29Large scale

Production (Mt)No.Classification of enterprises

20

Data resource: Carbon Dioxide Information Analysis Center, 2003 ; ERI, China’s Sustainable Energy Scenarios 2020

Pulp and Paper Sector.According to production structure, pulp

for paper enterprises can be classified into three categories: modern large scale plant , integrated pulp plant and other small scale plant. The proportion is separately 10%,45%,45% in 1998Pulp from wood accounts for small

proportion in paper making process.Alkali recovery rate is relatively low. Integrated energy consumption per ton

paper is about 1.5 times to advanced level of the world. Sector structure still needs to be

improved.

Development of China's Pulp and Paper Production

0.002.004.006.008.00

10.0012.0014.0016.00

19791981

19831985

19871989

19911993

19951997

19992001

%

0.00

5.00

10.0015.00

20.00

25.00

30.00

Mt

% Share of Global Production China's Pulp and Paper Production

11

21

Presentation Outline

• Overview• Sector Analysis and results• Implications of Intensity Targets• Conclusions and Discussions• Appendix

22

Descriptions of Ref�PR�PN Scenarios

Will evaluate projected emissions using combination of measures in place before the end of 2030 based on PR scenario, mostly from a sustainable way

New Policy

Will evaluate projected emissions using combination of measures in place before the end of 2005.Taking regards of Report of 16th Party Congress, Tenth Five-Year Plan as well as relative industrial long term development policies and plans.

Recent Policy

Will evaluate projected emissions using the policies in place before 2000Reference

DescriptionsScenarios

12

23

Energy Demand of Scenarios

24

CO2 Emission of Scenarios

13

25

Presentation Outline

• Overview• Sector Analysis and results• Implications of Intensity Targets• Conclusions and Discussions• Appendix

26

Measures of Electricity Sector

109

8

7

6

5

4321

No. Marginal mitigation ost(U.S.Dollar/tCO2)Measures

365.2Solar thermal

210.5Wind power

105.7IGCC (integrated gasification combined-cycle )PFBC (pressurized fluidized bed combustion)

80.9Natural gas

73.2Hydropower

54.5Nuclear power

19.86Supercritical plant

10.5Reconstruction of conventional thermal power

-7.24CFBC (Circulating Fluidized bed combustion)

-15.7Demand side management

14

27

MAC Curve of Electricity Sector

-50

0

50

100

150

200

250

300

350

400

0 20 40 60 80 100 120 140

Cumulative CO2 Emission Avoided in 2020(MMT)

Aver

age

Unit

Cost(

US.$

/tCO2

)

2

1

43

876

5

10

9

28

Intensity analysis of Electricity(2020)

177.37 Billion US.dollarsInitial production cost

1.01 (MtCO2/TWh)Initial CO2 intensity

186.24181.80181.36180.92179.14177.37Production cost (billion US.dollars )

74.5455.8553.4750.7936.190Average cost per ton CO2 reduced ($/t CO2)

2.88%1.92%1.81%1.69%1.18%0.21%Decline of initial CO2 intensity

0.9810.9910.9920.9930.9981.007CO2 intensity(MtCO2/TWh)

119.0079.3274.6269.9048.918.44CO2 reduction (MtCO2)

5%2.5%2.25%2%1%0%Production cost increase (%)

2.191.090.880.43

59.74 US.dollars /per ton CO2Average cost per ton CO2 reduced overall

119.71MtCO2Total CO2 reduction achieved

0.970Cost increase ($/MWh)

7.281total cost from positive cost measures

-0.129No cost measures total saving

7.152Total cost

Incremental Cost (billion US.dollars)

Blue and green parts are analyzed based on MAC curve, have no relationship with the production cost increase rate.

15

29

Measures of Iron&Steel Sector

12

11

10

9

8

7

6

5

4

3

2

1

No. Marginal mitigation cost(U.S.Dollar/tCO2)Measures

333.13More advanced electric furnace for steel-making

154.57More advanced oxygen blown converter for steel-making

133.54Apply direct reduced iron-making process

88.43More advanced direct steel rolling machine

80.20More advanced sinter machine

76.98Apply dry coke quenching

20.76Adjust ratio of iron/steel

13.58More advanced blast furnace with TRT

7.67More advanced coke oven

-9.04Establish energy management center and increase management capacity

-34.19More advanced continuous casting machine

-90.10Increase coal power injection level

30

-150

-100

-50

0

50

100

150

200

250

300

350

400

0 10 20 30 40 50 60

CO2 Emission Avoided ,2020(MMT)

Aver

age

Uni

t Cos

t(U.S

.Dol

lar/t

CO

2)

1

2

4

87

65

3

9

1011

12

MAC Curve of Iron&Steel Sector

16

31

Intensity analysis of Iron&Steel(2020)

152.47 Billion US.dollarsInitial production cost

1.608 (tCO2/ t steel)Initial CO2 intensity

160.09156.28155.90155.52153.99152.47Production cost (billion US.dollars )

78.0760.5157.1153.7931.970Average cost per ton CO2 reduced ($/t CO2)

16.81%*10.88%*10.37%9.79%8.21%0.84%Decline of initial CO2 intensity

1.3381.4331.4411.4511.4761.594CO2 intensity(tCO2/t steel)

97.61*62.97*60.0656.7047.544.87CO2 reduction (MtCO2)

5%*2.5%*2.25%2%1%0%Production cost increase proportion (%)

21.1710.588.474.22

57.11 US.dollars /per ton CO2Average cost per ton CO2 reduced overall

60.06MtCO2Total CO2 reduction achieved

9.530Cost increase per production($/t steel)

3.605total cost from positive cost measures

-0.182No cost measures total saving

3.423Total cost

Incremental Cost (billion US.dollars)

*in scenario analysis, total incremental cost only accounts for 2.25% of total production cost,so the data is estimatedBlue and green parts are analyzed based on MAC curve, have no relationship with the production cost increase rate.

32

Presentation Outline

• Overview• Sector Analysis and results• Implications of Intensity Targets• Conclusions and Discussions• Appendix

17

33

Conclusions

• Tremendous society transformation in current China vs. Challenge to analyzer

• Relative lower-level technologies vs. continuous technology advancement and energy efficiency improvement

• Recent policy scenario vs. New policy scenario

• Carbon emission potential vs. Incremental cost

34

Constraints and Prospects

• Potential constraints and difficulties – Financing– Technology availability– Plant characteristics and disparities– Geographic/regional problems or differences– Ownership pattern– Capacity building

• New international financial institutions • Technology transfer mechanism

– Identification of prior technologies– R&D– Pilot projects– Capacity building: envision of technology strategy, innovation of

technology management system, training for operators

18

35

Discussions

• What is the actual GHG emission reduction potential?• What is the actual cost for GHG emission reduction?

– Emission reduction potential maybe is higher in analysis, because in scenario analysis, we only change the technology structure to reflect the technology substitution, but in real world, there are many constraints not including in model .

– Incremental cost of emission reduction cost maybe is lower because while analyzing technology substitution ,the most determinant is the compare of marginal cost of different technology and “sinking cost” has not been considered.

– Model results uncertainties• Sources:

– Scenario definition– Methodology– Data resource

• Impact on output– Emission reduction potential– Cost– Feasibility

36

Future work

• More sectors in our framework• Integration of Top-down and Bottom-up

methodologies: macroeconomic models for the analysis of the macroeconomic impacts by sector-based options

19

37

Any question, please contact

Environmental Systems Analysis Institute.Department of Environmental Science and Engineering.Tsinghua University. Beijing 100084,P.R.China

Dr. WANG CanE-mail:canwang@tsinghua.edu.cnPhone: (8610)62785610-17

Mr. WANG KeE-mail:wangke02@mails.tsinghua.edu.cnPhone:(8610)62794115

Ms. ZHANG YingE-mail:becky-zhang@mails.tsinghua.edu.cnPhone:(8610)62794115

38

Our Works on Climate Change• Sector-based mitigation options analysis• Top-down economic impact analysis: such as

CGE model• Combination of adaptation measures and

regional sustainable development strategy: such as water resources

• CDM: Market potential analysis, preparation of PDD and methodologies training for related stakeholders

• Initial research on integrated assessment model

20

39

Thank you

40

Presentation Outline

• Overview• Sector Analysis and results• Implications of Intensity Targets• Conclusions and Discussions• Appendix

21

41

GDP�Billion Dollar�

5.5%6.5%7.5%Annual growth ratio7142.094181.19 3095.7 2227.44 1551.5317 1080.7 GDP�billion dollar�

203020202015201020052000year

02000400060008000

100001200014000

1980 1990 2000 2010 2020 2030 2040Year

China's Energy Scenarios 2020(ERI,2003) SRES A1SRES B1 SRES B2National Response Strategy (ADB/Tsinghua,1994) Issues and Options (WB/Jt Study Group,1994)Environmental Considerations (UNEP/NEPA/ERI/Qinghua,1996) ALGAS(GEF/UNDP/ADB/ SSTC,1998)Country Study (USDOE/SSTC/Tsinghua,1999) actualCCAP project

42

Population�Billion�

1.521.451.401.351.311.267Population�Billion�

4.4‰6.5‰7‰Annual growth ratio

68.153.247.9642.9438.8936.1�Urbanization ratio���

203020202015201020052000year

11.21.41.61.8

22.2

1980 1990 2000 2010 2020 2030 2040year

China's Energy Scenarios 2020(ERI 2003) SRES A1 SRES B1

SRES B2 National Response Strategy(ADB/Tsinghua,1994) Issues and Options(WB/Jt Study Group,1994)

Environmental Considerations (UNEP/NEPA/ERI/Tsinghua,1996) ALGAS(GEF/UNDP/ADB/ SSTC,1998) China Country Study(USDOE/SSTC/Qinghua,1999)

Actual CCAP project

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43

Analytical methodology Technology data: energy intensity,

emission intensity, cost etc.

Marginal emission reduction cost of different measures

Energy demand and emission under different scenarios

Other Scenario force-driving: Social, economic, political etc.

Emission reduction potential of each measure and intensity analysis

Macro-economic cost and impact of sector-based option

Integration of macroeconomic model:CGE

Conclusion and policy suggestions

Ongoing Work

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Analytical methodology continuedAccounting approach -- LEAP model (Long Range Energy Alternatives Planning System )

Baselinescenario

Abatementscenario

Total demand

Technology

SectorTechnology

structure

Unit CO2emission

Coefficient ofEnergy

Consumption

Unit cost

Productionvia

technology

Cost curve

Energy demand

Emission curve

Abatementcurve

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45

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Coke Making

Quenching

Sintering

Blast furnace Direct reduced

iron-making Coal Power Injection

Oxygen Blown Converter Electric

Casting

Hot Rolling

Cool Rolling

Production Process during iron&steel Sector

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47

• Oxygen blown converters vs. electric furnace: – although oxygen blown converters are much less CO2-intensive,but they need

pig iron as raw .Iron-making is high energy intensity process. The raw material of electric furnace is waste steel, it can make crude steel from waste steel and only needs few iron. So the total energy intensity is lower than oxygen blown converter.

– In scenario analysis, the share of crude steel made from electric furnace is important.. We often use the ratio of iron/steel to indirectly describe the proportion of electric furnace steel.

– But in China, waste steel is scarce because China is still facing tremendous development, the total stock of steel in current China is smaller. Electricity availability is another constraint.

– In future years, when the steel stock in China is large, there is more waste steel availability, the share of electric furnace in steel making will increase.

• In iron-making process, direct reduced iron-making is another important kind of technology.– It can make iron directly from iron ore and coal and skip the process of coke-

making. It is also high energy-intensity process. So when using the technology of direct reduced iron-making ,the total energy intensity is lower than traditional blast furnace iron-making, that also means the decrease of total energy consumption of steel making. But this kind of technology is expensive and the total production can't satisfy the raw material demand of China's steel making.

– In medium and long term analysis, direct reduced iron-making will play an important role in energy conservation and emission reduction in China's iron&steel industry.

Instructions for Iron&Steel Process