Energy Conservation Potentials and Cooperation Opportunities in China

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Energy Conservation Potentials and Cooperation
Opportunities in China

SHEN Longhai Director, EMCA 6 December 2006
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Main Contents

• I. High economic growth in China results in
  outstanding energy supply and demand problems
• II. Great potential for energy conservation in
  China
• III. Broad scopes for energy conservation
  cooperation in China.

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I. High economic growth in China results in
outstanding energy supply and demand problems

• Since the adoption of reform and opening up
  policies 20 years ago, China has obtained and
  will continuously to maintain the rapid economic
  growth.
• The annual average GDP growth rate was 9.6
  during 1979-2004
• GDP growth rate in 2005 is 9.9 comparing to the
  previous year
• The expected annual average GDP growth rate
  during the 11th Five Year Plan period (2006-2010)
  is 7.5.

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I. High economic growth in China results in
outstanding energy supply and demand problems

• Along with the rapid economic growth and constant
  improvement of peoples living standard in China,
  the demand for energy also increased sharply,
  which as a result, escalated the energy supply
  and demand problem and result in the tremendous
  pressure on environment.
• In 2005, the total energy consumption was 2.22
  billion tons of coal equivalent (tce), a 9.5
  increase from the previous year and ranked No.2
  worldwide.

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I. High economic growth in China results in
outstanding energy supply and demand problems

• The annual average elastic coefficient of energy
  consumption (ratio between energy consumption
  growth rate and economic growth rate) during the
  10th Five Year Plan period (2001-2005) was 1.04.
  If in the next 15 years, the annual average
  elastic coefficient of energy consumption can be
  controlled at 1.0, the annual energy consumption
  will exceed 5 billion tce in year 2020, which
  will remarkably add unbearable pressure to the
  environment.

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II. Great potential for energy conservation in
China

• Chinese government pays great attention to energy
  conservation, and has prioritised it in its
  energy development strategy. Resource
  conservation is listed as the Basic State policy
  in China and China has for the first time
  promulgated the Medium and Long-term Special Plan
  for Energy Conservation, as well as set a binding
  indicator of a 20 energy intensity reduction in
  the 11th Five Year Plan, and issued a Resolution
  on Strengthening Energy Conservation this year
  aiming at reinforcing energy saving by adopting
  such effective measures.

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II. Great potential for energy conservation in
China

• 1) Energy conservation potentials in China
• From the viewpoint of energy consumption per unit
  of output value in China, energy consumption per
  1 million USD of GDP in year 2000, calculated by
  using the current exchange rate is 1,274 tce, 2.4
  times more than that of worlds average. With an
  annual average energy conservation rate of 3
  from 2003 to 2020, the energy conservation
  potential is expected to reach 1.4 billion tce.
• From the viewpoint of energy utilisation
  efficiency, the current energy utilisation
  efficiency in China is 33, 10 lower than that
  of the international advanced level.

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II. Great potential for energy conservation in
China

• From the viewpoint of energy consumption per unit
  of product in 2000, Chinas energy consumption
  per unit of eight major products, i.e. electric
  power, iron and steel, nonferrous metal,
  petrochemical, building material, chemical, light
  industry and textile industries was on average
  40 higher than that of the international
  advanced level. According to the relevant
  studies, compared with the international advanced
  level of energy consumption per unit of product
  and energy consumption for terminal equipment,
  the current energy conservation potential in
  China is about 300 million tce.

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II. Great potential for energy conservation in
China

• 2)Energy conservation potentials of industries in
  China
• In 2002, energy consumption of industries
  accounted for 68.3 of the total energy
  consumption, and this figure remained around 70
  since year 1990. Therefore, energy conservation
  from industries is the focus.
• In order to implement the Medium and Long-term
  Special Plan for Energy Conservation, China has
  already addressed and started implementing ten
  key energy conservation projects. The energy
  saving target of a total of 240 million tce
  during the 11th Five Year Plan period will be
  realised.

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II. Great potential for energy conservation in
China

• Out of which
• From petroleum saving and substituting project
  during the 11th Five Year Plan period, a total of
  38 million tons of petroleum will be saved or
  substituted by other alternatives
• From upgrading coal-fired industrial boilers
  (kilns) project it is expected during 11th Five
  Year Plan period, the efficiency of coal-fired
  boilers will be raised by 5, with 25 million
  tons of coals saved. The efficiency of coal-fired
  kilns will be raised by 2, with 10 million tons
  of coals saved.

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II. Great potential for energy conservation in
China

• From using exhaust heat and pressure project
  during the 11th Five Year Plan period, 2.66
  million tce will be saved annually through iron
  and steel integrated enterprise practicing coke
  dry quenching (CDQ), power generation through the
  pressure difference in blast furnace, top gas
  pressure recovery turbine (TRT) and recovery and
  reuse of BOF gas install each year 30 sets of
  medium-and-low-temperature exhaust-heat power
  generation equipment in cement production lines
  with a daily yield of 2, 000 tons so as to
  achieve the energy saving target of 3 million tce
  per year through extracting and draining Coal
  Bed Methane in ground mined-out areas, discarded
  mines and gas below the ground surface, to
  realize an annual gas utilisation volume of one
  billion cubic meters, which is equivalent to
  saving 1.35 million tce.

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II. Great potential for energy conservation in
China

• Energy conservation in electrical motors project
  during the 11th Five Year Plan period, to realise
  the increase of 2 of the efficiency of
  electrical motors and save 20 billion
  kilowatt-hours of power per year.
• Environment-friendly lighting project during the
  11th Five Year Plan period, to save 29 billion
  kilowatt-hours of electricity.

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II. Great potential for energy conservation in
China

• 3) Chinas energy conservation potential in
  buildings
• In recent years, the annual completed
  construction area in both rural and urban China
  amounts over 2 billion square meters. By the end
  of 2004, the total existing construction area had
  reached as high as 42 billion square meters in
  rural and urban area, of which 14.9 billion
  square meters are housing construction in urban
  area and among which 9.6 billion square meters
  floor space are residential buildings. By 2020,
  China will finish constructing new buildings with
  a total area of 30 billion square meters.

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II. Great potential for energy conservation in
China

• Energy consumption for buildings in China is
  high. The energy consumption per unit of
  residential building acreage in China is 2 to 3
  times as much as that of developed countries with
  similar climate conditions.
• In 2004, the total area of heat supply by boilers
  in urban Beijing amounted to 173.46 million
  square meters, of which the actual average energy
  consumption of coal-fired boilers per square
  meter floor space is 26.9 kgce, while the figure
  of the areas with the same latitude in Germany is
  only 7 to 8 kgce.

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II. Great potential for energy conservation in
China

• China is tightening efforts in promoting energy
  conservation. The 50 and 65 energy saving
  requirements must be implemented in all new
  buildings (i.e. the system of energy-saving
  designing standard with energy reduction of 50
  and 65 based on the standard in 1980) .
• First is to construct annually over 1.2 billion
  square meters residential buildings and public
  structures in cities and towns by strictly
  following the acceptable energy saving standard
  meanwhile to promote renovation on existent
  buildings for energy conservation, and there are
  currently 16 billion square meters existent
  buildings under such renovation.

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II. Great potential for energy conservation in
China

• Regulations such as National Standard for the
  Operation, Examination and Acceptance for the
  Construction of Energy-saving Project of
  Buildings Designing Standard for Energy-saving
  Residential Buildings and Regulations on
  Management of Energy Saving in Buildings are
  being prepared currently.

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II. Great potential for energy conservation in
China

• Energy saving in buildings is one of the ten key
  energy conservation projects during the 11th
  Five Year Plan period.
• During this period, the 50 energy-saving
  standard must strictly be implemented for
  residential buildings and public structures, and
  few big cities such as Beijing and Tianjin should
  take the lead to implement a 65 energy-saving
  standard. The reform of heating supply system
  will be speeded up and tighten efforts will be
  made in promoting building energy efficiency
  technology and related products with a total of
  100 million tce being saved through the measures
  above.

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II. Great potential for energy conservation in
China

• 4)The combined heat and power (CHP) systems (also
  known as cogeneration) in China
• In 2003, there are altogether 2,121 heat supply
  turbo-generator units with over 6000-kilowatt
  capacity each in China and 43.69 million-kilowatt
  capacity in total, accounting for 15.69 of the
  thermal power generating units of the same
  capacity. Heat efficiency of CHP can be raised by
  30 percent as compared to separated generation.
  Centralized heat supply is 50 more efficient
  than small boilers.

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II. Great potential for energy conservation in
China

• The CHP project is one of the ten key energy
  projects in China during the 11th Five Year Plan
  period.
• During the 11th Five Year Plan period, the focus
  will be on the heat load of heating. Measures to
  be taken are install 300,000-kilowatt highly
  efficient environment-friendly cogeneration units
  mainly in the areas with concentrated heat load
  or with relatively bigger potential for
  development construct back-pressure units,
  mostly thermal power, mainly in the areas
  featuring industrial heat load, according to the
  local conditions first develop centralized heat
  supply in the areas whose heat demand is mainly
  for warming and is relatively small in amount,
  and later develop cogeneration when the
  conditions are available

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II. Great potential for energy conservation in
China

• In medium-sized and small cities, construct,
  mainly based on Circulating Fluidized Bed (CFB),
  combined supply of heat, electricity and gas, and
  distributed cogeneration and combined
  heat-power-cooling supply with clean fuels
  transform existent coal-burning small boilers for
  decentralized heat supply to centralised supply.
• By 2020, coverage of urban centralized heat
  supply will be raised to 40 from the 27 in
  2002 a total of 40 million kilowatts of
  cogeneration units for heating will be added and
  35 million tce saved.

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III. Broad scopes for energy conservation
cooperation in China

• Cooperation scopes for energy conservation in
  China is very broad, including industries,
  building and transportation, with promising
  international cooperation opportunities. In order
  to improve energy utilisation efficiency, China
  needs to further strengthen international
  cooperation. In addition to learn the new concept
  and new system on energy conservation from
  abroad, China needs to develop independently and
  introduce the new technologies and products for
  energy conservation and have multiple financing
  channels for implementing energy saving projects
  so as to realise the set energy conservation
  targets by 2010 and 2020 respectively.

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III. Broad scopes for energy conservation
cooperation in China

• 1) Further promote Sino-German cooperation in
  energy-saving.
• According to my understanding, Germany is a
  country with scarce energy sources, and German
  government pays great attention to energy
  utilisation efficiency with remarkable energy
  saving achievements. According to the statistics
  from BMZ, during 1991 to 2001, GDP in Germany
  increased 16, meanwhile the fossil fuel energy
  consumption was on the decline. Greater
  achievements include combined heat and power,
  development of power generation through renewable
  energy, with which, the average effective
  utilisation efficiency of electricity supply
  department in Germany increased from 39 in 1999
  to 46 at present, and is expected to be further
  improved to 55 by 2020.

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III. Broad scopes for energy conservation
cooperation in China

• Germany also pays great attention to energy
  conservation in buildings, new constructions in
  Germany must be low energy consumption buildings
  up to the set standards. In 2003, German
  Government issued the Renovation Plan for
  Residential Buildings to adopt energy
  conservation technologies for renovating existing
  buildings.
• In addition, the development and utilisation of
  renewable energy in Germany also grow rapidly,
  particularly the wind energy. Germany ranks No. 1
  in the world for the accumulated installed
  capacity for wind energy.

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III. Broad scopes for energy conservation
cooperation in China

• 2) Strengthen Sino-German cooperation on CDM in
  the field of energy saving, particularly in terms
  of methodology and economic additionality of
  energy conservation, as well as energy saving
  projects,and new technologies and products.
• This workshop can be seen as a good opportunity
  for Sino-German cooperation, in particular on CDM
  projects, which will further promote the
  cooperation on energy saving and renewable energy
  between Germany and China and achieve a win-win
  situation, in the meantime contribute to reducing
  emission of GHGs, and improve the regional and
  global environment as a whole.

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Thanks for your attention!