Analysis on China's Future Energy Mix and Oil / Gas Demand Under Low-Carbon Energy Constraints (I)     

By Zhang Kang, Exploration and Production Research Institute, Sinopec Corp.
In recent years, resource and environment constraints have been placed in an increasingly important place in the study of energy strategy. People pay more attention to the impact by greenhouse gas emissions on climate change. Analyzing the prospects of China's low-carbon energy development is necessary to take into consideration the expected science and technology progress and then gives a framework conclusion for several scenarios based on the country's actual conditions.
   Sponsored by the US-based Energy Foundation and the World Wide Fund for Nature, several Chinese agencies led by the Energy Research Institute of the National Development and Reform Commission has fulfilled a study report regarding China's low-carbon development path toward 2050. The first phase of the study includes 14 sub-topics, mainly related basic research, which were officially released in a report named "2050 China Energy and Carbon Emission Report" in July 2009 (CCR2009 No. 29).
   The second phase focuses on specific scenarios of low-carbon future and was published in September 2009 in a report named "The Scenario Analysis of China's 2050 Low Carbon Development: Energy Demand and Carbon Emission" (Scenario Analysis). Although this report still needs to be improved, such scenario model, which combines theoretical expectation and actual situations, could be modified constantly with deepening understanding and the passage of time, enabling the editor to have a clearer picture on what solutions China should take to realize a low-carbon energy.

1. Four scenarios

The Scenario Analysis provides four scenarios regarding China's carbon future. The benchmark scenario assumes China would continue to follow the course of industrialization of developed nations and see improving energy efficiency with technological progress. In this scenario, China's per-head energy consumption in the mid of 21st century would be about 10% lower that of Japan in 2005, which represented the highest energy efficient nation that year. Under this, China's energy consumption would reach 7.8 billion tons of coal equivalent (tce) in 2050, or 3.3 times that of 2007 - something not acceptable. This means it is blocked for China to follow the high per-capita consumption for traditional energy by those European and American nations to realize modernization even if the approach is improved.
   Another one is the energy-saving scenario which takes into account all the energy conservation and emission reduction measures in place but not includes measures specially designed to cope with climate change. In this scenario, energy consumption in 2050 would reach 6.69 billion tce, or 2.4 times that of 2007. Especially, it forecasts coal consumption would be 1.6 times that of 2007 level in 2035 and 1.5 times in 2050, or accounting for 51.5% and 41.1% of total energy consumption in respective year. (Table 1) Such indicators, however, still put heavy pressure on the resource, the environment and the clean use of coal, and lag far behind the expected low carbon dioxide emission. So, this scenario is still not satisfactory.
   The third is the low-carbon scenario, which requires an overall consideration of China's sustainable growth, energy supply security, economic power and the ability in energy conservation and emission reduction. In this scenario, China would change its mode of economic growth and the way of production and consumption, strengthen technological advances, which will basically form a production and lifestyle featuring saving.
   The final one is a strengthened edition of the low-carbon scenario, which would see China further cooperate with global community, developing and developed nations unite to make great breakthrough in key low-carbon technologies, and the wide-scale use of major technologies that save energy and cuts emission discharge.
   If comparing the third and fourth scenarios with results from a research conducted in recent years by the Chinese Academy of Sciences (CAS), China's energy mix for 2050 on low-carbon and strengthened low-carbon scenarios basically match CAS's. But the CAS's results gave higher estimates of overall energy demand because it forecasted a strong role for new energy. For comparison, the Scenario Analysis estimates total energy consumption of 5.02 billion tce in 2050 under the strengthened low-carbon scenario and the CAS put it at 6.6 billion tce. The Scenario Analysis' low-carbon scenario is a probable scenario and the strengthened edition, which needs more effort and huge spending, is still possible to achieve. (Table 2 and 3) Based on the two scenarios, the followings will discuss China's future energy mix and its oil and gas demand against the backdrop of low-carbon restricts.

Table 1 2007-2050 China's primary energy demand and mix under energy-saving scenario
         million tce/%
Year
    Coal    Crude oil    Natural gas    Hydro-power    Nuclear    Subtotal of conventional energy    New Energy    Total
                                                                                                                                      
2007
    1845/69.5    522/19.7    91/3.4    166/6.2    22/0.8    2646/99.6    10/0.4    2656/100
2010
    2119/68.3    608/19.6    126/4.1    189/6.1    24/0.8    3066/98.9    35/1.1    3100/100
2020
    2773/58.1    1116/23.4    290/6.1    331/6.9    160/3.4    4670/97.9    102/2.1    4772/100
2035
    3012/51.5    1451/24.8    472/8.1    383/6.5    303/5.2    5621/96.1    232/4.0    5852/100
2050
    2752/41.1    1779/26.6    667/10    364/5.4    580/8.7    6142/91.8    548/8.2    6690/100
Note: New energy refers to wind and solar power, among others. Figures originally from the Scenario Analysis and calculated and compiled by the author (hereinafter).


Table 2 2007-2050 China's primary energy demand and mix under low-carbon scenario