Opportunities and Challenges in China s Energy Development Energy Efficiency and Conservation

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1 Opportunities and Challenges in China s Energy Development Energy Efficiency and Conservation Energy Efficiency and Conservation Strategies in Japan and Their Implications to China s Future Energy Development Mikiko Kainuma National Institute for Environmental Studies 28, November 2013 Traders Hotel, Singapole

2 Trend of energy efficiency Original Data: IEA (2009) CO2 Emissions from Fuel Combustion - Highlights Energy Intensity (ppp)

3 CO 2 Emissions(GtC) Increase in radiative forcing((w/m 2 ) Lock-in high carbon infrastructure inhibits GHG emissions reduction Whatever pathways are followed, GHG emissions should be reduced to zero in the long run. The more the delay in timing of actions, the more is the amount of reduction needed. Temperature will increase as long as GHG emissions are positive. GHG emissions need to be below zero to decrease temperature. It takes long time. As climate impacts may be irreversible, recovery may not happen even if GHG emissions are decreased. RCP2.6 RCP4.5 RCP6 RCP8.5 CO 2 emissions pathways in four Representative Concentration Pathways (RCPs) used for IPCC 5 th Assessment Report (left) and corresponding increase in radiative forcing (right). (Source: M. Meinshause, 2011) Mikiko Kainuma, NIES

4 Without climate policies, the annual average temperature will increase more than 10 degrees Celsius in some regions in a worst scenario. RCP2.6 The global average surface temperature increase 0.3 to 1.7 in 2100 RCP8.5 The global average surface temperature increase 2.6 to 4.8 in 2100 and about 8 by Average surface temperature change (average between 2081 and 2100) compared to the average temperature between 1986 and Source: Fig. SPM.7 in Summary for Policy Makers, AR5, IPCC AR5

5 Primary energy supply in Japan PJ 25,000 FY2010 FY2012 Share (%) 20,000 Renewables ,000 10,000 5,000 Hydro Nuclear Gas Coal Oil Source: Agency for Natural Resources and Energy, Oct. 2013)

6 Energy Intensity Primary energy supply/gdp (100million Japanese Yen) (GJ/100million Yen) 4,793 GJ/100 million Yen 4,307 GJ/100 million Yen 4,577 GJ/100 million Yen 4,215 GJ/100 million Yen 4,010 GJ/100 million Yen Source: Agency for Natural Resources and Energy, Oct. 2013)

7 CO 2 emissions from energy MtCO consumption in Japan Energy conversion Commercial Residential Transport Industry 0 Source: Agency for Natural Resources and Energy, Oct. 2013)

8 GtCO2 1.6 Kyoto emission (incl. Fgases) excl. Fgases Target & path 2020 target -3.8% to the 2005 level +3.1% to the 1990 level (Abe) -25% to the 1990 level target -80% Data: GIO, NIES

9 Case studies Combination of scenarios and cases Socioeconomic scenario Share of nuclear in 2030 Energy efficiency, Renewables High growth X 0% 15% X Low case Medium case Conservative 20% High case 25%

10 Macro Economic Scenarios High growth scenario The measures in "Rebirth of Japan: a comprehensive strategy" presented by National Policy Unit, Cabinet Secretariat, Japan on 31 July 2012 are steadily implemented, and the average nominal and real growth rates in fiscal year will be about 2.9% and 1.8%, respectively. The rate of increase in consumer price index becomes a plus in fiscal year 2012, and changes stably in a mid- to long- term in about 2% Conservative scenario The average nominal and real growth rates through the fiscal year 2020 will be about 1.5 % and a little over 1%, respectively. The rate of increase in consumer price index becomes a plus in fiscal year 2012, and changes stably in a mid- to long- term in about 1 %

11 Socio-economic scenarios in the high growth scenario GDP (real) trillion Yen (2005) Population 10,000 person Household 10,000 household Floor area million m3 Steel Cement Ethylene million ton million ton million ton Pulp & paper million ton Freight 100 million ton km Passenger 100 million person km year year

12 Socio-economic scenarios in the conservative scenario GDP (real) trillion Yen (2005) Population 10,000 person Household 10,000 household Floor area million m3 Steel Cement Ethylene million ton million ton million ton Pulp & paper million ton Freight 100 million ton km Passenger 100 million person km year year

13 Final energy consumption (million kl) Final energy consumption in the conservative scenario -15% -20% -23% Transport Residential Commercial Industry Low Medium High Energy efficiency & Renewables

14 Final energy consumption (million kl) Primary energy consumption in the conservative scenario Gas Oil Coal Nuclear Renewables High High Medium Medium Medium phase out 0% 50% 0% 15% 15% 20% 25% Energy efficiency & Renewables Share of nuclear

15 CO2 emissions in the conservative scenario Non-energy Energy conv. Transport Residential Commercial Industry High High Medium Medium Medium phase out 0% 50% 0% 15% 15% 20% 25% Energy efficiency & Renewables Share of nuclear

16 Additional investments on energy efficiency and renewables trillion Yen Discount rate = 3% 32 trillion Yen 46 trillion Yen 57 trillion Yen Cumulative investments by trillion Yen 19 trillion Yen 22 trillion Yen 28 trillion Yen 27 trillion Yen 33 trillion Yen Return by energy efficiency by 2020 Return by energy efficiency after 2020 Low Medium High Energy efficiency & Renewables

17 Reduction potential (thousand ton CO 2 ) Reduction potential v.s. additional investment costs in 2030 in high efficient case with short payback period Additional investment costs (yen/tco 2 ) Decrease of illuminance demand High efficient truck High efficient air conditioner (commercial) Improvement of insulation (commercial) PV (residential) Technology improvement of energy intensive industry Geothermal High efficient motor Common technologies in industry Energy efficient vehicle PV (non residential) Biomass/waste power generation Wind power generation High efficient appliance BEMS Small hydro Renewables (10 years) (*1) Transport (5 years) (*1) Commercial (3 years) (*1) Residential (3years) Industry (3/10 years) (payback period) *1: industrial plants, buildings (10 years) Improvement of insulation (residential) High efficient hot water supply (residential) High efficient air conditioner (residential) High efficient lighting (residential) High efficient lighting (commercial) HEMS High efficient hot water supply (commercial)

18 Reduction potential v.s. additional investment costs in 2030 in high efficient case with long payback period Additional investment costs (yen/tco 2 ) Decrease of illuminance demand High efficient truck Common technologies in industry High efficient air conditioner (commercial) High efficient appliance High efficient motor Energy efficient vehicle HEMS Improvement of insulation (commercial) PV (residential) BEBS High efficient hot water supply (Commercial) High efficient lighting (Residential) High efficient lighting (commercial) Geothermal Technology improvement of energy intensive industry PV (non residential) Renewables (12 years) Transport (8 years) Commercial (8 years) (*2) Residential (8years) (*3) Industry (12-15 years) (payback period) *2: residential buildings (17 years) *3: commercial buildings (15 years) Reduction potential (thousand ton CO 2 ) Improvement of insulation (residential) High efficient hot water supply (residential) High efficient air conditioner (residential) Biomass/waste power generation Small hydro Wind power generation

19 List of technologies and management Sector Service Technology Industry Raw material production Reduction of raw materials use per production, Innovative steel production, Innovative cement production, Innovative petrochemical production, Innovative grass production, Industrial CCS General Efficient motor, Heat pump, Fuel switching Nonmanufacturing Energy conservation in agriculture Buildings Lighting Decrease of illuminance demand, natural lighting, Efficient lighting Heating/Cooling Reduction of heating/cooling demand, Efficient air

20 List of technologies and management (Cont d) Sector Service Technology Transport Passenger Reduction of transport demand, Management system of passenger transport Freight Management system of freight transport, Efficient ship, Efficient train, Efficient airplane General Change of transport mode, Efficiency vehicle, Next generation vehicle, Biofuel, EV charge technology Energy conversion Electricity Efficient power plant, Efficient distribution, Renewables, Power plants with CCS, Electricity demand management system, Hydrogen technology

21 GHG emissions (GtCO2e/year) Change in GHG emissions with 10 actions in Asia Reductions by Action1: Urban Transport Action2: Interregional Transport Action3: Resources & Materials Action4: Buildings Action5: Biomass Action6: Energy System Action7: Agriculture and Livestock Action8: Forest & Landuse Others (CH 4 and N 2 O emissions from other than agriculture and livestock Asia (LCS) the world (LCS) the world (Reference) S-6-1:Toshihiko Masui The global emissions will become 1.8 times larger compared to the 2005 level and emissions in Asia will be doubled under the reference scenario. It is feasible to reduce GHG emissions in Asia by 69% by introducing ten actions and Others (CH 4 and N 2 O emissions from other than agriculture and livestock) appropriately compared to the reference scenario in GHG Emissions in

22 Ten Actions towards Low Carbon Asia are proposed Action 1 Urban Transport Structured Compact City Action 2 Interregional Transport Mainstreaming trains and water transportation Action 3 Resources & Materials Smart material use that realizes the full potential of resources Buildings Action 4 Smart buildings that utilize natural systems Action 5 Biomass Local production and local consumption of biomass Action 6 Energy System Low carbon energy system with local resources Action 7 Spread of high yields and low emission agricultural technologies Action 8 Sustainable forest management Action 9 Agriculture & Livestock Forest & Landuse Technology & Finance Technology and finance to facilitate achievement of LCS Governance Action 10 Transparent and Fair Governance that Supports LCS Asia

23 Action 3: Resources & Materials S-6-4: Moriguchi

24 Action 3:Smart Ways to Use Material that Realize the Full Potential of Resources Production that dramatically reduces the use of resources Use of products in ways that extend their lifespan Development of systems for the reuse of resources Lower per capita stock (8 t/cap), the saturation level of France and the UK, would decrease the steel demand in China significantly to the lower level of 0.3 Gt in 2050 Consumption of Iron and steel Source: Mûller and Wang, 2009

25 Concluding remarks Learning-by-doing: Technologies have learning-by-doing effects. The additional cost of reducing CO 2 emissions will fall as the technologies spread. Investment costs: If actions are delayed, learning-by-doing effects may fail to work sufficiently, resulting in higher total investment requirements for achieving a low carbon society (LCS).

26 Concluding remarks (Cont d) Avoid lock-in: There are lock-in effects of infrastructure. Once large capital stock of high carbon infrastructure is built, it would be difficult to switch to low carbon infrastructure before the completion of former s life time. Needs of early action: Future technological development has several uncertainties. If the development of one of the currently dominant technologies falls behind schedule, it will fail to spread as expected and CO 2 emission targets will not be met in time. Early actions will open up new opportunities for the spread of alternative actions toward the LCS should a dominant technology fail in some way.

27 Thank you for your attention

28 Additional Slides

29 中央環境審議会 2013 年以降の対策 施策に関する検討小委員会の検討結果より GHG emissions in 2020 with high growth scenario 温室効果ガス排出量 ( 百万トン CO2) 1,600 1,400 1,200 1, ,261 1,351 1,256 1,420 1,324 1,277 1,228 1,368 1,272 1,204 1,153 1,339 1,244 1,163 1,113 +5% +1% +1% 3% 1% 2% 5% 3% 9% 8% 6% 9% 12% 10% 13% 14% 12% 16% 1,329 1,235 1,149 1,100 1,321 1,221 1,134 1,086 1,303 1,191 1,106 1,060 非エネルギーエネルギー転換部門運輸部門業務部門家庭部門産業部門 0 固低中高定位位位 固低中高定位位位 固低中定位位 高位 固低中高定位位位 固低中高定位位位 固低中高定位位位 0% 0% 15% 20% 25% 35%( 参考 ) %, 0%, 15%, 20%, 25%, 35% : 発電電力量に対する原子力発電の占める割合 固定, 低位, 中位, 高位 : 温暖化対策 施策の強度 29

30 Actions 1 & 2: Transport Action 1: Hierarchically Connected Compact Cities Compact cities with well-connected hierarchical urban centers A seamless and hierarchical transport system Low carbon vehicles with efficient road-traffic systems Hierarchically Connected Compact City Central Business District S-6-5: Hayashi