A Double Edged Sword: Energy and Environmental Aspects of Coal Utilization in China

Transcription

1 A Double Edged Sword: Energy and Environmental Aspects of Coal Utilization in China 25 th International Pittsburgh Coal Conference October 1, 2008 Hongjun Zhang, Ph.D., Partner China Group, Business Section 2099 Pennsylvania Avenue, NW Washington, D.C USA # th Floor, West Tower, Twin Twrs, B-12 Jianguomenwai Ave Chaoyang District, Beijing

2 Overview Looking the Numbers and Beyond Overall Energy and Environmental Background for Coal Utilization Coal Utilization: Challenges and Efforts China as an Opportunity 2

3 Looking the Numbers China s GDP and its Growth (100 million RMB) 3

4 Looking the Numbers Total Investment Amount (100 million RMB) 4

5 Looking the Numbers Energy Consumption and Its Growth (10 thousand tons standard coal) 5

6 Beyond the Numbers China is emerging as the factory of the world. This means the large amount of energy consumption from manufacturing. Made in China has been a key feature of many stores and markets globally. The quality of life of Chinese people has substantively improved, despite of significant unbalance among citizens of groups and regions. Such improvement is linked with the increasing demand of energy supply. 6

7 Beyond the Numbers The links between China and the rest of the world have been expanded substantively over the last 20 years. International trade and foreign investment has tied China and many other nations closely. Modern communication technologies have shorten the distance to the world for Chinese citizens. The energy supply and consumption today in China and the world have never linked so closely in the past. 7

8 Beyond the Numbers China s Economic growth and social development has been heavily replied on coal. Coal makes up about 67% of China s total primary energy consumption, 75% of industry fuel, 76% of electricity generation, and 80% of residential energy sources. Meanwhile, a large number of industry sectors rely on coal as raw materials. For example, coal provides 60% of raw materials for China s chemical industry. 8

9 Overall Background China is perhaps facing the most massive and complex challenges on sustainability in the human history. Such challenges extend to many dimensions such as population, resource and energy (including coal), environment, education, economic structure, unbalanced development, political and regulatory systems, as well as international relations. A few examples include 9

10 Background: Poverty A Family in the southwest Mountain Area 10

11 Background: Poverty A Family in the Southwest Mountain Area 11

12 Background: Environment Environmental pollution nationwide, particularly in urban areas, has caused serious consequences to human health. Respiratory and heart diseases related to air pollution, which are significantly attributed from inappropriate use of coal, are one of the leading causes of death in China some 300,000 fatalities each year. 12

13 Background: Environment Day or Night? 13

14 Background: Environment Above the National Flag 14

15 Background: Human Health Crying for a Healthy Environment 15

16 Background: Resource and Energy With about 4% of global GDP, China consumes 37% of world s coal, 30% of iron, 27% of steel and 50% of cement. To generate every dollar of GDP, China uses 3 times more energy as the global average, 4.7 times more than in the U.S., 7.7 times more than in Germany, and 11.5 times more than in Japan. The tremendous waste of resources and energy undermines China s long-term development. 16

17 Background: Resource and Energy Land Degradation 17

18 Background: Resource and Energy 18

19 Coal Utilization: Challenges and Efforts China has very large number of coal mining enterprises. Most of these enterprises run small coal mining facilities with low technologies. China had over 90 thousand coal mining enterprises in middle 1990s. Despite of consolidation efforts by the Chinese government, such number is still close to 13 thousand by the end of

20 Coal Utilization: Challenges and Efforts Coal mining facilities locate in very unbalanced geographical areas. Most of coal mines are in the north China where environmental capacity is very fragile. Coal mining causes serious environmental damages, such as deforestation and water pollution. 20

21 Coal Utilization: Challenges and Efforts Coal mining is perhaps the most dangerous job in China. Each year, over thousand workers die from coal mining accidents. Most of coal mining facilities use out-ofdated technologies. Such technologies have attributed mining safety and environmental problems and waste of resources. Pricing control and other economic mechanisms bring very little incentive for technology improvement. 21

22 Coal Utilization: Challenges and Efforts Coal based power generation generally uses traditional coal combustion technologies, and its efficiency is much lower than the world average. Despite the increasing environmental requirements set forth by the central government, such as coal washing and desulfurization, there are still large number of small power generation facilities without any environmental measures. 22

23 Coal Utilization: Challenges and Efforts In many households, direct burning of coal is still the common way of heating and cooking. Large amount of coal is wasted in the transportation process. Efficiency of coal utilization as industry raw materials is generally low, despite of certain new built facilities may have installed the world class technologies. 23

24 Coal Utilization: Challenges and Efforts Promotion of new technologies is facing bottleneck of investment. For example, after some experiments, the Chinese government cools off efforts on coal-to-liquid. Also for example, reportedly many Chinese power companies cannot obtain sufficient special steel supply from the world market for ultra-supercritical power generation technology. 24

25 Coal Utilization: Challenges and Efforts There are many policy, cultural, technological and economic obstacles that prevent China from more effective utilization of coal and other energy. China is still largely a nation ruled by authority rather than a rule of law society. 牛 (cow) or 半 (half) 25

26 Coal Utilization: Challenges and Efforts The government enforcement capacity are insufficient; and the traditional culture seems not to support effective law implementation. The law and policy making processes are still of limited transparency, though the progresses have been made in the recent years. 26

27 Coal Utilization: Challenges and Efforts Public concern and media coverage involving sustainable development, energy efficiency, and environmental issues have, along with the other issues mentioned, also reached new levels of intensity. An increasing number of Chinese citizens appear to reflect this concern, despite the fact that they are not necessarily victims of environmental contamination. 27

28 Coal Utilization: Challenges and Efforts It appears that Chinese media organizations are given greater freedoms in the environmental arena, in particular, to explore environmental degradation, noncompliance with environmental and energy laws, and other issues. The fast development of modern communication technologies also help the awareness of public on environmental protection and energy efficiency. 28

29 Coal Utilization: Challenges and Efforts That said, environmental and energy efficiency concerns have been a major driving force for the more effective utilization of coal in the recent years. China has set up an aggressive goal of 20% reduction of energy intensity per GDP from 2005 to To achieve this goal, coal utilization is a key area that China must win. 29

30 Coal Utilization: Challenges and Efforts China has prohibited new mines with sulfur over 3%, and restricted new mines with sulfur over 1.5%. New coal based power facilities are required to be installed with desulfurization equipment. Increasing numbers of facilities are equipped with CFBC (Circulating Fluidised Bed Combustion) and PFBC (Pressurised Fluidised Bed Combustion). 30

31 Coal Utilization: Challenges and Efforts IGCC (Integrated Gasification Combined Cycle) has been in the radar scan of Chinese government officials. Majority of Chinese officials believe IGCC is the future for China s coal based power generation. Recently, the National Development and Reform Commission, which is in charge of China s over energy policy, organized a workshop on IGCC, and indicated the interest to promote IGCC. 31

32 Coal Utilization: Challenges and Efforts Chinese government also paid great attention to the international discussions on carbon capture and storage (CCS). The recent discussions in the government and academia circle have showed the increasing interests to CCS, however the substantive efforts will likely linked with international climate negotiations. While it is unlikely China will set up policies promoting CCS, it is possible that China may allow some pilot projects. 32

33 China as an Opportunity With the level of population, economic growth, investment amount, any small step of efforts in China could potentially impact rest of the world. Global sustainable development progress, in particular in certain areas such as carbon reduction, can be made more costeffectively in China. 33

34 China as an Opportunity China s energy production and consumption will continue to grow, despite of efforts on energy efficiency. That said, China perhaps has the largest potential in the world to improve energy efficiency and reduce carbon emission. Chinese government and public at large also recognize that it is China s own interest to improve efficiency and reduce carbon. 34

35 China as an Opportunity China's Carbon Emissions from Coal Use

36 China as an Opportunity Projected Carbon Emissions for the U.S. and China

37 China as an Opportunity 11.5% Electricity Savings from Appliance Standards and Labels from Four Major Appliances by ,200 1,000 Room AC Refrigerator Television Clothes Washers Total 800 TWh

38 China as an Opportunity Potential Carbon Savings from Fuel Economy Standards Passenger Vehicles Other Vehicles Oil Consumption MMT Carbon Source: Energy Foundation 38

39 China as an Opportunity China is no longer an isolated island of the world and it increasingly is engaged with and being engaged by the international community. China s leaders and public at large are gradually recognizing sustainable development are central to furthering its economic growth and human wealthy. 39

40 Thank You 谢谢 40