Renewable Energy Policy: China Update Doug Ogden The Energy Foundation 中国可持续能源项目 T h e C h i n a S u s t a i n a b l e E n e r g y P r o g r a m
The China/India Challenge Projected Carbon Dioxide Emissions: Base Case and High Economic Growth Million Metric Tons CO2 10,000 9,000 8,000 United States 7,000 6,000 5,000 China 4,000 3,000 2,000 India 1,000 0 1990 2000 2010 2015 2020 2025 Source: EIA International Energy Outlook 2004
China: Coal Dependence Carbon Emissions from Coal Use 1600 1400 Million metric tons 1200 1000 800 600 400 200 0 2000 2010 2015 2020 2025 China consumes 80% more coal per year than the U.S., and rising. Source: EIA 2004
China: Growing Oil Dependence By 2020, China will import 80%of its oil 16 Oil Use in China Million barrels per day (mbd) 14 12 10 8 6 4 2 0 2000 2025 Source: EIA 2004
Energy Efficiency and Renewable Energy Potential 140 120 100 80 Efficiency 60 40 Fossil 20 Renewable 0 Energy 1988 2000 2010 2030
Role of Government Address failure of markets to recognize public impacts of technologies Intervene to penalize externalities, incentivize beneficial technologies Commercialization policies: guarantee volume, catalyze learning curve
Solutions: Sector Energy Efficiency and Renewable Energy Policies Transportation Buildings and Appliances Industry Electric Utilities Regulatory Policy Renewable Energy
Transportation Fuel Economy (mpg) Standards Vehicle Emissions Standards Regulate CO 2 Cleaner Fuels (lead, sulfur) Alternative Fuels Advanced Vehicle Technologies Hybrid Electric, Fuel Cell R&D Minimum Market Share (ZEV Mandate) Bus Rapid Transit Systems
Fuel Economy Standard Carbon Savings in Vehicle Fleet million tonnes carbon 400 300 200 100 Passenger Vehicles: 60.18 MtC Other Vehicles: 73.1 MtC 0 2000 2005 2010 2015 2020 2025 2030 Total Savings in 2030: 133.28 MtC 960 million barrels
Buildings & Appliances Appliance Standards & Labeling Lighting Refrigerators Air Conditioners Washers TVs Water Heaters Power Supplies Building Energy Codes Severe Cold Cold Severe Cold Cold Moderate Beijin g Cold Chengdu Wuhan Chongqing Hot Summer Cold Winter Hot Summer Warm Winter Severe Cold Nanjing Shanghai
Appliance Efficiency TWh 400 350 300 250 Impact of China's appliance standards a labeling program: efficiency standards and labels for 4 appliances save 9% of all rsidential electricity in 2010 savings from clothes washer and TV standards and labels savings from refrigerator and AC standards and labels thousands of tons 100000 90000 80000 70000 60000 50000 40000 Estimated Carbon Savings from Appliance Standards and Labels Cumulative savings after 10 years Air Conditioners 2 (S) Washing Machine (S) Fluorescent Lamps (S) DVD (L) Copier (L) Fax (L) Monitors (L) Computers (L) Printers (L) Televisions (S&L) 200 net residential electricity consumption 30000 20000 Annual savings in 10 years 150 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10000 0
Industry Equipment Standards Motors, pumps, fans, etc. Energy Efficiency Agreements Carbon-intensive sectors (steel, cement, pulp & paper, petrochemicals)
Electric Power Utility Regulatory Reform Pricing policies; wires charges Demand-Side Management; Integrated Resource Planning
Clean Energy Solutions Gigatons coal equivalent 150 125 100 75 50 25 Business as Usual Low-Carbon Path Buildings Efficiency Industrial Efficiency Vehicle Efficiency Renewables & Gas 0 1990 2000 2010 2020 2030 2040 2050 Source: LBNL
Renewable Energy Goal: Encourage bulk purchases, to drive down costs and speed commercialization. Mandatory Market Share Public Benefits Funds Wind Concessions Distributed Generation
RE Commercialization Policies Indirect Policies for Guaranteeing a RE Market Feed-in tariffs Mandatory market share/ renewable portfolio standard (quota) Government auctions/resource concessions Wires charges Tax incentives/production tax credits Green pricing See Joanna Lewis & Ryan Wiser, Policies to Promote Wind Industry Development, LBNL, 2005
RE Commercialization Policies Direct Policies for Localizing RE Manufacturing Local content requirements Incentives for local content Favorable customs duties Tax incentives Certification & testing programs Research Development & Demonstration See Joanna Lewis & Ryan Wiser, Policies to Promote Wind Industry Development, LBNL, 2005
China s s Current Wind Capacity J. Lewis & R. Wiser, LBNL, 2005
Renewable Energy Law National People s Congress Schedule August 03: NPC tasked NDRC & Tsinghua University; 2 versions Broad stakeholder process June-Dec. 04: NPC consolidated Dec. 04: First reading by NPC April-May 05: Second reading Adoption: 2 nd half 05(?)
Renewable Energy Law National Mandatory Market Share Targets 2010: 5% of primary energy to be RE, including 60 GW RE electricity 2020: 10% primary energy to be RE, including 120 GW RE electricity Includes bulk power, off-grid RE, and bio-fuels
Renewable Energy Law Bulk Power Feed-in tariff (compulsory purchase by utilities of all output) Government tendering policy Mandate for large generators (MMS) Voluntary market permissible Costs spread among all consumers
Renewable Energy Law Economic Incentives National RE Public Benefits Fund Soft loans Tax benefits, including VAT Enforcement Fines to exceed cost of compliance
Renewable Energy Law 120 GW of renewable electricity by 2020 : 79 GW small hydro 20 GW wind 20 GW biomass 1 GW solar PV
RE Law: Wind Growth 0.1 25000 0.09 0.08 Installed MW Cost (cents/kwh) 20000 0.07 0.06 15000 0.05 0.04 10000 0.03 0.02 5000 0.01 0 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Wind Concession Projects 2006-2010 120 MW Xinjiang 200 MW Gansu 100 MW Ningxia 400 MW Inner Mongolia 400 MW Hebei 350 MW Jiangsu 400 MW Jilin 100 MW Liaoning 200 MW Shandong 200 MW Shanghai 400 MW Fujian Total Increase: 3570 MW 100 MW Guangxi 500 MW Guangdong 100 MW Jiangxi
Wind Concession Challenges High (70%) local content requirement Local manufacturing capacity insufficient Resource assessment not sufficient for siting Long approval process; high transaction costs Risk: Investment chilling effect possible if first projects fail
Kyoto Protocol: Developing Country Participation Common but Differentiated Responsibilities OECD New and Additional Financial Resources Clean Development Mechanism: Needs institutional support Needed: In-Country Policy and Capacitybuilding Assistance
Further Information: www.efchina efchina.org www.ef ef.org 中国可持续能源项目 T h e C h i n a S u s t a i n a b l e E n e r g y P r o g r a m