Side-event Chinese Energy Sector s Role in Low Carbon Transition Paul SIMONS Deputy Executive Director International Energy Agency Marrakech China Pavillon, 15 November 2016
The IEA works around the world to support an accelerated clean energy transition that is enabled by real-world SOLUTIONS supported by ANALYSIS and built on DATA
China as an IEA Association country & beyond Sept 2015: opening doors to emerging economies Nov 2015: China became IEA s Association country Chinese Energy Minister attended the IEA Ministerial for the first time IEA Ministers endorsed steps to modernise the IEA Association countries: China, Indonesia and Thailand March 2016: 20 th anniversary of IEA-China relations More engagements and analysis related to China Three-year work programme More personnel exchanges (NEA high-official and secondees), workshops (energy data), visits and meetings Publications: WEO Air quality report (2016), A report on Chinese companies in the sub-saharan power sector (2016), WEO special report on China (2017)
China s Energy Transition Coal has fueled China s massive economic growth especially since the beginning of this century But more attention has been shifted to clean energy within the context of climate change and air pollution China is now moving to a less energy-intensive model for growth Renewables and energy efficiency are now playing a key role in China
Energy demand (Mtoe) GDP (trillion dollars, PPP) A new chapter in China s growth story Total primary Energy energy demand demand in China & GDP in China 49 000 60 3 000 6 000 2 000 3 000 1 000 Energy demand GDP Renewables Nuclear GDP Gas Energy Oil demand Coal 40 20 2000 2010 2020 2030 2040 IEA World Energy Outlook (2015) Along with energy efficiency, structural shifts in China s economy favouring expansion of services, mean less energy is required to generate economic growth
Has China reached a coal peak? Coal Production and Consumption in China 4500 Peak? 4000 3500 Coal consumption in electricity (Mt) 3000 2500 Total Coal Production (Mt) 2000 1500 1000 Total Coal Consumption (Mt) 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: China National Bureau of Statistics As China faces overcapacity across heavy industry, coal consumption in China declined for two consecutive years in 2014 and 2015, featuring structural changes
Coal production overcapacity China s coal production capacity vs. coal consumption in 2015 Recently-built or expanded (including 800Mt of illegal projects) Production halts 1496 Mt 308 Mt Total Production capacity 5.7 Gt 3900 Mt Existing production capacity 2015 Coal consumption 3.965 Gt Source: People s network Coal is one of the main industries facing severe overcapacity, followed by steel, cement and flat glass
New policies underpin a more bullish forecast for renewables Net additions (GW) Renewable electricity capacity growth (GW) in MTRMR s main case 900 800 700 600 500 400 300 200 100 0 13% Others Brazil India China Japan United States MTRMR 2015 Forecast 2014-2020 MTRMR 2016 Forecast 2015-21 EU28 China remains key growth market for renewable capacity, while the United States surpasses the EU for the first time
Mtoe China is an energy efficiency heavyweight Primary energy savings from efficiency gains since 2000 and renewable energy supply in China 400 300 Energy savings 200 100 Renewable energy supply 0 2008 2009 2010 2011 2012 2013 2014 Dramatic progress on energy efficiency saved 350 million tonnes of coal in 2014. Energy savings are as large as China s renewable energy supply.
Energy efficiency is saving CO 2 emissions 3.5 CO 2 emissions savings from efficiency improvements since 2000 in IEA countries and China 3.0 2.5 GtCO 2 2.0 1.5 1.0 IEA countries China 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 In 2015, efficiency gains in IEA and China reduced their combined emissions by 15%.
Concluding remarks Investment flows signal move towards cleaner energy An integrated policy approach is needed, covering market design, CO 2 pricing & system integration, including storage & demand response Policy makers need to heighten their commitments, providing clarity and certainty to investors IEA contributes to the energy transition by its work on renewables, system integration & global clean-energy technology colloboration