coal and china’s choices
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COAL AND CHINA’S CHOICES. Jonathan Sinton China Program Manager International Energy Agency Washington, D.C., 12 January 2011. Coal, long the big story, is now even bigger. 2010 was a big year for Chinese coal imports. China’s coal imports are a small portion of total consumption. - PowerPoint PPT PresentationTRANSCRIPT
© OECD/IEA 2011
COAL AND COAL AND CHINA’S CHOICESCHINA’S CHOICES
Jonathan SintonJonathan SintonChina Program ManagerChina Program ManagerInternational Energy Agency International Energy Agency
Washington, D.C., 12 January 2011Washington, D.C., 12 January 2011
© OECD/IEA 2011
Coal, long the big story, is now even bigger
40
1,656
13 52363
-23
2,101
-500
0
500
1,000
1,500
2,000
2,500
GasCoa
l
Renew
ables
and
Was
te
Nucle
ar
Hydro Oil
Total
Gro
wth
be
twe
en
20
00
an
d 2
00
8 [
TW
h]
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
KTon
China incremental consumption
2008
2009
2010 (*Estimate)
(2010-2008)
US 2009 Consumption
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2010 was a big year for Chinese coal imports
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2.00
4.00
6.00
8.00
10.00
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14.00
16.00
18.00
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
China’s Monthly Coal Imports and Exports(million tonnes)
Imports
Exports
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Tons
China monthly imports
steam coal
coking coal
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China’s coal imports are a small portion of total consumption
Mt coal
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China may have lots of coal, but it’s no longer dirt cheap
0
20
40
60
80
100
120
140
160
180
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220US$/t (6000 kcal/kg net)
McCloskey Asian CIF
NWE Marker MONTHLY CIF
Central Appalachia
Powder River Basin
API#2. 06th Dec 2010
NYMEX QL: CAPP 06-Dec-10
Monthly spot coal pricesQinhuangdao imports CIF
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Center of production moving west Getting deeper Quality an issue Water too Transport very stretched
source: China5E
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Is coal cheaper than the alternatives?
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Longer-term: Longer-term: WEO 2010 WEO 2010 scenariosscenarios Global energy scenarios to 2035 New Policies Scenario is the central scenario in WEO-
2010> assumes cautious implementation of recently announced
commitments & plans, even if yet to be formally adopted > provides benchmark to assess achievements &
limitations of recent developments in climate & energy policy
Current Policies Scenario takes into consideration only those policies that had been formally adopted by mid-2010> equivalent to the Reference Scenario of past Outlooks
The 450 Scenario sets out an energy pathway consistent with the goal of limiting increase in average temperature to 2OC
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0
2 000
4 000
6 000
8 000
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12 000
14 000
16 000
18 000
Mto
e
1980 1990 2000 2010 2020 20302035
World primary energy World primary energy demand by fueldemand by fuelin the New Policies Scenarioin the New Policies Scenario
Fossil fuels maintain a central role in the primary energy mix in the New PoliciesScenario, but their share declines, from 81% in 2008 to 74% in 2035
Other renewables
Biomass
Hydro
Nuclear
Gas
Oil
Coal
WEO-2009 Total:Reference Scenario
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Recent policy commitments, if Recent policy commitments, if implemented, would make a implemented, would make a differencedifference
Global energy use grows by 36% in 2008-2035, with the OECD share of world demand falling from 44% today to 33% in 2035
World primary energy demand by region in the New Policies Scenario
0
2 000
4 000
6 000
8 000
10 000
12 000
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18 000
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Mto
e Rest of world
China
OECD
WEO-2009:Reference Scenario
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Other renewables
Biomass
Hydro
Nuclear
Gas
Oil
Coal
WEO-2009 Total:Reference Scenario 0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
1980 1990 2000 2010 2020 2030
Mto
e
2035
China primary energy China primary energy demand by fuel in the New demand by fuel in the New Policies ScenarioPolicies Scenario
Total primary energy demand in China grows at 2.1% per year on average in 2008-2035, an overall increase of 75%
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The power and industry The power and industry sectors remainsectors remainkey drivers of global coal key drivers of global coal demanddemand
- 750- 500- 250 0 250 500 750 1 0001 250
Other*
Coal-to-liquids
Industry
Power generation
Mtce
OECD
China
India
Indonesia
Other non-OECD
Change in primary coal demand by sector and region in New Policies Scenario, 2008-2035
Demand in power generation accounts for almost 60% of the increase in global coal demand, while another 30% of the demand growth comes from the industry sector
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Coal remains the backbone of Coal remains the backbone of global electricity generationglobal electricity generation
A drop in coal-fired generation in the OECD is offset by big increases elsewhere, especially China, where 600 GW of new capacity exceeds the current coal-fired capacity of the US, EU & Japan
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4 000
6 000
8 000
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1990 2000 2010 2020 2030 2035
TW
h China
India
Other non-OECD
OECD
Coal-fired electricity generation by region in the New Policies Scenario
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The 450 Scenario:The 450 Scenario: A A roadmap from 3.5 roadmap from 3.5C to 2C to 2C C
The 450 Scenario sets out an energy pathway consistent with limiting the increase in temperature to 2C
Assumes vigorous implementation of Copenhagen Accord pledges to 2020 & much stronger action thereafter
The failure of the Copenhagen Accord pledges: > As many lack transparency, there is 3.9 Gt of
uncertainty over the level of abatement pledged to 2020
> As many lack ambition, the cost of achieving the 2 C goal has increased by $1 trillion in 2010-2030 compared with WEO-2009
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The 450 Scenario: The 450 Scenario: Abatement by technology Abatement by technology
In moving from the New Policies Scenario to the 450 Scenario, more expensive abatement options such as CCS play a growing role
World energy-related CO2 emission savings by technology in the 450 Scenario relative to the New
Policies Scenario
20
25
30
35
40
45
2008 2015 2020 2025 2030 2035
Gt
Efficiency 50%
Renewables 18%
Biofuels 4%
Nuclear 9%
CCS 20%
Share of cumulative abatement
between 2010-2035
42.6 Gt
35.4 Gt
21.7 Gt
Current Policies Scenario
450 Scenario
New Policies Scenario
13.7 Gt
7.1 Gt
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China abatement in the 450 China abatement in the 450 Scenario Scenario
In moving from the New Policies Scenario to the 450 Scenario, China starts to rely more on CCS as room for further abatement from lower-cost
options becomes limited
China energy-related CO2 emission savings in the 450 Scenario
relative to the New Policies Scenario
Efficiency 50%
Renewables 18%
Biofuels 1%
Nuclear 8%
CCS 23%
Share of cumulative abatement
between 2010-2035
12.6 Gt
5.2 Gt
5.0 Gt
4
5
6
7
8
9
10
11
12
13
2008 2015 2020 2025 2030 2035
Gt
Current PoliciesScenario
450 Scenario
10.1 Gt
2.4 GtNew Policies
Scenario
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Low-carbon technologies account for 78% of China’s power generation by 2035 in the 450 Scenario, up from 19% today
Share of China electricity generation by type and scenario
Additional low-carbon generationin 450 Scenario
Low-carbon generation in the NPS
Fossil-fuel fired generation
0%
20%
40%
60%
80%
100%
2010 2015 2020 2025 2030 2035
in the 450 Scenario
Power generation in China Power generation in China in the 450 Scenario in the 450 Scenario
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Bigger and more efficient Bigger and more efficient power plants in non-OECDpower plants in non-OECD
The average efficiency of coal-fired generation plants in the non-OECD countries risesfrom 33% in 2008 to 40% by 2035
0%
20%
40%
60%
80%
100%
2008 2020 2035 2008 2020 2035
OECD Non-OECD
Sh
are
of
coal genera
tion
25%
29%
33%
37%
41%
45%
Effi
ciency Coal with CCS
IGCC
Ultrasupercritical
Supercritical
Subcritical
Average efficiency(right axis)
Coal-fired electricity generation by technology and region in the New Policies Scenario
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WEO 2010 WEO 2010 Implications for ChinaImplications for China
China's role in global energy is set to expand further & its policies will have major implications for global energy trends & prospects for limiting climate change
A greater role for gas in China could contribute greatly to reducing CO2 emissions
China's role as leader in manufacturing, deploying—and increasingly in developing—low-carbon technologies can drive down costs, to the benefits of all countries
Growing interconnectedness & China's increasing weight in the energy market links its energy security to global energy security
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Courtesy: IEA Clean Coal Centre
Typical, old 200 MWe plant in China
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Huaneng Qinbei Power Plant 2x600MWe SC Huaneng Yuhuan Power Plant 2x1000MWe USC
Shanghai Waigaoqiao Power Plant 2x900MWe SC + 2x1000MWe USC
Shandong Zouxian Power Plant 2x600MWe + 2x1000MWe
Selection of supercritical (SC) and ultra-supercritical (USC) power plants constructed in China over the past decade