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Challenges to China’s Transition to a Low Carbon Electricity System. Fritz Kahrl, UC Berkeley, E3 Ding Jianhua, E3 Jim Williams, E3 Hu Junfeng, North China Electric Power University. China’s Power Sector is the World’s Largest CO 2 Emitter.
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Challenges to China’s Transition to a Low Carbon Electricity System Fritz Kahrl, UC Berkeley, E3 Ding Jianhua, E3 Jim Williams, E3 Hu Junfeng, North China Electric Power University
China’s Power Sector is the World’s Largest CO2 Emitter Energy-Related CO2 Emissions, Global and Chinese Power Sector Source: IEA, 2009
China has Ambitious Goals for Renewable Generation Capacity 2009 Capacity, Existing and Proposed Targets for Renewable Capacity Sources: 2009 capacity is from CEC (2010). Existing and proposed targets are from Martinot (2010).
An Incomplete Transition Centrally Planned: Coal-fired Generation Serving Industrial Loads Post-Planned: Diverse Generation Sources Serving Diverse Loads Planning Investment Dispatch Pricing Regulation
China’s Electricity System is Relatively Expensive Average 2009 Retail Electricity Prices in China and the U.S., Ranked by Province/State in Ascending Order Sources and Notes: China data are from SERC (2010); U.S. data are from EIA (2010).
Industry Dominates Load Shares of Electricity End Use by Sector, China, 1980-2006 Source: Data are from CEG (2008).
Forecasted Demand Growth in China is still High 2009 Actual and High/Low Forecasted 2020 Electricity Demand, China and U.S. Sources: China “2009 Actual” is from SERC (2010); “2020 – Low Forecast” is from IEA (2009); “2020 – High Forecast” is from Zhang (2009). For the U.S., all data are from EIA (2010).
An Evolutionary Moment for China’s Power Sector • High forecasted growth • Structural shifts in demand • Growing environmental awareness and regulation • Rising wholesale and retail energy prices
Reducing Demand Growth is Key for Reducing Share of Coal Shares of Coal and Non-Coal Generation, 2009 and Low and High Demand Growth Scenarios for 2020
Regional Power Grids in China Western Inner Mongolia Power Grid (WIMPG) State Grid: Northwest, Northeast, North, Central, East Southern Grid: South
Summary • Reforms in planning, investment, dispatch, pricing, and regulation are precondition for power sector decarbonization in China • Without capacity to better manage and allocate costs, will be difficult to meaningfully increase share of renewable generation in China • Progress possible through incremental improvements in institutional planning and regulatory capacity • Soft technology transfer in electricity sector management should be priority area in OECD-China climate policy dialogue