China’s  Future  Wind  Energy  Development  and  its  environmental  benefits    

Wei  Peng  1st  Year  STEP  PhD  

4/10/2012  

Outline  

Ê Background    -China’s current energy system and wind energy potential

-China wind energy development status quo and prospect

-The potential environmental benefits from wind energy development

Ê   Research  questions  and  methodology  Phase 1: Wind integration scenarios, develop the basic methodology

Phase 2: More policy scenarios

Outlook  for  energy  demand  in  China  

Year   Energy  consumption       Electric  power  demand  

2010   3.25btce  (2.28  btoe)   4,190  TWh  

2020   4.5-‐5.0  btce  (3.15-‐3.50  btoe)   8,000TWh  

2030   5.5-‐6.0  btce  (3.85-‐4.20  btce)   10,000  TWh  

2050   6.5  btce  (4.55  btoe)   13,000  TWh  

Source:  ERI  China  wind  energy  development  roadmap  2050                                    Xinhua  News  Agency  

CO2  Emission  Projection  

Projection:  2020:  9000  mt  2030:  11,500  mt  

China’s  low  carbon  energy  strategy  

Ê   2009:  by  2020  non-‐fossil  fuel  sources  contributes  15%  in  total  primary  energy  consumption  (9.4%,  2011;  8.3%,  2010)  

Ê  “12th  Five-‐Year-‐Plan  (2011-‐2015)”:  Three  binding  targets  

§  Non-‐fossil  fuels  in  energy  consumption  increases  to  11.4%  in  2015    

§  Energy  consumption  per  unit  GDP  reduce  by  16%  

§  CO2  emission  per  unit  GDP  reduce  by  17%    

China’s  current  electricity  generation  capacity  

Fig.  Existing  Chinese  grid-‐connected  generation  capacity,  in  GW,  2010  (Source:  CEC)      

Wind  resource  potential  

Fig.  Distribution  of  land-‐based  wind  resource  potential    (China  Meteorology  Administration)  

1.  Wind  Resource  Potential  (Grade  3  or  above:  Wind  power  density>=300W/m2):                  àOnshore  (70m)  2-‐3.4  TW;  Offshore  (depth  5-‐25m,  100m  height)  0.5TW  2.      Under  current  technology,  wind  power  capacity:  1  Tw  

Potential  for  wind-‐generated  electricity    

Fig.  Potential  electricity   irrespective  of   price   that   could   be   generated  over   seven   electric   grid   areas   of  China  mainland.      

-‐Annual  electricity  production  potential:  24,700  TWh  -‐Contract  price  0.516  RMB/kWh:  6,960  TWh    

Source:  M.  McElroy(2009)    

China  wind  energy  development  status  quo  and  prospect  

Fast  Expanding  wind  power  uses  

u  From  2006-‐2010,  China’s  total  wind  power  installed  capacity  doubled  each  year.  

u   By  the  end  of  2010:  

 

 

Total  installed  capacity     41GW     Rank  1st  in  the  world  

Operational  capacity     31GW  

Electricity  generation   50  Twh   1.28%  of  consumption  

 

 

Renewable  energy  law  (REL)   Amendment  to  REL  

Environmental  benefits  to  be  expected  from  more  wind  generated  electricity  

Table.  Anthropogenic  emissions  in  China  in  the  year  2006  (unit:  Gg/year)  

Source:  Q  Zhang  et  al  (2009)  

Costs  difference  between  electricity  generated  from  coal  power  and  wind  power  

Ê   Current  onshore  wind  power  costs:  CNY  0.35-‐0.50/kWh,  feed-‐in  tariff  :  CNY  0.51-‐0.61/kWh  (0.20-‐0.25  higher  than  coal  power  tariff)  

 -‐  If  wind  power’s  benefits  in  terms  of  providing  an  alternative  resource  and  protecting  the  environment  are  taken  into  account,  the  wind  power  costs  should  be  similar  to  coal  power  costs.  

Ê   Future:  Decreasing  wind  power  generation  costs  and  higher  thermal  power  prices  

-‐After  2020,  Wind  power  costs  and  prices  will  tend  to  match  those  of  thermal  power,  with  lower  tariff.  (even  without  fossil  fuel  energy  resource  taxes/  environmental  taxes,  carbon  taxes)  

Note:  the  above  analyses  do  not  include  incremental  costs  of  wind  power  in  grid  connection,  integration  and  long-‐distance  transmission,  0.05-‐0.30/kWh)  

Source:  ERI  Roadmap(2011)  

Vision  for  Wind  Power  Deployment  

2010   2020   2030   2050  

Total  installed  generation  capacity   3.1%   11%   15%   26%  

Total  electricity  production   1.28%   5%   8.4%   17%  

Cumulative  installed  capacity   40GW   >200GW   >400GW   1Tw  

Table.  Strategic  objectives  for  wind  power  development  in  China    

2020   2030   2050  

Energy  replacement  by  wind  power  (mtce)   130   260   660  

Annual  CO2  reduction  (Mt)   300  (3.3%)   600  (5.2%)   1500  

Annual  SO2  reduction  (Mt)   1.1   2.2   5.6  

Table.  Expected  energy  and  environmental  benefits  

Note:  Taking  into  account  improved  thermal  power  technology  and    lower  coal  consumption  per  kWh  of  power    

Fig.  Wind  Power    distribution  in  China  

Fig.  Targeted  installed  capacity  and  electricity  share  of  wind    power,  2010-‐2050  

Fig.  CO2  reduction  potential    of  wind  power  development  

Existing  Problems  -‐Intermittent  characteristic  of  wind  energy  

Grid  Connection  Bottleneck  

Excess  local  power  supply  

Large  Scale  wind  power  

curtailment  

North   Northeast   Total    

Wind  Electricity  Production     42%   31%  

Wind  energy  Curtailed   57.2%   38%   5.5%(2.76Twh)  

Table.  Disproportional  high  level  of  curtailment  in  northern  China  (Jan-‐Jun,  2010)    

Fig.  Basic  scenario:    A  typical  24-‐hour  electricity    dispatch  for  Texas  2030    with  significant  wind  penetration  

Fig.  Double  wind  scenario:    An  example  of  the  impact  of  excess    Wind  on  electricity  dispatch  

Effect  of  intermittent  wind  energy  on  system  stability    

Future  Challenges  for  large-‐scale  wind  energy  integration  

u   Flexible  generation  and  storage  

1.   Flexible  generation  

2.  Challenges  of  nationwide  dispatch  

u   Demand-‐side  management  and  storage  

1.  Demand-‐side  management  

2.   Electricity  Storage  

 

Flexible  generation  

Advantage   Disadvantage  

Coal-‐fired  plant  

2/3  of  total  installed  power   Less  flexible  due  to  longer  start-‐up/shut  down  times;  Lower  efficiency  and  higher  emission  factor  at  partial  load;  Smaller  plants  become  scarce.  

Natural  gas  plants  

Most  flexible  option,  esp.  combined-‐cycle  gas  turbine  

Less  than  1%  of  total  electricity  is  generated  from  NG  

Hydro  power  plants  

Optimum  options:  start  up/shut  down  quickly,  no  major  impact  on  equipment’s  service  life;  can  operate  at  relatively  low  minimum  load  

Seasonal  variation;  Geographic  mismatch  of  wind  and  hydro  power;  Little  spare  hydro  capacity  left  to  mitigate  increased  net  variability  in  the  power  system    

Research  Questions:  

u   Phase  1  (Technical  barriers):    -‐  What  will  be  environmental  benefits  of  China’s  wind  energy  development,  

based  on  the  strategic  targets?  

-‐   Which  is  more  cost-‐effective:  clean  coal  technology  or  wind  energy  deployment?    

u Phase  2:  (Policy  concerns)  

Policy  scenarios  that  will  impact  the  costs  and  benefits:  

1.    National  dispatch:  division  of  grid  management;  electricity  trading;  preferential  dispatch  

2.   Demand-‐side  management:  Electricity  pricing    

3.    Subsidy  policy  

Phase  1:  Methodology  

Step  1  • Projected  emission  inventory  with  different  levels  of  wind  power  penetration  and  coal  technology  improvement  

Step  2  • WRF-‐Chem  to  model  the  CO2  and  other  air  pollutants’  concentration  

Step  3  

• Environmental  Benefits:    CO2  abatement:  Carbon  price  SO2,  NOx,  PM  reduction:  Health  benefits  

Step  4  • Cost-‐benefit  analysis,  internalizing/  not  internalizing  the  environmental  benefits    

Step  1:  Emission  inventory  

Ê   Baseline:  2006  emission  inventory  

Source:  Q.Zhang  et  al.  Asian  emissions  in  2006  for  the  NASA  INTEX-‐B  mission.  Atmos.  Chem.Phys,  9,5131-‐5153,2009  

Ê  4  Scenarios  

(More  Roadmaps  by  ERI)  

Scenarios:  

Electricity  from  coal  (%)  

Electricity  from  wind  (%)  

Other  resources  

Scenario  1(BAU)   2010  level   2010  level  

Holding  constant:  Projection?  Roadmap?  

Scenario  2    (Clean  coal  tech)  

2010  level,  clean  tech   2010  level  

Scenario  3    (Wind  energy  development)  

No  clean  tech   Targeted  level      

Scenario  4  (wind  energy  development  +  clean  coal)  

Clean  tech   Targeted  level  

Step  1:  Emission  inventory  

Challenge:    

-‐Develop  future  emission  inventory  with  targeted  wind  electricity  share  

1.   Understand  the  assumptions  of    projected  future  emission  inventory  

2.   Understand  the  assumptions  to  set  the  future  targets  of  wind  penetration  (ERI,  Roadmap  2011)  

 

Step  1:  Emission  inventory  

3.      Location  of  coal  power  plants  to  be  replaced,  newly-‐built  wind  power  plants,  and  hydro  power  plant  as  balancing  capacity.  

 Table.  Wind  power  development  targets  and  distribution  (GW),  Source:  ERI  Roadmap  

Step  1:  Emission  inventory  

3.      Location  of  coal  power  plants  to  be  replaced,  newly-‐built  wind  power  plants,  and  hydro  power  plant  as  balancing  capacity.  

a.  Two  ways  to  view  firming  capacity  [the  flexible  capacity  needed  to  make  a  system  reliable]:    resource-‐level  view  and  system-‐level  view  

b.  Major  assumption:  grid  connection  and  management,  and  government’s  plan  

Step  1:  Emission  inventory  

4.      The  emission  factor  of  CO2  and  air  pollutants  for  coal  power  plants:    

•   Higher:  run  partial  load  to  balance  variable  wind  electricity  supply;    

•   Lower:  stringent  standard  and  enhanced  clean  coal  technology  

Technology  renewal  and  average  emission  factors  for  coal-‐fired  power  plants  

Bar:  share  of  power  units  with  different  sizes;  Line:  trends  of  average  emission  factor                                                                              Source:  Q.  Zhang  et  al  (2009)  

Phase  2:  More  policy  issues  

u Challenge  of  national  dispatch  

u   Demand-‐side  management  

u   Subsidy  à  Policy  scenarios  that  will  change  the  wind  penetration  level  at  different  regions  

à   Change  the  wind-‐penetrated  emission  inventory  

à   Change  CO2  and  air  pollutants’  concentration  

à   New  costs-‐benefits  analysis  

Challenges  of  national  dispatch  u   Division  of  grid  management  

-‐3  independent  grid  companies,  responsible  for  its  own  profits  and  lossà  Little  incentive  for  inter-‐company  co-‐operation  

u  Electricity  trading  market  

-‐Fixed  price  and  limited  trade  amount  

•  80%  of  electricity  trading  between  regions  and  provinces  is  governed  by  long-‐term  contracts  (Quantity  and  price);    

•  Small  portion  of  electricity  can  be  traded  in  spot  market  (14%  of  total  generation,  2009);    

•  Takes  place  on  yearly  agreements  among  provinces  

u   Preferential  Dispatch    

Demand-‐side  management    

u   Planning,  implementing,  and  monitoring  of  utility  activities  designed  to  encourage  consumers  to  modify  patterns  of  electricity  usage.  (Electricity  consumption  in  2009,  Industry  73.1%  and  residential  12.5%)  

u   Electricity  pricing:  flexibility  is  needed    

Subsidy    

Existing  Subsidies:  

1.  2006:  Region-‐specific  feed-‐in-‐tariff  

2.  Renewable  energy  surcharge  on  end-‐user    

3.  Depending  on  the  distance  between  power  transmission  lines  and  wind  farms,  subsidies  of  CNY  0.01-‐0.03/kWh  will  be  awarded.  

Subsidy  

Projections:  

“Assuming  comparable  costs  for  land-‐based  wind  and  coal  by  2020  and  a  continuation  of  current  policies”:    

 -‐Feed-‐in-‐tariff  subsidies:  Peak  at  2015  -‐Total  wind  power  tariff  subsidies  will  reach    CNY  210  billion.  -‐After  2020,  only  subsidies  required  will  be  for  offshore  wind  tariffs.