UCL Energy Institute

IMPLICATIONS OF WIDER AVAILABILITY OF UNCONVENTIONAL GAS ON CHINA

ENERGY SYSTEM UNDER CLIMATE CONSTRAINT SCENARIOS.

Dr Gabrial Anandarajah

UCL Energy Institute, University College Londong.anandarajah@ucl.ac.uk

www.ucl.ac.uk/energy

Content

• Introduction• TIAM-UCL Global Energy System Model• Scenario definitions• Results• Conclusions

Introduction

• This study develops scenarios under two different state of the world to analyze implications of unconventional gas on China energy system– With wider availability of unconventional gas. – With limited availability of unconventional

• A multi-region global energy system model (TIAM-UCL) has been used to develop the scenarios

16 Region TIAM-UCL Global Model: Overview

• TMES Integrated Assessment Model (TIAM) • Dynamic partial equilibrium model approach with objective

function minimising global welfare costs (consumer surplus + producer surplus)• Annualised capital costs, O&M costs, fuel costs, taxes/subsidies,

salvage values

• Technologically detailed bottom-up whole energy system model

• 16 regions, including explicit China region• Flexible time horizon through to 2100• Multi-emissions, plus reduced-form climate module

Reference energy system – Example

Domestic Demands

Lighting

Space Heat

Cooking

End-useDevices

Elec

Gas

Coal

Oil

ConversionandProcesstechnologyoptions

Coal

Nuclear

Gas

Renew.

Primary Supply

IND

US

TR

YT

RA

NS

PO

RT

Primary Sources

Production/Extraction Treatment/ Transport Energy Conversion Technologies

Fuels and Energy Carriers DistributionCO2, Pollutants and Waste Treatment

NUCLEARD-lithium

magnetic inertial

LWR III

HTGR III

LWR III+

HTGR IV FBR IV

run of river

mini hydro

pumping

onshore

offshore

hydro

wind

GTCC

dam

wave plant

ethanol

reforming

hydroth. liquef.

tidal

PFBCPCST SCST AFBC IGFCUCST

syngas

synfuels

COALcoal

fischer tropsch

DME product.

ethanol prod.

geo

wave

otec

solar

extract.

IGCC

H2O thermolysis

photolysis

H2 bioprod.

thermolysis

RENEWABLES

gasification

Energy End Use

CAR dme+20%eff 2 dst+10-20%eff 3 elc e95 ethdme fc gas+10-20%eff 3 hH2fc MeH2 storhH2fc gas stor hH2 ICE liq storH2/gsl/dsl/hybr 3lpg/nga 23w dst/eth/gas 3m.cycle eth/gas 2

AIRCRAFTgas/H2/ker 10km 3 ker 11kmint. ker/H2 10km 3 int. ker 11kmTRAIN freight dst/elc 2 passeng dst/elc 2SHIP dst/gas/eth 3 int. dst/fc//hfo 3BUS dst/gas/eth/met 4 elc/H2fc/lpg/nga 4 hybr dst/nga/H2 3mini dst/gas/eth 3 mini lpg/nga 3

TRUCKdme/dst/gas/eth 4 lpg/met/nga 3 mid dst/gas/eth 3 mid lpg/nga/H2 3mid H2fc gas stor mid dst hybrid SUV +LCV dme+20%eff 2dst+10-20%eff 3e95 eth dme fcgas+10-20%eff 3 H2fc MeH2 stor H2fc gas stor H2 comb liq storH2/dsl/gsl hybr 3 nga/lpg 2

BLAST FURNACEBlast furnace 2 Bl furn. coal CCS 2Basic O2 furnace Bl. furn slagFURNACESElc arc driElc arc scrapDri midrex H2Dri midrex gas CCS2Ppen hearth COKE OVENSBeehive Dry quenchingConventional Non-recov BIO IND PROCESS BagasseInd waste prodMunicipal biomBiom to biofuelsFuelwoodWastes&residuesStrawForest biom recovPlantation 2Cellul biomassProcess heat 6Other final use 8PROCESS HEAT 6ELECTROLYSIS 4

Fuel decarbon 2

Fluegas sep 3

CO2 transp 2

Fluegas treatm 6

On/off EOR/EGR

On/offs aquifer

CO2 storage

Waste treatm 3

Waste treatm 8

Waste recycl 5

Waste disp 3

CTL fischer tropsch

CHPDGen

HYDROGEN DISTRIBUTIONSTORAGE

electrolysis 4

ENERGYSTORAGE

Waste treatm

heat

Partic. control 3

DeNOx 4

DeSOx 3

CO2 capture

HEAT DISTRIBUTIONNETWORK

ELECTRICITY DISTRIBUTIONGRID

electricity

ALUMINIUM Hall-Heroult cell Inert anode cell Soderberg cellSecondary AlAluminaAMMONIACoal/oil pox CCS4Nga reform CCS2CEMENTBlast furnace Fly ash prod Portl dry kiln CCS2Portl wet kilnPortl clink, v kilnPortl preparationProcess heat kiln 6CHEMICAL Eth to ethyl dehydrDme to olefinsEthane crackerNaft/hfo/lpg crack 3Meth. to olefinsPropyl to ethyl CHLORINEDiaphr. cellMembrane cellHg cellIRON&STEELCold rol steelHot roll steelSteel cont cast Steel ingot castPelletiz. iron oreSinter. iron ore

IND MACH. DRIVENon-Fe met 5Chem ind 7Food&beverage 7Textile 7Machinery 5Non met mineral 5Pulp&paper 5Iron&steel 5Other energy use ElectrificationPULPChem cont digestChem batch digestMechan prodOther prodChem pulp&paperWaste paper to pulpPAPERConv prodCond belt dryImpulse dryingSteam boiler 4IND BOILERS5/100MW 6BOILER SAVINGInsulation 7 Steam trap 7Excess air reduc 7 Econ preheating 7 Return condens. 7 Blowdown 7 Vap recompr. 7Vent condenser 7 Coal loss reduc 7

RE

SID

. C

OM

ME

RC

IAL

COOLINGChiller 4Heat pump 7Central 4Room 2Solar absorpt.Cooking 11HEATINGBoiler 7Burner 4Heat pump 3Heat exchang 2Insulation 4Stove 3Heater 5Solar heater

WATER HEATINGWater heater 11Solar water heaterHeat pump 2LIGHTINGFluo compact FluorescentHalogenIncandescentKer lampLight diode

ELC APPLIANCES Copy print fax 5PCs server 5Refrigerator 5Fans 5Cloth driers 5Cloth washer 6Dish washer 6Freezer 5Home entert 5Home office 5Elc equipment 5RESID CHP 11

INT

ER

SE

CT

OR

AL

ELC DEVICESMotorsTransformers Generators AlternatorsInverters ConvertersSwitchs TH. DEVICESBoilers BurnersHeaters Heat exchanger Driers

Steam generatorsHeat pumps Ovens FurnacesSolar panelsFLUID DEVICESPumpsCompressorsVentilationsGas turbines Steam turbinesHydro turbinesReversible turbines

COMB ENGINESGasol engines Diesel engines Gas engines Turbo engines Stirling engines STORAGE DEVICES Batteries

light endsgas

naphtha

mid dist

VDR

fuel gas

coke

H2

jet fuel

diesel

heavy gas-oil

visbreakerer

hydrocracker

reformer

alkylation

fuel oil

deasphalterlube oil

olefins

hydrotreater

H2

debutanizer

vac. distillation

del. cocker

cat. cracker

dewaxer

del. cocker

hydrotreaterhydrotreater

Refinery

tert. prod. EOR

production

production

production

prim. production

sec. production

e. heavy oil

oil/tar sand

oil shale

conventional on/offshoreoil & NGL

OIL

lpg

gasolineblender

asphalt

solar th.

PV

PV th. film

PV conc.

CSP dish

CSP tower

CSP throug

manure

msw

On/off depl.field

ECBM

Recycle/use

Mineralisat.

NAT GAS DISTRIBUTIONPIPELINE

coalbed gas

stranded gas

natural gas

gas hydrates

production

production

production

NATURAL GASGTCC A-GTCC

GTL fischer tropsch

methanol production

CHPDG

reforming

nat gas

methanol

production

natural gas EGR

distillationcurrent av. refineryshipping

pipeline

adv. best practice refinery

obsolete av. refinery

brown coal

lignite

hard coal extraction

extraction

extraction shipping

rail open mining extraction

peat extraction

CHP

FUEL DISTRIBUTIONNETWORKS

FC 2

liquefact.

pipeline

LNG ship Rigasific.

thorium

enrichment.extractionuranium transport manufacturing

LWR IV

HWR II

LWR II

enrichment.extraction transport manufacturing

CH4 reforming hydrogen

industry w.

sugar-starch

product.ligno-cellul.

wet biom

sol. biom forest/agr w.

collect.

product.oil extract.

ferment.

gasific.

anaer. dig

pyrolysis

biogas

ferment.hydrol.

bioethanoldistillat.

bio-oil

esterif.oil crops

direct comb. coal cofiring

methanol prod.

biodiesel

biodiesel

st turb

steam turb

TIAM Model

Reg. 1 Reg. 16

Reg. ...

Reg. 2Reg. ....

Resource1Resource 2Resource 3

Module: Market for emission trading

Module: New Technologies

OPEC

Climate Module

Endogenous technology learning

Multi-region modelEach region has its own energy system

TIAM Model

Resource supply and Upstream Sector

• For each region, split into three subsectors:– Mining (characterising basic resources)– Primary energy production (extraction and basic processing)– Secondary transformation (coke production, oil refining)

• Conventional and unconventional oil and gas resources resources are modelled

• Biomass resources are modelled• Key to this sector is the trade module covering:

– Oil crude– Oil products – DST, GSL, HFO, NAP– Natural gas / LNG– Coal– Uranium– Biomass (energy crops and solid biomass)

Global supply cost curves for all natural gas by category of gas and region in 2005

Scenarios

• Two Reference Scenarios– with low gas availability (LG-REF): no climate policy is applied and

the availability of unconventional gases is limited;– with high gas availability (HG-REF): no climate policy is applied.

Unconventional gas availability is increased and production costs of some gas types slightly reduced with an exogenous learning rate;

• Two respective Low Carbon Scenarios: a global cumulative GHG emission constraint is applied in order to restrict the global temperature increase to 2oC– with low gas availability (LG-LCS): – with high has availability (HG-LCS):

Primary energy consumption in China

LG-LCS HG-LCS

• Share of coal decreases from 65% in 2005:– to 44% in LG-LCS in 2050– to 16% in HG-LCS in 2050

• Share of gas increases from 2% in 2005– to 12% in LG-LCS in 2050– to 34% in HG-LCS in 2050

• Wider availability of unconventional gas less has less impact on biomass, nuclear, wind and solar primary energy consumptions.

• Primary energy in HG-LCS is less compared to LG-LCS (why?)

Electricity generation mix

• LG Scenario– More generation

• Low carbon electricity decarbonizes end-use sectors

– Less bio-CCS• Biomass directly used in

industry sector for heating

• HG Scenario– Less generation

• Gas partly decarbonizes end-use sectors (industry)

– More bio-CCS

Sectoral emissions

• Net emissions is higher in LG-LCS– Wider availability of unconventional gas slightly increases

China’s GHG mitigation potential

• CCS captures more CO2 emissions in LG-LCS– CCS is relatively more important in LG-LCS

LG-LCS HG-LCS

Conclusions

• Wider availability of unconventional gas:– reduces coal use especially in the power sector– reduces total electricity generations– reduces primary energy use as gas is directly used

in end-use sectors– Increases bio-CCS generations– reduces CCS capacity requirements– slightly increases China’s GHG mitigation potential

Thank Youg.anandarajah@ucl.ac.uk