Chinas Energy Transition: Sustainability, Energy Security and Innovation Jim Watson Director, Sussex

1
Chinas Energy TransitionSustainability, Energy
Security and InnovationJim WatsonDirector,
Sussex Energy GroupDeputy Leader, Tyndall Centre
Energy Programme Launch of Chinas Energy
Transition, Beijing, China, 29th April 2009
2
Overview

• What the scenarios mean for natural resource use?
• Are the scenarios compatible with energy
  security?
• Key role for low carbon innovation
• Questions for discussion

3
Resource useCoal Demand (2005-2050)
Global reserves 600 billion toe
4
Resource useCarbon dioxide storage for CCS

• Chinas theoretical storage capacity 840 GtC
• 99 in saline formations largely uncharacterised
• Cumulative storage, 2005-2050 1.3GtC 5.8mGtC
• So available storage likely to be adequate
• But could be some large source-sink distances

5
Resource useOil Demand (2005-2050)
Global reserves 168 billion toe
6
Resource useWind power deployment
Capacity at end of 2008 13GW
7
Resource useSolar PV deployment
Largest PV deployment in S2 800GW. 1000 times
larger than planned PV plant in California Using
similar technology, scenario 4 would cover 12,500
square miles of land
Smallest in S3 240GW Could cover 3,800 sq miles
8
Resource useFirst generation biofuels?
No Second or third generation needed
9
Energy security in the scenariosMore than
geopolitics

• Fossil fuel scarcity and external disruptions
• Exposure to imports of oil and gas and to price
  volatility
• Imports not always insecure diversity of sources
  / supply routes and international markets can be
  a good strategy
• Lack of domestic investment in infrastructure
• Investment rates very high but similar to
  recent past
• Need for incentives so that investment is made
• Extensive intermittent renewables smarter
  systems can help

10
Energy securityMore than geopolitics

• Technology or infrastructure failure
• Failures are normal only a problem if they are
  catastrophic or affect many installations at the
  same time
• Diversity can help here too. Chinese energy
  system getting more diverse in all of our
  scenarios
• 2005 Coal (65), Oil (16), Renewables (16)
• 2050 (S4) Coal (31), Oil (19), Renewables
  (27) Gas (13), Biofuels (5), Nuclear (5)

11
A central role for low carbon innovation

• Science and technology have a significant role
  to play in understanding climate change and
  effectively coping with it ... Regrettably, no
  substantive progress has been made in the global
  sharing of climate change technologies
• Wen Jiabao, Chinese Premier, November 2008

12
Key role for low carbon innovation

• Innovation as central theme in our scenarios
  speed and extent varies between them
• Builds on Chinese governments policy of economic
  rebalancing and Chinas stimulus package
• Innovation as key to low carbon growth includes
  low carbon deployment and industrial development
• Incentives are critical for RD, demonstration
  and deployment (national and international)
• New institutions and policies could also help
  build capacity e.g. low carbon zones and low
  carbon innovation centres

13
Key role for low carbon innovation Chinas
capacity growing
14
Key role for low carbon innovation
International collaboration

• Developing countries like China still need
  assistance with innovation e.g. through
  technology transfer
• Improving technological capabilities is an
  important part of the transition to a low carbon
  development path
• Chinas needs vary e.g. greater in traditional
  heavy industries and advanced fossil fuel
  technologies?
• Long history of technology transfer, but emphasis
  on hardware and neglect of training / capacity
  building
• Firms often share technology for normal
  commercial reasons. Need incentives that favour
  low carbon / sustainable technologies

15
Questions for discussion

• Can China secure the natural resources it
  requires for a low carbon transition? Are
  biofuels a feasible large-scale option for
  Chinas transport needs?
• What are the tensions between low carbon and
  energy security objectives for China? Can they be
  resolved?
• Are examples like Goldwind and BYD Auto signs
  that China will take the global lead in low
  carbon innovation as the world comes out of
  recession? How is the picture different for
  traditional heavy industries?