China Thermal Power Efficiency Project

1
China Thermal Power Efficiency Project

• WB support to the improvement of coal-fired
• power generation efficiency in China
• Jie Tang
• Energy Specialist
• East Asia and Pacific Region

2
Energy Supply to Sustain Economic Growth

• Increased demand on energy supply, less energy
  intensive, and sustainability
• 1. The 11th Five-Year Plan (2006-2010)
• doubling the GDP (2000 - 2010)
• Improving efficiency
• reducing energy consumption per unit GDP by 20
  (2005 to 2010)
• Power sector installation of large-sized,
  high-efficiency thermal generators and scale up
  efficiency improvement
• 2. The medium and Long Term Energy Conservation
  Plan
• reducing energy consumption per unit GDP by 2.2
• power sector highlighted for efficiency
  improvement

3
Coal as a Dominant Energy Source
Coal accounts for about 65 primary energy
supply in China, and will remain dominated until
2020.

• CHALLENGES
• 1. Long-term Energy Security
• Providing affordable and reliable energy supply -
  40 oil imported
• 2. Local Environmental Impacts
• acid rains impact on agriculture and food
  security
• SO2 emissions will double and NOx emission will
  triple from 2000 to 2020
• particulates impact on population health
• cost of exposure to particulates for urban
  residents expected to rise from 32 billion in
  1995 to 98 billion in 2020 (WB China 2020)
• 3. Global Environment Impacts Climate Change
• High coal consumption is leading to increased GHG
  emission

4
GHG Emission
Chinas CO2 emissions are expected to increase
from 3.3 billion tons in 2000 to 5.7 billion tons
in 2020 (IEA 2004)
5
World Bank Support
Support renewable energy development
Support EE improvement Thermal Power Efficiency
Project
Advices on legislation, policies and sector
regulation
Support technology transfer development clean
coal EE
6
The Power Industry - Capacity
Total installed capacity reached 442.4 GW by
2004, 12.6 increase from 2003

• 329.5 GW in thermal, produced about 82 of the
  total electricity output in 2004
• about 50 of the total coal consumption of 1400
  Mtce in 2004, was for power generation.

74.5
23.8
7
Coal-fired Power Generation- efficiency

• The overall efficiency of coal-fired generation
  is about 20 lower than best international
  practice

1995
1990
1985
8
Coal-fired Power Generation- Way to improved
efficiency
Mix of thermal power units in 2004
Unit Number of sets Average Gross Efficiency (gce/kWh)
600 MW 53 328
300 MW 341 355
200 - 300 MW 218 340
100 - 200 MW 389 365
below 100 MW gt 4000 gt 390
Overall Efficiency Overall Efficiency 352

• Sector-wide approach to
• Applying stringent efficiency standard on new
  capacity addition
• Phasing out small units
• Rehabilitation

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Barriers to Efficiency Improvement - barriers
to efficiency improvement of existing units

• Regulatory barriers
• Lack of adequate policies, incentives mechanisms
  enforceable standards for efficiency management
• Lack of detailed regulatory provisions supporting
  implementation of the Medium and Long Term Energy
  Conservation Plan in the power sector
• Institutional barriers
• Weak enforcement of government policies
• Weak supporting systems for efficiency management
• Lack of obligations or incentives to invest
  energy efficiency improvements
• Technical barriers
• Lack of advanced technologies for rehabilitation
  of medium an large- sized units
• Lack of advanced technologies for rehabilitation
  of plant auxiliary equipment to improve overall
  plant efficiency

10
China Thermal Power Efficiency Project- proposed
for GEF Grant (US19.7 million)

• The project is designed to offer a systematic
  program to increase the overall efficiency of
  Chinas coal-fired power plants
• Phase-out small-sized
• Facilitate investment in rehabilitation /
  retrofitting of in-efficient thermal units
  through technical capacity building and
  demonstration
• There are three components
• Enhancement and Enforcement of Sector Regulation
  on EE
• A mandatory and incentive approach
• Efficiency Improvement Demonstration Project
  (Rehabilitation)
• Technical Capacity Building

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China Thermal Power Efficiency Project -
Rehabilitation and technical capacity building

• Efficiency Improvement Demonstration Project --
  Rehab.
• Identify about 10 sets of potential units in
  different categories of unit size
• Technical auditing and justification (economic,
  financial, reliability)
• Packaged solutions to unit / plant efficiency
  improvement
• Financial justification / cost-effectiveness of
  individual as well as packaged solutions
• Including environment project when possible
  regulation requirements on emissions, financial
  implication to plant owner
• Market demand and implementation schedule
• Development of new business and financing models
  for rehabilitation
• Competing with other initiatives on plant own
  working capital (annual budget for Technical
  Renovation Funds)
• Rehabilitation of units plants for
  demonstration
• about 57 units of 200MW and 57 units of 300 MW
  have similar type of technologies/design
  (double-flow turbines)
• Technical Capacity building
• TA to technology development and/or transfer to
  lower down cost of rehabilitation and to explore
  further efficiency increase potential
• Creation of awareness and dissemination of
  knowledge

12
China Thermal Power Efficiency Project - project
cost and financing
Project Components Local Financing GEF Grant Estimated Total
  (USm) (USm) (USm)
Enhancement of Regulation on Energy Efficiency 1.5 3.6 5.1
2. Efficiency Improvement Demonstration Project 85.5 (79) 8.5 94
3. Technical Capacity Building 6.6 7.6 14.2

Total Project Costs 93.6 19.7 113.3

• Total cost estimation 113.3 million
• US93.6 million in counterpart funds, covering
  100 of the capital investment in demonstration
  (US79 million) and partial cost of technical
  assistance activities
• US19.7 million GEF Grant, contributing to the
  cost of technical assistance activities

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China Thermal Power Efficiency Project - GEF
financing, carbon financing

• GEF financing contributing partially to the
  cost of
• Policy and regulation enhancement
• Technical auditing (bring international best
  practices when possible)
• Technical capacity building rehabilitation
  technology, plant service efficiency
• Knowledge dissemination for replication

• Carbon financing for rehabilitation in
  considerations
• Baseline unit or plant itself - coal consumption
  rate and output (kWh) before rehabilitation
• ERs reduced coal consumption for same amount of
  output (kWh) after rehabilitation
• Methodologies to be developed

14
Thank you !