Coal Inventory Reduction Policies

Energy plays a very important role in the development of economics and society in our country, almost all of CO2 emissions are from energy use. China has been the largest CO2 emissions country in the world, which accounted for almost a quarter of the world's total emissions after she exceeded the level of US in 2008. The Chinese energy demand in the future will remain strong, and the related CO2 emissions will be more and more focused and pressed by the international society. Coal is the main origination of CO2 emissions in China, accounted for 70% of the total energy related emissions. So research on the coal related CO2 emissions and focus on the main source will largely slow down the growth rate of CO2 emissions in our country.CO2 emissions inventory is a kind of detailed list, which used for recording and reporting the anthropogenic CO2 emissions during a period, usually, a year. The scope of CO2 emissions inventory includes the national, regional and city-wide, corporate, and the lifecycle of product. The Intergovernmental Panel on Climate Change (IPCC) released several GHG Inventory Guidelines for the purpose of inventory making. It is of special significance to make CO2 emissions inventory related to coal consumption. So the concept of coal inventory is put forward in this thesis, which means the CO2 emissions inventory related to coal consumption in a country. As to the object, coal inventory is a part of the national CO2 emission inventory; but there are two inventory making paths, one is based on the coal consuming side as the national CO2 emissions inventory making, and the other is based on the coal producing and sale side. Lifecycle emissions inventory of a product is based on the lifecycle emissions of the producing process.This research analyzes the main characteristic of Chinese coal related statistic system, figuring out the challenges and advantages when used for coal inventory making. We conclude that currently it is hard to use the coal consuming based inventory making path, but it is more suitable for coal producing and sale based path to apply in Chinese coal inventory. This path is the extension of the IPCC reference method in theory, in practice it is decided by Chinese coal situation, which characterized as self-dependant.The result of the coal inventory shows that, coal power related CO2 emissions accounted for 49% of the total CO2 emissions in 2005, which is higher than 37.2% in 1994. For power is the advanced energy product, more energy transformed to power the higher energy efficiency is. So we can estimate that the percentage of coal power related CO2 emissions will even go higher. Take the power sector as the key emissions sources will largely slow down the growth rate of CO2 emissions in China.The thesis use environmental economics method and energy system engineering method to forecast the power sector related CO2 emissions and analyze the emissions reduction policy. It is of great significance to use the environmental economic method to forecast the total CO2 emissions, coal use related CO2 emissions and power related CO2 emissions. This method based on the Environmental Kuznetz Curve (EKC) to analyze the relationship between CO2 emission intensity and GDP per capita. Then we will combine this relationship to the 17% CO2 emissions intensity target put forward in the national 12th five year plan to get the CO2 emission path based on the policy consistence. The result shows that China will reach the CO2 peak in the year 2038; coal use related CO2 emission will reach the peak before 2038 and coal power related CO2 emissions will reach the peak after the coal related emissions peak. In addition, the environmental economic method can also evaluate the CO2 emissions reduction target, which shows that the reduction target in the 12th five year plan is more aggressive than the international experience, which means China has make active efforts to control the CO2 emission.But there are limits related to the environmental economic method. The most noticeable is that it cannot reflect the process during which CO2 is produced. The process including power demand, power transformation, and primary energy supply. So the environmental economic method can hardly guide the technology chose and policy making.Energy system engineering method is used to solve these problems in the power system. It will be based on the micro-characteristic of the power demand sector, power transformation sector and primary energy supply sector. We will apply two analysis frameworks to the power system:the accounting framework based on the scenario setting (scenario analysis) and the optimization framework. The scenario analysis framework based on the setting of the factors that influence the power demand, power transformation technology to calculate the power demand and power supply structure and power related CO2 emissions. The result shows that power demand in 2020,2030,2040 and 2050 will reach 5004.00,6418.65,8095.83 and 9443.16 TWh under the reference scenario. In the supply side, we synthesize the technology factor, economic factor, management factor, policy factor and environmental factor to set the power technology development scenario. We can find that hydro power and nuclear power will increase quickly to substitute the traditional low efficiency coal power, and the development of carbon capture and storage (CCS) is slow. In addition, in this part we discuss the technology learning curve, which explain the fact that the technology cost will reduce as the scale increase. We use the learning curve to analyze the wind power and carbon capture technology, the conclusion of which is that reduction cost of wind power is higher than the carbon capture technology; but when carbon transportation and storage cost included, the latter will be higher than the former.The optimization framework is considering the total cost of power system under the condition of power demand and CO2 emissions control. The optimization result shows that China need to increase the scale of supercritical or ultra supercritical coal power besides to hydro power. When CO2 emissions control become stricter, the economic advantage of nuclear power will be emerge. CCS technology will become economic competitive after 2040 because of the technological learning effect. For the short lifecycle and high cost, the wind power can hardly account for large percent of the total energy supply.The energy system engineering method provides suggestions for the government reduction plan. We can find that the scenario analyze is more subjective, static and independent in the technology evaluation. But the factors it considered are more complete, including some measureless factors, such as management factors and policy factors. The optimization framework is more objective and scientific, which consider the dynamic interaction of technologies. But this framework has just one objective and many factors that cannot be measured and included, so the result will inevitably ex parte. So the thesis proposes five principles for policy plan, which are integrated, scientific, targeted, complete and reliable. Currently we need to base on the optimization framework, consider more and more factors which are hard to be measured. The Lingo program developed in this thesis will pave the way for the further research.The reliable principle is hard to satisfy, which depends on the robust data gathering, reporting and verification system of energy and CO2 emissions. This also is the biggest challenge of the emissions reduction plan. The reliable principle also determines the feasibility of CO2 emissions trading system, which is the market based mechanism. Only under the auction of credits can the emissions trading system realize its economic effective. But this system has to be guaranteed by a mature market mechanism, which has a long way to go in China.This thesis has the following innovations:Firstly, the coal inventory concept is put forward and its theoretical framework is explained. Two inventory paths, including coal consuming based path and coal producing and sale based path, are introduced. Based on the current coal related statistical system in China, we suggest coal producing and sale based path is more suitable for China coal inventory making. China coal inventory in 2005 is made using this path.Secondly, we put the CO2 emissions intensity target into the environmental economic framework to forecast the CO2 emissions, coal use related CO2 emissions and power related CO2 emissions. We also use this model to evaluate the CO2 emissions intensity target. This kind of analysis is not common in the related researches.Thirdly, the thesis tries to establish an energy system engineering framework in applying to the power system, and evaluate the policy implication. The framework including accounting framework based on scenario setting and optimization framework under several controls. The traditional energy system engineering framework often consider the whole energy system, such as LEAP and MARKAL. In power demand part, former researches mainly use the econometric method to forecast. In this thesis we base on the influential factors that determine each power demand sector, use the accounting method to calculate the power demand. Based on the evaluation in large amount of papers and reports, we get the distribution of each factor and use them to do uncertainty analysis to power demand. Power supply scenario analysis is based on the technological, economic, management, policy and environmental factors that influence the development of each power technology. In the optimization part, we use the optimization method to minimize the system cost, which is different from MARKAL power system module, which targets the minimization of the investment.!n addition, we also include the technological learning curve to the optimization model. Based on the Lingo we develop the program not only for facilitating the calculation, but also for further research.Fourthly, energy system engineering method is based on the evaluation of each power technology. The thesis introduces the technological learning curve to evaluate the movement of the technology cost. A comparable analysis is used to analysis the cost of wind power and carbon capture technology. This kind of analysis is not common in current research.The thesis try to provide a comprehensive and meticulous framework for the coal use related CO2 emissions and power sector emissions reduction. From historical analysis on emissions inventory to future analysis including environmental economic analysis, scenario analysis and optimization analysis; from the trend forecast to the bottom up analysis based on the technological characteristic; from the technological evaluation to technological choice and strategy. The framework theoretically provides an important reference for the energy and environmental research. The thesis of course cannot apply it to each subject of energy and environmental research, why we choose coal inventory and power system analysis is based on the energy reality of China, which is coal-foundation and power-centralization.