Analysis of CO 2 Abatement Strategies in China’s Electricity Sector Hu Junfeng ( 胡军峰 ) North China Electric Power University July, 2010

Outline 1. Background 2. Research Objectives 3. Main Partners 4. Analysis Framework 5. Completed Research 6. Ongoing Research 7. Future Research

1. Background  Globally, CO 2 emissions were 29.2 billion tons in 2006 (EIA).  Global CO 2 emissions need to be reduced to 10 billion tons per year by 2050 to mitigate climate change.  China’s share of global CO 2 emissions has rapidly increased, from 8% in 1980 to 21% in 2006; China has replaced the United States as the world’s largest CO 2 emitter.

1. Background  The Chinese government set an objective to reduce the CO 2 intensity of GDP per capita by 40-45% over 2005 levels by  The electricity sector is China’s largest CO 2 emitter (40% of gross CO 2 emissions), and should be specially regulated.  Reduction of CO 2 emissions in the electricity sector should include both the demand and the supply side.

1. Background  Supply-side Mitigation Measures  Increase the share of non-fossil energy  Increase the efficiency of fossil fuel generation  Capture and sequester carbon from fossil fuel generation  Reduce transmission losses  Demand-side Mitigation Measures  Increase demand-side efficiency (e.g., efficiency power plants)  Adjust industry structure (e.g., through differential pricing)  Develop distributed generation (e.g., PV and CHP)

2. Research Objectives  What policy portfolios can best reduce CO 2 intensity in the electricity sector?  How much could electricity sector CO 2 emissions be reduced by 2020?  How much should the electricity industry, and society, pay to reduce CO 2 emissions intensity by 2020?  What could electricity sector CO 2 reductions contribute to the national CO 2 intensity goal?

3. Main Partners  Government  State Electricity Regulatory Commission (SERC)  Climate Change Department, NDRC  State Administration of Taxation  Ministry of Finance  Ministry of Industry and Information Technology  International Organizations  Regulatory Assistance Project (RAP)  World Bank  Energy and Environmental Economics (E3)

4. Analysis Framework Macroeconomy Demand Non-fossil fuel generation Fossil fuel generation TransmissionDistribution Electricity sector CO 2 mitigation policies CO 2 emissions Economy-wide CO 2 emissions

5. Completed Research  A Comparison of Electricity Sector CO 2 Emissions between China and the U.S. (2008)  Benefit-Cost Analysis of Differential Pricing Policy (2008)  Benefit-Cost Analysis of “Closing Small Power Plants” Policy (2009)  Development of Wind Power in China (2009)  Electricity Sector Supply Planning during the 12th Five-Year Plan (2010)  Generation Costs in Electricity Sector (2010)  Adjustments to the Electricity Sector’s Accounting System (2010)

6. Ongoing Research  Relationship between electricity sector CO 2 intensity and cost  Macroeconomic impacts of CO 2 emission reduction policies in the electricity sector  Scenarios for electric vehicle development  Models for electrical vehicle charging stations  Allocation scenarios for a carbon tax in China

7. Future Research  LCA for different generating technologies  Renewable energy integration, including required reserve margins  Regional transmission system integration  Models for transmission-distribution unbundling  Smart grid economics  System design for a carbon tax  System design for carbon cap and trade  Electric vehicle integration  Intelligent transportation

谢谢！ Thank you! Comments Welcome Hu Junfeng ( 胡军峰 ) North China Electric Power University