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

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

3. 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.

4. 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 2020.  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.

5. 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)

6. 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?

7. 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)

8. 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

9. 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)

10. 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

11. 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

12. 谢谢！ Thank you! Comments Welcome Hu Junfeng ( 胡军峰 ) North China Electric Power University hu-junfeng@sohu.com