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China’s Energy Development in the Era of Global Engagement Kevin Tu China Program Manager International Energy Agency Dublin, 21 April 2016
China’s Energy Development in the Era of Global Engagement
Kevin Tu
China Program Manager
International Energy Agency
Dublin, 21 April 2016
• About the International Energy Agency • Found in 1974 in wake of 1973 oil embargo.
• Energy security, Economic development, Environmental awareness, Engagement worldwide
• IEA new ED’s first official mission to China • Vision speech in CASS in September 2015.
• 2015 IEA Ministerial Meeting • Activation of IEA Association along with Indonesia
and Thailand in November 2015.
• 20th Anniversary Ceremony of IEA-China Engagement (30 March 2016) • IEA-China Energy Cooperation Centre.
• Chinese senior official to work at the IEA.
• China launch of WEO 2016 special report
• WEO 2017 special report on China
China and the IEA
Shifting global energy landscape
59.0%
37.2% 27.4%
7.1%
22.2%
22.4%
33.8% 40.6%
50.2%
0%
25%
50%
75%
100%
1974 2013 2040
Others
China
IEA
China’s ascendance in the energy sector has brought both opportunities and challenges in terms of global energy governance.
Comparison of energy mix
The convergence of energy mixture between China and world average has profound implications on global energy & environmental agenda
68%
29% 20%
16%
31% 36%
4.7%
21% 28%
2.6% 2.4% 1.1%
8.3% 11.3% 5.6%
1.0% 4.8% 10%
0%
25%
50%
75%
100%
China World U.S.
Nuclear
Other renewables
Hydro
Gas
Oil
Coal
0
10
20
30
40
50
60
1990 2000 2010 2020 2030 2040 2050
GtC
O2
Other OECD 9%
United States 13%
European Union 7%
Other non-OECD 15%
Other emergingeconomies 14%India 13%
China 29%
Post-COP21 reality check
About 70% of the decarbonisation actions need to take place in non-OECD countries especially China
Paris
16 March 2014 – index 43/100
Pictures courtesy of AirParif
14 March 2014 – index >100
2 days later
Beijing
6 days earlier
Los Angeles Photochemical Smog, 1940s
Great London Fog, 1952
Air pollution as key policy driver
Vehicle, 22% Coal, 17%
Adjacent Regions, 24.5%
Construction, 16%
Solvent, 16%
Agriculture, 4.5%
PM2.5 Emissions by Source
Beijing China
Coal & Secondary Emissions, 45%
Vehicle, 20%
Construction/ Industrial, 20%
Others, 15%
Source: Deutsche Bank & Beijing Municipal Government.
Governance structure & 13th FYP
“New normal” of GDP growth: 7% in 12th FYP, 6.5-7% in 13th FYP.
Energy intensity and carbon intensity reduction targets: 16% & 17% in 12th FYP, and 15% and 18% in 13th FYP.
First ever absolute national energy consumption cap at 5 billion tce by 2020.
0
500
1000
1500
2000
2500
3000
35001
97
8
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
Has coal use in China already peaked?
After the take off in 2001 and a golden decade of average annual growth around 10%, a new era for coal in China has started
China joined the WTO Coal demand
declined two years in a row
The end of two digit growth
Mtce
Peak coal in China?
Has coal use in China already peaked?
Source: CERS (2016) China Energy Outlook 2030.
2011 2012 2013 2014 2015 2020 2025 2030
Demand 3.89 4.12 4.24 4.12 3.94 4.08 3.70 3.61
Growth % 11.4 5.9 3.1 -3 -4.3 -0.9 -2 -0.5
-9
-6
-3
0
3
6
9
12
15
18
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
National Coal Consumption (billion tonnes)
Growth Rate (%)
Oil and Gas Sector Reform in China
Document Not known yet
Date Near future
Authority Not known yet
Key issues
on Reform
(Expected)
Liberalization of crude import licensing Further deregulation in pricing Futures and spot trading of Chinese oil and gas Third party access of pipeline infrastructure Opening upstream oil and gas exploration Reform on resource taxation system Mineral rights of unconventional gas
Nuclear development after Fukushima
0 20 40 60 80 100 120
Operational capacity in 2010
NDRC (2007)
Before Fukushima Low
Before Fukushima Medium
Before Fukushima High
State Council (2014)
China’s operational nuclear capacity target in 2020 (GW)
Post-Fukushima political reality: higher safety standards, technological uncertainties, public attitude towards inland nuclear construction, rapid development of renewables, and overcapacity of coal-fired power plants
China alone is expected to add more renewable power capacity than all OECD countries together, and than all other non-OECD countries together
China leads global Renewable growth
Shares of net additional renewable capacity, 2014-20
EU - 28
13%
United States
9%
Japan
5%
Rest of OECD
8%
China
38%
India
9%
Brazil
5%
Africa
4%
Rest of
non - OECD
9%
Historical Development Period
Level of engagement
Milestone events
Pre-1980s
No engagement
• Beginning of oil exports, without direct contacts with international energy governance bodies.
1980s Start of engagement
• Became a member of the WEC in 1983.
• Joined IAEA in 1984.
1990s More active engagement
• Together with Hong Kong and Chinese Taipei, joined the APEC Energy Working Group in 1991.
• Signed UNFCCC treaty in 1992.
• Signed a MOU with IEA in 1996.
Since 2000
More influential engagement
• Became a founding member of JODI in 2001.
• Established co-operation relationship with Energy Charter in 2001.
• Founding member of IEF in 2002.
• Established co-operation relationship with OPEC in 2005.
• Founding member of SCO Energy Club in 2007.
• Founding member of IFNEC (International Framework for Nuclear Energy Cooperation) in 2010.
• Engaged in in-depth energy discussions under the G20 process since early 2010s.
• Joined IRENA in 2014.
• Activation of Association with the IEA in 2015
Increasingly closer energy interdependence between China and the world;
Bilateralism -> multilateralism;
China’s evolving views and practices in global governance;
Transitions in global energy landscape;
Global and local environmental challenges especially climate change and air pollution.
Driving forces
Overview of China’s Engagement in Global Energy Governance
Concluding remarks
Alleviating air pollution ASAP and peaking carbon emissions around 2030
are two most important energy policy drivers in China.
Coal is expected to continuously fuel China’s economic growth in the
foreseeable future, cleaner coal technology, air pollution control and
lower carbon energy transition are key to coal’s future in China.
Comprehensive energy sector reform is the prerequisite to realize the full
potential of natural gas utilization and renewable development in China.
Large scale nuclear development could move China’s climate agenda
forward, but has to face post-Fukushima political reality including less
supportive public attitude and overcapacity of coal-fired power plants.
Recent progress between China and the IEA has laid a solid foundation for
China’s engagement in global energy governance, the future of bilateral
relations depends on efforts at both sides.
Thank you very much !
Kevin Jianjun Tu
China Program Manager
International Energy Agency
