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Resolving the Tension between CCS Deployment and Chinese Energy Security Xi Liang* Business School, University of Edinburgh, 29 Buccleuch Place, Edinburgh, UK EH8 9JS
David Reiner Judge Business School, University of Cambridge, Trumpington Street, Cambridge, UK CB2 1AG On the other hand, China is the second largest importer of crude oil in the world in 2012.2 Even more dramatically, China shifted from being a net exporter to a net importer of coal in 2009 and by 2011 became the largest net importer of coal in the world, though there is still debate on whether China will need to increase coal imports in the future.3 Energy conservation is a top Chinese national development target, but energy demand will inevitably grow substantially in the next two decades given that Chinese per capita energy consumption remains much lower than the OECD average level even though its per capita CO2 emissions are reaching European levels. Despite these pressures, security of primary energy supply has become a major national priority. In 2011, the Chinese government (National Development and Reform Commission and Ministry of Finance) launched the emergency coal reserve program that encourages large coal-mining companies, large power generation companies, and major coal transportation terminals to develop a strategic coal reserve. Deploying state-of-the-art CCS technologies in the power generation sector would avoid roughly 85% of CO2 emissions with an energy penalty of 20−30%. An aggressive strategy to capture CO2 at, say, 40% of Chinese coal-fired power plants would then lead to a rise of approximately 10% in national coal he energy penalty associated with carbon dioxide capture consumption, equivalent to 1.5 times net coal imports in 2010. and storage (CCS) technologies is a key barrier to largeIn other words, significant extra fossil fuel consumption and scale deployment in China, because consuming extra fossil fuels power plant infrastructure would be required if CCS to capture CO2 could be considered as conflicting with technologies were widely deployed. This explains why even domestic priorities favoring energy conservation, diversity, and though CCS is widely recognized as a key technology to self-sufficiency. Flexible CO2 capture designs could, however, decarbonize the Chinese fossil fuel dominated energy system, allow CCS power plants to temporarily reduce the level of CO2 there is very limited financial support for demonstrating and capture, thus, in the short term, the energy penalty could deploying CCS projects at large-scale.4 CCS is therefore not potentially act as a “strategic virtual reserve” that could reduce currently a high priority on the list of possible climate the risk of fossil fuel supply interruptions and provide extra technology options also compatible with energy supply security reserve capacity margin. Furthermore, an upgradable futureand energy efficiency priorities. proof design for CO2 capture could help avoid “energy penalty The extra energy infrastructure requirement for CCS to meet lock-in” during a plant’s lifetime as technology learning takes peak electricity demand could be minimized through flexibility place. in operating CCS systems (e.g., by shutting down CO2 capture In 2011, global emissions of carbon dioxide increased by 1 during supply shocks) while the experience curve could reduce Gt, of which 720 Mt of the increase was attributable to China.1 the energy penalty in the long term. To do so will require China’s share of global emissions increased to 24%, now far investing in flexible, future-proof designs for CO2 capture ahead of the United States, the next largest emitter, at 15%. power plants.5 With a flexible CO2 capture design, CCS power Overall, 45% of global CO2 emissions are produced from coal plants could temporarily reduce the level of CO2 capture in and fully half of those emissions are from China, the vast order to generate more power to complement intermittent and majority of which is used in the power sector. Therefore, CCS, inflexible technologies in the energy system. Notably, the as the only technology that can decarbonize fossil fuels, should logically be central to any plausible strategy for significant cuts in emissions. Published: May 7, 2013
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Environmental Science & Technology
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solvent upgrade flexibility and capture bypass flexibility are relatively easy to be developed in a retrofitted CO2 capture power plant, because the turbine, the power generator, and other auxiliary service units have been naturally “oversized” in the retrofitting case. Furthermore, the energy penalty for CCS could potentially play a role as a “strategic virtual reserve” that could hedge against the risks of unexpected fossil fuel supply interruptions (e.g., persistent extreme cold, ice or heavy snow, transportation interruptions). Instead of needing a physical reserve, a “virtual reserve” would offer extra capacity that could be released immediately in an emergency. In a power plant, turning off the steam extraction for CO2 capture would immediately reduce coal consumption for power generation by more than 20% and therefore significantly release the pressure on regional coal supply. Given inevitable pressures to reduce carbon dioxide emissions and maintain economic growth, CCS offers an important means of decarbonizing the electricity system with the least disruption to the existing grid and energy markets. In so doing, it can help decarbonize not only the power sector, but also the transport system in turn if progress is made in commercializing hybrid electric or fully electric vehicles. CCS would thereby address the one core element of China’s energy security challenge for which there is universal agreement, namely reducing imports of liquid fuels, particularly petroleum. The energy penalty from current CCS technologies would, however, increase the challenge of meeting rapidly growing energy demand and reduce the overall efficiency in the energy sector. Ultimately, CCS will be more attractive if the energy penalty can be reduced and more use made of the flexibility offered in CCS systems. China is estimated to have significantly lower capital costs and shorter lead times in constructing CCS power plants, thus it has an important role to play in demonstrating CCS technologies. The question is then what role China will play in increasing learning that will drive down the energy penalty over time, since, if China does not deploy CCS technologies at relatively early stages, the prospects for widespread CCS deployment will continue to recede. At least initially, Chinese investment in CCS does not need to be an “all or nothing” proposition. Given the slow pace of CCS deployment globally, an aggressive program of demonstration in China would place China in a leadership position and help its international negotiating position but would have only marginal impact on the wider energy security concerns. Such a program would take a decade or more and allow for learning that could drive down the energy penalty that could make widespread deployment more acceptable. In so doing, future-proof CCS technologies would need to be developed and the debate reframed in terms of the greater flexibility afforded by CCS technologies relative to other low-carbon technologies.
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2012. http://www.iea.org/newsroomandevents/news/2012/may/ name,27216,en.html. (2) British Petroleum. BP Statistical Review of World Energy; 2000 to 2011. http://www.bp.com/sectionbodycopy.do?categoryId= 7500&contentId=7068481. (3) Lin, B. Q.; Liu, J.; Yang, Y. Impact of carbon intensity and energy security constraints on China’s coal imports. Energy Policy 2012, 48, 137−147. (4) Reiner, D. M.; Liang, X. Stakeholder views on financing carbon capture and storage demonstration projects in China. Environ. Sci. Technol. 2012, 46, 643−651. (5) Chalmers, H.; Lucquiaud, M.; Leach, M.; Gibbins, J. Flexible Operation of Coal-fired Power Plants with Post-combustion Capture of Carbon Dioxide. J. Environ. Eng. 2009, 135, 449−458.
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[email protected]. Notes
The authors declare no competing financial interest.
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REFERENCES
(1) International Energy Agency. Global carbon-dioxide emissions increase by 1.0 Gt in 2011 to record high. IEA/OECD: Paris, 24 May, 4964
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