Fact Sheet on China s energy sector and Danish solutions

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1 Fact Sheet on China s energy sector and Danish solutions 1. EXPANSION WITH RENEWABLE ENERGY: China focuses on a massive expansion with non fossil energy that is renewable energy and nuclear energy. The aim is to increase the share from 8.3 pct. of China s energy consumption in 2010 to 15 pct. in China is now the world s largest market for wind turbines. During the last two years China has installed 37,000 MW wind turbines that is more than 40 pct. of all new wind turbines worldwide. But the integration of the fluctuating wind power causes challenges. There is a great interest in China to conduct research in renewable energy and the Chinese objective is to almost double the investments in research and development from 1.3 pct. of GDP in 2005 to 2.5 pct. in Today RE makes up 20 pct. of the Danish gross energy consumption. Denmark has made a commitment to EU to increase this share to approximately 28 pct. in Denmark is the country that produces the largest share of wind power in the world. Wind turbines will continue to constitute a large part of the Danish RE expansion as wind due to the Danish Energy Agreement is to account for 50 pct. of the power supply in Denmark has years of experiences with integration of wind power in the power supply. Smart grid solutions enable a high share of wind power in the power sector and these will also in the future be high on the agenda in the Danish energy system. Therefore there is an extensive potential for increased cooperation with China in this area. Denmark will contribute to China s expansion with RE through a new cooperation with China s National Energy Administration which aims to help make Danish renewable energy technological solutions applicable in China. The specific cooperation on renewable energy will primarily be conducted through the newly established centre for renewable energy (China National Renewable Energy Centre). The centre advises the Chinese government on how to strengthen renewable energy and how to incorporate adaption of RE in the Chinese energy supply as well as which political instruments are necessary in order to realise this. The centre is established with assistance from the Danish Chinese programme for development of renewable energy that is conducted during the period 2009 to The centre has signed a cooperation agreement with the Danish energy Agency, among other about expansion and integration of renewable energy in the power sector. The Danish efforts within research, development and demonstration in the field of energy have over the last years been increasing and Denmark holds positions of strength within e.g. wind and biomass. China and Denmark have mutual interest in the research area and a new cooperation with China s Ministry of Science and Technology of the People s Republic of China

2 will facilitate Danish Chinese partnerships within research and development in relation to renewable energy, energy efficiency and smart grids. 2. ENERGY CONSUMPTION AND EFFICIENCY: China will until 2035 be responsible for 1/3 of the global growth in the energy consumption. It is China s target to reduce the energy consumption per GDP unit with 16 pct. over a five year period ( ). As Figure 2 and 3 illustrates, China s energy consumption will continue to grow massively in spite of improved energy efficiency and a gradually smaller share of production from heavy industry in the economy. The energy consumption per capita will still approach the Danish level, which is decreasing among other because of the Danish Energy Agreement. Figure 2: The development in energy consumption in China and in Europe (OECD Europe). Source: OECD and IEA: World Energy Outlook 2011, New Policy Scenario. Figure 3: The development in energy consumption per person in China and Denmark. Source: OECD, IEA: World Energy Outlook 2011, New Policy Scenario and the Danish Energy Agency. Denmark can due to our long time experience with energy savings and energy efficiency support the realisation of the Chinese objectives for energy efficient improvement. Simultaneously, this opens a range of possibilities for the Danish business world, who, when it comes to energy, is leading in the world market. As a result of the Danish Energy Agreement the Danish gross energy consumption is expected to be reduced with another 7.6 pct. from 2010 to 2020.

3 3. ENERGY EFFICIENT BUILDING: The authorities strongly focus on reducing the energy consumption in Chinese buildings, where the substantial economic growth is followed naturally by many and large investments in building. Denmark has some of the world s most strict requirements for energy efficient building. The requirements/standards for the energy consumption of new buildings have been tightened a number of times most recently in 2010, where the requirements was tightened with 25 pct. compared to Simultaneously it has been decided to tighten the requirements the energy consumption of a new building with another 25 pct. in 2015 and again in Also when renovating existing buildings and when replacing building components requirements are made to ensure an ongoing energy improvement of the existing Danish building stock. Moreover, before the end of 2013, the Danish government will present a comprehensive strategy for energy renovation of the existing building stock. Due to the high Danish requirements, Danish companies have lots of experience with building energy efficient and undertake energy renovations. Also Danish manufacturers of building materials are in front when it comes to development of new energy efficient building materials. Danish authorities and companies many years of experience with energy efficient building enables Denmark to contribute to China s development in the same direction. It will happen in cooperation with China s Ministry of Housing and Urban Rural Development. 4. THE POWER SECTOR: In 1990 China was responsible for a fourth of the world s coal consumption. In 2010 the share had increased to 48 pct. The background to the development has among other been the recent decades economic growth rates at about 10 pct. annually. China now consumes more coal than the USA, EU and Japan together. Today approximately 70 pct. of China s energy consumption is covered by coal, which is a large share internationally speaking. China builds most new coal fired power plants worldwide. In China s Five Year Plan ( ) it is expected that new coal fired power plants equalling ¼ of EU s total amount of coal fired power plants will be put up. In the last Five Year Plan ( ) China every week put up equivalent to three large Danish power plants. The Chinese power sector still grows massively. From 2005 to 2015 the accrual in China s power sector is expected to be as big as in EU s entire power sector. Figure 1 illustrates how China s power sector grows massively these years and that the expansion in particular takes place within coal power and renewable energy.

4 Figure 1: The development in China s power sector according to the Five Year Plan China has succeeded in utilising an increasingly larger part of the coals energy and thus to improve the energy efficiency. In 2006 approximately 34 pct. of the coals energy was converted into electricity. This is a significant increase compared to 1997 where the efficiency was approximately 26 pct. But there is still a considerable potential to increase the energy utilisation. In these years China has an increasing focus on the utilisation of cooling water to district heating so that close to 90 pct. of the energy can be utilised. Today 14 pct. of the Chinese electricity is produced at combined heat and power plants. The Chinese aim is to raise the share to at least 22 pct. in Denmark has much knowledge and experience with establishing combined heat and power and utilising surplus heat. In Denmark more than 50 pct. of the electricity/power is produced at combined heat and power plants one of the largest shares in the world. China has an interest in cooperating with Denmark about this Danish main competence. The high share of cogeneration is possible because Denmark has a large share of district heating supply. Today, more than 50 pct. of the Danish heat requirement is covered by district heating. In 2011 the Danish export of energy technology made up for more than 10 pct. of the total Danish export. Export of district heating technology and power plant technology, among these biomass solutions, is included in this export. 5. CLIMATE AND CO 2 EMISSION: China will until 2035 be responsible for about half the global increase in CO 2 emissions. It is thus crucial to the global climate that China reaches its objective to reduce the CO 2 emission

5 per GDP unit with pct. by 2020 compared to 2005 and that this objective is followed by new ambitious targets. China s CO 2 emissions grow massively these years as illustrated in Figure 4. Today China emits the most worldwide ahead of USA. By 2020 every Chinese will be responsible for a larger CO 2 emission than the average Dane, whose emission decreases rapidly as a consequence of the Danish Energy Agreement (Figure 5). Because of the Danish Energy Agreement the Danish emission of CO 2 from energy consumption will drop 30 pct. compared to The Danish Climate Commission has composed long term solutions to how Denmark can phase out the use of fossil fuels completely up until Figure 4: The development in CO 2 emission in China and in Europe (OECD Europe). Source: OECD and IEA: World Energy Outlook 2011, New Policies Scenario. Figure 5: The development in CO 2 emission per person in China and in Denmark. Source: OECD, IEA: World Energy Outlook 2011, New Policies Scenario and the Danish Energy Agency.

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