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A review of China’s energy consumption structure and outlook based on a long-range energy alternatives modeling tool

A review of China’s energy consumption structure and outlook based on a long-range energy... Pet. Sci. (2017) 14:214–227 DOI 10.1007/s12182-016-0136-z OR IGINAL PAPER A review of China’s energy consumption structure and outlook based on a long-range energy alternatives modeling tool 1,2 1 1,3 1 • • • Kang-Yin Dong Ren-Jin Sun Hui Li Hong-Dian Jiang Received: 19 June 2016 / Published online: 17 December 2016 The Author(s) 2016. This article is published with open access at Springerlink.com Abstract China’s energy consumption experienced rapid consumption structure into existing energy policies and growth over the past three decades, raising great concerns measures in the future. for the future adjustment of China’s energy consumption structure. This paper first presents the historical evidence Keywords Energy consumption structure  China-LEAP on China’s energy consumption by the fuel types and model  Scenario analysis  Clean fuels  Industrial sector sectors. Then, by establishing a bottom-up accounting framework and using long-range energy alternatives plan- ning energy modeling tool, the future of China’s energy 1 Introduction consumption structure under three scenarios is forecast. According to the estimates, China’s total energy con- Energy is essential for economic and social development sumption will increase from 3014 million tonnes oil and the improvement of life in all the countries (Bilgen equivalent (Mtoe) in 2015 to 4470 Mtoe in 2040 under the 2014). Energy consumption is a key lever to achieve more current policies scenario, 4040 Mtoe in 2040 under the rapid development (Rennings et al. 2012). Most scholars moderate policies scenario and 3320 Mtoe in 2040 under claimed that there is a strong relationship between China’s the strong policies scenario, respectively, lower than those energy consumption and economic growth (Li et al. 2014; of the IEA’s estimations. In addition, the clean fuels (gas, Liao and Wei 2010; Zhang et al. 2011). China’s energy nuclear and renewables) could be an effective alternative to consumption has increased dramatically since 2000 and is the conventional fossil fuels (coal and oil) and offer much forecast to keep rising in the next several decades due to more potential. Furthermore, the industry sector has much continuous economic growth. In the statistics of Interna- strong reduction potentials than the other sectors. Finally, tional Energy Agency (IEA), BP and the National Bureau this paper suggests that the Chinese government should of Statistics of China (NBS) (IEA 2015;BP 2016; NBS incorporate consideration of adjustment of the energy 2015), China’s energy consumption increased from 131 million tonnes oil equivalent (Mtoe) (in 1965) to 3014 Mtoe (in 2015), with the GDP increasing from 172 billion yuan (in 1965) to 67,670 billion yuan (in 2015) & Ren-Jin Sun (Fig. 1). sunrenjin@cup.edu.cn In China, the primary energy consumption includes five School of Business Administration, China University of types, i.e., coal, oil, gas, nuclear and renewables, which are Petroleum-Beijing, 102249 Beijing, China mainly used in the four sectors, i.e., transport, industry, Department of Agricultural, Food and Resource Economics, building and others (Bilgen 2014). The China’s 12th Five Rutgers, State University of New Jersey, New Brunswick, Year Plan set an ambitious goal, for which the adjustment NJ 08901, USA of energy consumption structure should make significant Energy Systems Research Center, University of Texas at progress during the 2011–2015 period. Thus, a number of Arlington, Arlington, TX 76019, USA studies have focused on China’s energy consumption structure such as new energy development, energy Edited by Xiu-Qin Zhu 123 Pet. Sci. (2017) 14:214–227 215 (Fig. 2), coal has long been the dominant fuel type in Total primary energy consumption GDP China, soaring from 114 Mtoe (in 1965) to 1920 Mtoe (in 2015) (Fig. 3). Specifically, despite the increased economic growth and a continuous increase in China’s coal con- sumption in 1965–1978, the share of coal in the total energy consumption gradually decreased from 87.1% to 71.3%. After the introduction of the reform and opening-up policy, the consumption of coal in China has increased rapidly from 283 Mtoe (in 1978) to 664 Mtoe (in 1995). Following that, with the adjustment of energy consumption 0 structure in 1995–2001 and the supply of coal being tightly 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 limited in China, the share of coal in the total energy Year consumption has fallen gradually. However, China’s actual Fig. 1 Total energy consumption and GDP in China. Data source BP coal consumption has increased dramatically since the turn Statistical Review of World Energy (2016) and NBS China Statistical of the millennium, considered as a result of rapid economic Yearbook (2015) development, urbanization, energy shortages, etc. The conservation and the improvement of energy efficiency consumption of coal increased from 679 Mtoe (in 2000) to (Lin and Wang 2015; Peng et al. 2015; Weidou and 1920 Mtoe (in 2015), with an average annual growth rate Johansson 2004). We need to consider China’s energy of 7.2% (Fig. 3). consumption structure in the past, present and future. What energy plan should be worked out to guarantee the goal of 2.1.2 Oil the adjustment of energy consumption structure, as set by the State (China) for the 13th Five Year Plan, is achieved? In China, oil is one of the important primary energy These issues must be carefully solved before the energy sources and has a strategic role in promoting economic strategies and policies are formulated. Hence, a review of growth. Since it initiated an economic reform program in China’s energy consumption structure and outlook is 1978, China has witnessed rapid economic growth and an valuable and may provide a guideline for policy-making. improved living standard (Zheng and Luo 2013). Mean- The major aims of this paper are (1) to present a compre- while, oil consumption in China increased rapidly from hensive and systematic investigation of China’s energy con- 91 Mtoe (in 1978) to 560 Mtoe (in 2015) (Fig. 3), with an sumption structure from the point of view of fuel types and average annual growth of 5.0%. However, China in not rich sectors, (2) to analyze China’s energy consumption structure in oil resources, and its oil reserves account for only 2% of in the future under three scenarios, by using the bottom-up the world oil reserves. Hence, China is highly reliant on the accounting framework and LEAP (Stockholm Environment oil imports, and about 61% of oil consumption was Institute, SEI 2014) energy modeling tool and (3) to describe imported in 2015 (NBS 2015). Moreover, China became a the results and also propose policy suggestions. net importer of crude oil in 1993, and the world’s second- largest oil consumer in 2002. Since the early 1990s, with 2 A review of China’s energy consumption Coal structure Oil Gas 2.1 China’s energy consumption by fuel types Nuclear Renewables 2.1.1 Coal Since the foundation of the People’s Republic of China, China’s energy has primarily come from coal (Govindaraju and Tang 2013). In comparison with oil and natural gas, coal is overwhelmingly abundant and more widely dis- tributed in China. Therefore, coal is the principal energy Year source in China and it is given a strategic role in the eco- nomic growth of the country (Li and Leung 2012). Fig. 2 Percentage of China’s energy consumption structure by fuel Although the share of coal in the total energy consumption types, 1965–2015. Data source BP Statistical Review of World has fallen from 87.1% (in 1965) to 63.7% (in 2015) Energy (2016) and NBS China Statistical Yearbook (2015) Total primary energy consumption, Mtoe GDP, Billion yuan Percentage, % 2015 216 Pet. Sci. (2017) 14:214–227 consumption, nuclear energy is an inevitable strategic Coal Oil option for China (Zhou and Zhang 2010). By the end of Gas 2013, there were 17 nuclear power units in commercial Nuclear Renewables operation in China (CNEA 2014; NRDC 2014), with pro- duction of 38.6 Mtoe (in 2015). Nuclear energy still only accounts for 1.3% of China’s national energy needs (Fig. 2). As one of the largest developing countries, the Chinese government began to develop nuclear energy in the 1980s. At the end of 1991, QNNP (Qinshan Nuclear Power Plant) was put into operation, and nuclear energy consumption in China increased slowly during the twentieth century. However, nuclear energy consumption in China has soared 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year and continued to rise fast this century, from 4.0 Mtoe (in 2001) to 38.6 Mtoe (in 2015) (Fig. 3), with an average Fig. 3 History of China’s energy consumption by different fuel annual growth rate of 17.6%. types, 1965–2015. Data source BP Statistical Review of World Energy (2016) and NBS China Statistical Yearbook (2015) 2.1.5 Renewables increasing economic growth, improved quality of life and the booming development of automobile and aviation The first account of renewable electricity consumption in industry, total oil consumption in China has increased China dated back to the 1950s, and nationwide develop- rapidly. The share of oil in total energy consumed has ment of renewable electricity started at the end of the gradually increased, from 8.3% (in 1965) to 18.6% (in 1970s and especially after the reform and opening-up in 2015) (Fig. 2). 1978 (Fang 2011). Generally speaking, renewable elec- tricity in China includes hydroelectric, wind, bioenergy, 2.1.3 Gas geothermal, solar and other renewables. The development of renewable electricity in China can Natural gas is an important energy source for power gen- be divided into four stages since 1973 (Hao 2013), i.e., eration, chemical feedstock, residential usage, etc. (Mohr starting stage (1973–1992), the preliminary stage of and Evans 2011). China possesses rich natural gas industrialization (1993–2004), fast developing stage resources, and Chinese authorities have estimated that the (2005–2009) and industrial-scale stage (2010–). Firstly, in TRR (technically recoverable resource) and URR (ulti- the 1970s, Chinese government began to develop renew- mately recoverable resources) of natural gas are 6.1 trillion able electricity in response to energy shortages, which were cubic meters (tcm) and 37 tcm, respectively (Hou et al. caused by the World Energy Crisis. Since then, renewable 2015; Zou et al. 2015). Although China is rich in gas electricity consumption in China increased gradually from resources, the domestic natural gas industry in China 8.3 Mtoe (in 1973) to 29.6 Mtoe (in 1992), with an average developed slowly during its industrialized period. In 2015, annual growth rate of 6.6%. Secondly, to accelerate the natural gas consumption in China was 177.6 Mtoe, development of renewable electricity, some initiatives and accounting for only 5.9% of the domestic energy needs laws were made by the government, e.g. China’s Agenda (Fig. 2). 21 (enacted in 1992), Developing Program of New Energy Recently, the government has begun to develop natural and Renewable electricity during 1996–2010 (in 1995) as gas as a partial substitute for coal, due to the problems from well as the Laws of Saving on Energy Resources in China high reliance on coal, such as air pollution, water con- (promulgated in 1998) (NBS 2015). In particular, China’s tamination and greenhouse gas emissions. Natural gas Agenda 21 became effective on March 25, 1994, signaling consumption in China has soared since the dawn of the China’s new energy and renewable electricity industry twenty-first century, from 24.7 Mtoe (in 2001) to stepped into the preliminary stage of industrialization. By 177.6 Mtoe (in 2015) (Fig. 3), with an average annual the end of 2004, the renewable electricity consumption in growth rate of 15.1%. China was 80.9 Mtoe, accounting for 5.5% of the national energy need. Thirdly, with the encouragement and support 2.1.4 Nuclear of the government, China’s new energy and renewable electricity industry has made significant breakthroughs in Considering the rising cost of oil and natural gas and the technology during the period of 2005–2009. Furthermore, enormous environmental pressure resulting from coal renewable electricity consumption in China increased Energy consumption, Mtoe Pet. Sci. (2017) 14:214–227 217 rapidly from 90.9 Mtoe (in 2005) to 146.2 Mtoe (in 2009) (Fig. 3), with an average annual growth rate of 10.0%. Transport Industry Lastly, in the industrial-scale stage, renewable electricity Building consumption in China has continued to rise fast, with the Other sector 2005 Electricity consumption of 319.5 Mtoe, accounting for 10.6% of the domestic energy needs by the end of 2015 (Fig. 2). In summary, the adjustment of China’s energy con- sumption structure is closely related to the stage of social development. The adjustment of China’s energy con- sumption by fuel type for the study period of 1965–2015 can be summarized as follows: The share of coal in total energy consumed has gradually declined, the share of oil has gradually increased, the share of natural gas has rapidly 1990 1995 2000 2005 2010 2013 Year increased, and the utilization of nuclear and renewables has rapidly increased. Hence, China’s energy consumption Fig. 4 Historical data of China’s energy consumption by different structure has displayed a diversified trend, and the share of sectors, 1990–2013. Data source BP Statistical Review of World clean energy has gradually increased. Energy (2016), IEA World Energy Outlook (WEO) (2015) and NBS China Statistical Yearbook (2015) 2.2 China’s energy consumption by sectors Plan’’ (Lin and Du 2015), much more clean fuels (e.g. gas According to the data of IEA, China’s energy consumption can be commonly divided into four energy-consuming end- and renewables) are used in China’s transportation sector. These three fuels (gas, electricity and renewables) use sectors, namely transport sector (TS), industry sector (IS), building sector (BS) and other sectors (OS). Notably, accounted for 5%, 2% and 1% of transportation energy need, respectively, in 2013; however, these shares are still although the electricity sector (ES) is not included in the low (Table 1). energy-consuming end-use sectors, it is essential to the industrialization and urbanization process, and indeed is an 2.2.2 Industry sector essential element to the transport, industry, building and other sectors of society (Dincer et al. 2012; Marton and In the industrialization stage of China, economic growth is Eddy 2012). dominated by the industry sector (Ouyang and Lin 2015). The importance of China’s industry sector is highlighted by 2.2.1 Transport sector its role in providing the massive employment opportunities and raw materials during the industrialization and urban- China is currently in the development stage of rapid urbanization (Lin and Du 2015), so the transportation ization process. With the rapid development of China’s industry sector, energy consumption by the industry sector sector accounts for a major share of energy consumption in has increased rapidly over the past two decades, rising from China, with about 8.2% of the total energy consumption in 245 Mtoe (in 1990) to 881 Mtoe (in 2013), and the share in 2013. Furthermore, in the period of 1990–2013, the energy China total energy consumed rose from 27.9% (in 1990) to demand of China’s transportation sector increased gradu- 29.0% (in 2013) (Fig. 4). Notably, a decrease in the ally from 34 Mtoe (in 1990) to 249 Mtoe (in 2013), with its industrial final energy use occurred during the period of share in the total energy consumed rising from 4.0% (in 1990) to 8.2% (in 2013) (Fig. 4). 1995–2000, primarily because ownership restructuring in China’s state industry was introduced (CEIC 2014). In addition, the most important component of energy used by the transportation sector is oil, and the oil demand Coal has dominated the energy consumption structure in China’s industry sector for a long time (Ouyang and Lin of the transportation sector increased from 71% (in 1990) to 91% (in 2013). In contrast, the share of coal in total 2015); however, the proportion of industrial final energy use decreased continuously from 74% (in 1990) to 54% (in transportation energy consumed dramatically decreased 2013). In the meantime, the energy demand of China’s from 29% (in 1990) to 1% (in 2013), simply because the industry sector for oil and gas is not massive, with the change from coal powered (steam) locomotives to diesel shares being 7% and 3% in 2013, respectively. In addition, and electric trains. Additionally, against the background of the proportion of energy consumed in electrical power China’s national energy conservation and emission reduc- generation increased dramatically from 17% (in 1990) to tion aims, especially in light of how to reach the emission reduction targets as put forward in the ‘‘12th Five Year 36% (in 2013) (Table 2). Energy consumption, Mtoe 218 Pet. Sci. (2017) 14:214–227 Table 1 Energy consumption Energy consumption, Mtoe Shares, % by transport sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 34 46 88 135 208 249 100 100 Coal 10 7 4 4 3 3 29 1 Oil 24 39 83 128 193 226 71 91 Gas 0 0 0 1 7 13 0 5 Electricity 0 0 1 2 4 5 0 2 Renewables 0 0 0 0 1 2 0 1 Table 2 Energy consumption Energy consumption, Mtoe Shares, % by industry sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 244 339 329 531 725 881 100 100 Coal 180 249 215 331 403 475 74 54 Oil 20 24 30 44 60 60 8 7 Gas 3 4 5101733 1 4 Electricity 41 62 78 146 245 313 17 36 2.2.3 Building sector 184 Mtoe (in 2013), with the percentage in the total energy consumed of around 6.1% (Fig. 4). As the second-largest energy consumer after the USA, Specifically, oil plays a key role in the energy losses in China is also the second-largest building energy consumer the sectors, and its share grew gradually from 41% (in worldwide (IEA 2015). Undoubtedly, energy consumption 1990) to 50% (in 2013). In the meantime, the energy losses associated with China’s building sector inevitably has of electricity and renewables have inevitably displayed an displayed an upward trend along with the industrialization upward trend, with their shares growing from 6% to 15% and urbanization process, and increased gradually from and 0% to 4%, respectively. Notably, a decrease in the 314 Mtoe (in 1990) to 506 Mtoe (in 2013); however, its share of coal occurred during the period of 1990–2013, share in the total energy consumed dropped from 35.7% (in primarily because of the accelerating cleaning process of 1990) to 16.7% (in 2013) (Fig. 4). In the building sector, coal (Table 4). energy is used for equipment, providing heating, cooling, lighting and other household needs (Zhang et al. 2015). 2.2.5 Electricity sector The energy types in BS have displayed a diversified trend. In the period of 1990–2013, the shares of oil, gas and Due to the large population, the rapid economic develop- electricity grew from 2% to 9%, 1% to 7% and 2% to 26%, ment, as well as the process of urbanization and industri- respectively. In contrast, the shares of coal and renewables alization, China has a much higher demand for electricity decreased from 29% to 15% and 66% to 43%, respectively than before (Shiu and Lam 2004; Yuan et al. 2007; Zhou (Table 3). et al. 2015). Energy consumption by China’s power sector has soared and continued to rise fast since 1990, from 2.2.4 Other sectors 181 Mtoe (in 1990) to 1218 Mtoe (in 2013), with its share in domestic total energy consumed rising from 20.6% (in Losses occur when the efficiency of a device or process 1990) to 40.1% (in 2013) (Fig. 4). deviates from the efficiency that would occur if the device Coal is overwhelmingly abundant and thermal power or process were ideal; and the low efficient heating system accounts for a large proportion in different power genera- leads to enormous energy loss (Bilgen 2014). Generally, tion methods in China, so it has always been the main the energy consumption by the other sectors mainly refers source of power generation. In 2013, it accounted for 86% to the energy losses in all the sectors (Dincer et al. 2012). of the power generation energy. Additionally, with the Undoubtedly, with the energy consumption increasing, development of micro grids, smart grids and smart energy- energy losses in all the sectors also increased rapidly over related concepts, techniques and systems, as well as the the past two decades, growing from 104 Mtoe (in 1990) to penetration of other energies, some unconventional power 123 Pet. Sci. (2017) 14:214–227 219 Table 3 Energy consumption Energy consumption, Mtoe Shares, % by the building sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 303 315 305 353 400 506 100 100 Coal 88 76 54 64 61 77 29 15 Oil 717192835 43 2 9 Gas 2 2 4 10 24 36 1 7 Electricity 6 16 25 48 78 132 2 26 Renewables 200 204 203 203 202 218 66 43 Table 4 Energy consumption Energy consumption, Mtoe Shares, % by the other sectors in China 1990 1995 2000 2005 2010 2013 1990 2013 during 1990–2013. Data source IEA WEO (2015) Total 83 91 94 145 195 184 100 100 Coal 40 34 31 45 51 47 48 26 Oil 34 45 48 71 94 93 41 50 Gas 434 7 10955 Electricity 5 8 10 19 30 28 6 15 Renewables 0 1 1 3 10 7 0 4 Table 5 Energy consumption Energy consumption, Mtoe Shares, % of power generation in China 1990 1995 2000 2005 2010 2013 1990 2013 during 1990–2013. Data source IEA WEO (2015) Total 181 275 360 682 1004 1218 100 100 Coal 153 241 314 605 884 1047 85 86 Oil 16 13 16 18 9 5 8 0 Gas 115 720 27 1 2 Nuclear 0 3 4 14 19 29 0 2 Renewables 11 17 21 38 72 110 6 9 generation methods have been implemented in China, such can be used to track energy consumption, production and as the renewable electricity power (wind power, solar resource extraction in all the sectors (Chontanawat et al. photovoltaic and hydroelectric power, etc.) (Chang et al. 2014; Kemausuor et al. 2015). The aim of the model is to 2015; Yang and Shen 2013). Therefore, the share of analyze the effects of multiple factors on energy con- renewables in total power generation energy consumed sumption under different scenarios in an objective, quan- gradually increased from 6% (1990) to 9% (2013) titative and comprehensive way, to provide a reference for (Table 5). the policy makers and investors (Huang et al. 2011). As this paper is to study China’s energy consumption structure by the fuel types and sectors, the LEAP model was chosen 3 Methodology because (1) it allows users to build energy forecast systems based on existing energy demand and supply data, to pre- 3.1 China-LEAP model framework pare different long-run scenarios and to compare results with different scenarios (Ates 2015), (2) it has low initial In this methodology, the LEAP model is used as an energy data requirement and (3) it is free to use for developing accounting modeling tool to calculate China’s energy country researchers and government agencies. consumption. LEAP was developed by the Stockholm As Fig. 5 shows, a bottom-up accounting framework is Environmental Institute (SEI-US) (Schnaars 1987; Heaps established for China’s-LEAP model to estimate China’s 2002, 2012). Specifically, LEAP is a scenario-based energy energy consumption structure. From the perspective of the environment modeling tool for energy policy analysis and key drivers of energy use, seven key factors are considered 123 220 Pet. Sci. (2017) 14:214–227 Factor decomposition Energy consumption by sectors Fuel consumption Energy structure Population growth Transport Coal Energy consumption Coal; Oil; Gas; Electricity; Renewables (fuel types; sectors) Urbanization Industry Oil Coal; Oil; Gas; Electricity Building and vehicle stock Building Share of different fuel types Commodity production Gas Coal; Oil; Gas; Electricity; Renewables in total energy consumption Other sector GDP Coal; Oil; Gas; Electricity; Renewables Nuclear Income Electricity Share of different sectors in Coal; Oil; Gas; Nuclear; Renewables total energy consumption Renewables Energy intensity Fig. 5 Research framework for China-LEAP model in the analysis, namely population growth, urbanization, such as the WEO from IEA, the Statistical Review of building and vehicle stock, commodity production, GDP, World Energy from BP and the Annual Energy Outlook income and energy intensity. In terms of the energy con- (AEO) from the US Energy Information Administration sumption sectors, they are mainly distributed in TS, IS, BS, (EIA), while the real GDP data employed in our analysis OS and ES. Accordingly, fuel consumption considered in are obtained from the NBS and the energy consumption this study includes five types, namely coal, oil, gas, nuclear data are from IEA, BP, EIA, etc. In addition, to ensure and renewables. Considering the accessibility and appli- comparability after the data collection, data expressed in cability of data information, Eqs. (1), (2) and (3) describe the various units are converted to the same unit in this the calculation process employed in this study. paper; for example, energy consumption and GDP are X X expressed in Mtoe and billion yuan, respectively. Notably, EC ¼ EC ¼ EC ð1Þ r i;j j;r i j in order to calculate the future energy consumption, the LEAP model uses the 2013 energy consumption as the EC ¼ EC ð2Þ i;j i;j;r baseline, and the energy consumption projection is done from 2015 to 2040. EC ¼ EC ð3Þ j;r i;j;r EC i;r 3.2 Scenario examination a ¼ ð4Þ EC 3.2.1 Current policies scenario (CPS) EC j;r b ¼ ð5Þ EC The CPS follows those policies and implemented measures where, EC is the total primary energy consumption in year which have been formally adopted; however, the policy r (Mtoe); EC is the total energy consumption of type i;r adjustment effect on the CPS is limited. Since the CPS i fuel in year r (Mtoe); EC is the total energy consump- j;r reflects what is expected to happen in terms of the policies tion of the sector j in year r (Mtoe); EC is the energy i;j;r and implemented measures, it is used as the reference consumption of type i fuel in the sector j in year r (Mtoe); scenario for evaluating China’s energy consumption a is the share of type i fuel in the total energy consumption structure. Additionally, the assumptions of the key factors in year r (%);b is the share of the sector j in the total adopted for the CPS specified by the different sectors are energy consumption in year r (%). shown in Table 6. The LEAP model consists of three blocks of programs, i.e., database, aggregation and scenarios (Shin et al. 2005). 3.2.2 Moderate policies scenario (MPS) The LEAP model is based on exogenous input of the main parameters and factors (Perwez et al. 2015). In the LEAP The MPS assumes that policies and implemented measures model, the data set consists of various factors such as have begun to affect China’s energy markets, together with population growth, urbanization, GDP and energy inten- the successful improvement of energy efficiency. However, sity. To ensure the reliability of data, we have compiled the relevant policies and specific measures need to be put data from (1) the available published literature, (2) the into effect in this scenario. The assumptions of the key national official reports released by China’s authorities factors for the MPS specified by the different sectors are such as NBS and (3) the international institutes’ reports given in Table 7. 123 Pet. Sci. (2017) 14:214–227 221 Table 6 Key assumptions of the CPS for all the sectors Sectors Key assumptions TS Efficiency improvements in fuel economy are limited; Subsidies for hybrid and electric vehicles; Promotion of fuel-efficient cars; Cap on passenger light-duty vehicles (PLDV) sales in some cities IS Small plant closures and phasing out of outdated production capacity; Mandatory adoption of coke dry quenching and top-pressure turbines BS Application for construction conservation design standards OS Compared with 2013, the growth rate of energy losses will be below 20% in 2020 ES 40 GW of new nuclear plants by 2050; Reaching 290 GW of installed hydro-capacity, 100 GW to wind, 35 GW to solar by 2015 Table 7 Key assumptions of the MPS for all the sectors Sectors Key assumptions TS Fuel economy target for PLDVs: 6.9 L/100 km by 2015, 5.0 L/100 km by 2020 IS Contain the expansion of energy-intensive industries; Implementation of CO pricing since 2020; Reduction in industrial energy intensity by 21% during 2011–2015 BS Share of energy efficient building is 30% by 2020; Implementation of energy price policy, such as reform heating price; Introduction of energy standards; All fossil-fuel subsidies are phased out by 2020 OS Compared with 2013, the growth rate of energy losses will be below 10% in 2020 ES 58 GW of nuclear capacity, 200 GW of wind, 100 GW of solar PV and 30 GW of bioenergy by 2020; Implementation of CO pricing after 2020 Table 8 Key assumptions of the SPS for all the sectors Sectors Key assumptions TS Compared with 2010, 55% efficiency improvements by 2040 and support for the use of biofuels; Enhanced support to alternative fuels IS Introducing the CO pricing by 2020; Enhanced energy efficiency standards; Support the introduction of CCS BS 95% of new building achieve saving of 55%–65% in space heating compared to 1980 OS Compared with 2013, the growth rate of energy losses will be below 5% in 2020 ES Higher CO pricing; Enhanced support for renewables; Continued support to nuclear capacity additions post-2020; Deployment of CCS from around 2020 3.2.3 Strong policies scenario (SPS) sectors, energy consumption by the fuel types and total energy consumption. Compared with the other scenarios, the SPS sets out a much more aggressive energy pathway, which is consistent 4.1.1 Energy consumption by sectors with stronger energy efficiency policies. Furthermore, this scenario assumes more vigorous policy actions are to be The results of China’s energy consumption by different implemented after 2020. The assumptions of the key fac- sectors under the three scenarios are shown in Figs. 6, 7 tors for the SPS specified by the different sectors are shown and 8, respectively. Figure 6 presents the energy con- in Table 8. sumption of different sectors under the CPS in 2010–2040. The energy consumption of the different sectors (TS, IS, BS, OS and ES) under the CPS will maintain the rising 4 Results and discussion trend, reaching 600, 1253, 625, 393 and 2606 Mtoe, respectively, in 2040. However, as shown in Table 9, the 4.1 Results growth rates of energy consumption by the different sectors under CPS will drop during the 2000–2040 period. For Based on the three scenarios introduced in Sect. 3.2, the example, the growth of energy consumption by the TS future energy consumption structure of China is estab- under the CPS will be 10.0%, 6.2%, 4.6% and 1.3% during lished, as presented in the energy consumption by the the ten-year periods from 2000 to 2040. 123 222 Pet. Sci. (2017) 14:214–227 As shown in Fig. 6, IS takes the dominating share of the History Future project total primary energy consumption under the CPS all the Transport Industry way through 2040, although the share will decrease from Building 27.5% in 2010 to 22.9% in 2040. Meanwhile, BS and OS Other sector Electricity have inevitably displayed a downward trend, with their shares decreasing from 17.4% (in 2010) to 11.4% (in 2040) and 9.3% (in 2010) to 7.2% (in 2040), respectively. Notably, although the energy consumption of the TS is not high, its share will increase from 7.1% in 2010 to 11.0% in Figure 7 presents the energy consumption of different sectors under the MPS in 2010–2040. Compared with the CPS, energy consumption in the different sectors (TS, IS, 2010 2015 2020 2030 2040 Year BS, OS and ES) under the MPS will decrease, reaching 559, 1072, 580, 333 and 2337 Mtoe, respectively, in 2040. Fig. 6 Energy consumption of different sectors under the CPS in Moreover, as shown in Table 9, the growth of energy 2010–2040 consumption under MPS will be lower than that under CPS. Notably, the growth of the energy consumption in the IS under the MPS will be -0.4% during the 2030–2040 period. The main reason is that policies and implemented History Future project 2040 Transport 6000 2030 measures under the MPS will have begun to affect China’s Industry energy markets, together with the successful improvement Building Other sector of energy efficiency. Electricity In terms of the shares of the total primary energy con- sumption by different sectors under the MPS, IS still comprises the dominant share of the total primary energy consumption, maintaining its level at roughly 43.6% of the total primary energy consumption in 2040. BS is the sec- ond-largest energy-consuming end-use sector, with its share maintaining at around 22.8% of the total primary 0 energy consumption in 2040. The share of the total primary 2010 2015 2020 2030 2040 energy consumption by the TS will increase from 14.0% in Year 2012 to 22.0% in 2040. Although the share of the total primary energy consumption by the OS under the MPS will Fig. 7 Energy consumption of different sectors under the MPS in 2010–2040 keep rising, it will account for about 13.1% of the total primary energy consumption in 2040, lower than that under the CPS. Figure 8 presents the energy consumption of different History Future project 2040 Transport sectors under the SPS in 2010–2040. Compared with the Industry other scenarios, the policies and implemented measures Building Other sector under the SPS will be more aggressive and effective. Electricity Energy consumption by the different sectors (TS, IS, BS, OS and ES) under the SPS will be lower than that of the other two scenarios, reaching 5.3, 937, 490, 243 and 1850 Mtoe, respectively, in 2040. Furthermore, as shown in Table 9, the growth rates of energy consumption under the SPS will also be lower than that under the CPS and MPS. Specifically, the growth rates of energy consumption in the IS, BS and OS under the SPS will be negative during 2010 2015 2020 2030 2040 the 2030–2040 period. Year Additionally, as shown in Fig. 8, compared with the MPS, the shares of the total primary energy consumption Fig. 8 Energy consumption of different sectors under the SPS in by the IS and BS under the SPS will change slightly, 2010–2040 Energy consumption, Mtoe Energy consumption, Mtoe Energy consumption, Mtoe Pet. Sci. (2017) 14:214–227 223 Table 9 Growth rates of energy consumption in the different sectors under the three scenarios in 2000–2040 (%) CPS MPS SPS 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 TS 10.0 6.2 4.6 1.3 10.0 5.8 4.4 1 10.0 5.2 2.9 1.9 IS 9.2 4.1 1.4 0.7 9.2 3.9 1.0 -0.4 9.2 3.4 0.1 -0.6 BS 3.1 2.6 1.5 0.9 3.1 2.4 1.2 0.6 3.1 2.1 0.4 -0.2 OS 8.4 3.6 3.2 1.1 8.4 2.7 2.6 0.8 8.4 2.1 0.9 -0.5 ES 12.1 5.5 3.5 1.9 12.1 5.0 2.8 1.8 12.1 4.4 1.0 1.5 reaching 43.1% and 22.5% in 2040. Meanwhile, with more 6000 Coal Oil effective measures implemented, the share of the total Gas 2030 5000 Nuclear primary energy consumption by the TS under the SPS will Renewables increase dramatically from 14.0% in 2012 to 22.0% in History Future project 2040. Moreover, the share of the total primary energy consumption by the OS under the MPS will decrease sig- nificantly, lower than that under the other scenarios, accounting for about 11.2% of the total primary energy consumption in 2040. 4.1.2 Energy consumption by fuel types China’s energy consumption by fuel type under the three 2010 2015 2020 2030 2040 scenarios is shown in Figs. 9, 10 and 11. Figure 9 shows Year the energy consumption of different fuel types (coal, oil, Fig. 9 Energy consumption of different fuel types under the CPS in gas, nuclear and renewables) under the CPS in 2010–2040. 2010–2040 The forecast result in Fig. 9 indicates that the energy consumption of the different fuel types under the CPS will Coal keep rising, reaching 2362, 785, 487, 284 and 549 Mtoe, Oil Gas respectively, in 2040. Generally, the growth rates of the 5000 Nuclear Renewables energy consumption by the different fuel types under the History 2020 Future project CPS will be decreasing during the every ten-year period 4000 from 2000 to 2040 (Table 10). Specifically, the growth rate 2010 of the coal consumption under the CPS will decrease dra- 3000 matically during the same period, namely 10.1%, 1.8%, 1.7% and 0.8%. Figure 9 also shows that coal makes up the dominant share of the total energy consumption under the CPS all the way to 2040, although the share will decrease from 68.8% in 2010 to 52.9% in 2040. The share of oil consumed in the 2010 2015 2020 2030 2040 total energy consumption will hover around 17.8%. Year Meanwhile, the shares of the total consumption of gas, Fig. 10 Energy consumption of different fuel types under the MPS in nuclear and renewables under CPS will keep rising, 2010–2040 reaching 10.9%, 6.4% and 12.3%, respectively, in 2040. Figure 10 shows the energy consumption of different fuel types under the MPS in 2010–2040. Compared with MPS will be higher than that of the CPS, reaching 502, 335 the CPS, energy consumption in the terms of coal and oil and 654 Mtoe, respectively, in 2040 (Fig. 10). In addition, under the MPS will be lower, reaching 1867 and 687 Mtoe, the growth rate of the gas, nuclear and renewables con- respectively, in 2040. Meanwhile, as shown in Table 10, sumption under the MPS will also be higher than that of the the growth rates of the coal and oil consumption under the CPS, reaching 3.1%, 4.0% and 1.8%, respectively, in 2040, MPS will be lower than that of the CPS. Furthermore, the offering more potential than the conventional fossil fuels consumption of gas, nuclear and renewables under the (coal and oil). Energy consumption, Mtoe Energy consumption, Mtoe 224 Pet. Sci. (2017) 14:214–227 Coal Oil Gas 5000 Nuclear 2030 Renewables History Future project 2010 2015 2020 2030 2040 Year Fig. 11 Energy consumption of different fuel types under the SPS in 2010–2040 Figure 10 also shows that although coal and oil account for 87.6% and 63.1% of the total energy consumption in 2010 and 2040, respectively, their shares under the MPS will keep a decreasing trend. In contrast, gas, nuclear and renewables would be a major alternative to coal and oil, with their shares increasing to 12.4%, 8.3% and 16.2%, respectively, in 2040. Figure 11 shows the energy consumption of different fuel types under the SPS in 2010–2040. Unlike the other two sce- narios, Fig. 11 shows a downward trend both in the coal and in oil consumption under the SPS over the period from 2015 to 2040, reaching 958 and 445 Mtoe, respectively, in 2040. Furthermore, the growth rates of the coal and oil consumption under the SPS will be lower than that of the CPS and MPS. The growth rate of coal consumption under the SPS will be 10.1%, 0.2%, -3.1% and -2.7% during the ten-year periods from 2000 to 2040 (Table 10). Figure 11 showsanupwardtrend in the gas, nuclear and renewables consumption under the SPS over the period from 2015 to 2040, reaching 510, 529 and 879 Mtoe, respectively, in 2040. Table 10 shows that the growth rate of this section of energy consumption under the SPS will be lower than that of the other scenarios. Figure 11 also shows that coal and oil no longer com- prise the dominant share of the total energy consumption under the SPS in 2040, with their total shares standing at 45.0%. Moreover, with more aggressive energy efficiency policies and more vigorous policy action to be imple- mented, clean fuels (gas, nuclear and renewables) will keep an increasing trend, with their shares rising to 13.4%, 15.4% and 26.5%, respectively, in 2040. 4.1.3 Total energy consumption Figure 12 presents the total energy consumption in China under the different scenarios in 2010–2040. It can be seen Energy consumption, Mtoe Table 10 Growth rates of the energy consumption by different fuel types under the three scenarios in 2000–2040 (%) CPS MPS SPS 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 Coal 10.1 1.8 1.7 0.8 10.1 1.1 0.5 0.1 10.1 0.2 -3.1 -2.7 Oil 7.8 2.5 2.1 0.5 7.8 1.8 1.6 0.1 7.8 1.1 1.2 -2.1 Gas 17.8 9.7 6.0 3.0 17.8 9.9 6.1 3.1 17.8 10.6 6.3 3.2 Nuclear 17.4 22.8 7.2 3.9 17.4 23.3 8.9 4.0 17.4 24.6 11.1 5.8 Renewables 14.8 10.3 1.5 1.2 14.8 11.0 2.3 1.8 14.8 11.9 4.0 2.7 Pet. Sci. (2017) 14:214–227 225 (2010), our results in this work are initially conservative for the first decade under the scenario and then become more History Future project optimistic. In addition, even though the trends of the IEA’s predictions for the various scenarios were in line with those of our predictions; however, our predicted values were lower than those of the IEA for all three scenarios. The discrepancies between the IEA’s predictions and ours could be attributed to the following three reasons. Firstly, the IEA’s predictions are weighted heavily toward the 12th This work IEA Five year Plan set in 2011, which underestimated the rig- CPS MPS orous measures undertaken by the Chinese government for SPS improving energy efficiency and reducing environmental impacts achieved in 2015. Secondly, China is not one of 2010 2015 2020 2030 2040 Year the IEA’s 28-member countries. Hence, the IEA’s data sources were likely obtained through third parties and Fig. 12 Total energy consumption under different scenarios in might not reflect China’s current situation. Thirdly, there 2010–2040 are different assumptions used in this work and the IEA’s calculations for the three scenarios. that by 2040, the total energy consumption in China will Regarding the reduction potential of the energy con- still be increasing under most of the scenarios. Total energy sumption, there will be a maximum reduction of consumption will increase from 3016 Mtoe in 2015 to 1146 Mtoe of energy consumption under the SPS in 2040 4467 Mtoe in 2040 under the CPS. Compared with the compared with the CPS, and the SPS has much more CPS, it will decrease by 422 Mtoe to 4045 Mtoe in 2040 reduction potentials. However, compared with much more under the MPS, while it will decrease by 1146 Mtoe to aggressive energy efficiency policies under the SPS, the 3321 Mtoe in 2040 under the SPS. The average annual ongoing energy policies and measures in China show lower growth rates of the total energy consumption in China availabilities, efficiency and potentials. In this regard, some under the different scenarios (CPS, MPS and SPS) will be much more effective and advisable policies and measures 1.6%, 1.2% and 0.4%, respectively, over the period from should be put forward by the Chinese government. 2015 to 2040. However, our estimates in this work are all When the results shown in Figs. 6, 7, 8, 9, 10, 11 and 12 lower than the IEA’s ones. are studied together, it can be concluded that the clean fuels (gas, nuclear and renewables) could be major alternatives 4.2 Discussion to the conventional fossil fuels (coal and oil) and offer much more potential, accounting for 57.8% of the total Prediction results of China’s energy consumption by the energy consumption in 2040 under SPS, reaching transport sector (TS) in the present study and previous 1918 Mtoe. In terms of the energy consumption by the studies are shown in Table 11 for comparison purposes. As sectors, IS has much more reduction potential than the Table 11 shows, Ou et al. (2010) estimated Chinese TS other sectors. Compared with the CPS, the energy con- energy consumption in 2020, 2030 and 2040 to be 375, 479 sumption will be reduced by 316–937 Mtoe in 2040 under and 531 Mtoe, respectively, under the business as usual the SPS. Hence, policy makers should pay attention to the (BAU) scenario; and to be 350, 427 and 426 Mtoe, development of Chinese clean fuels and to the energy respectively, under the promoting electric vehicles (PEV) reduction in the IS. scenario. Compared with the values reported by Ou et al. Table 11 Chinese TS energy consumption estimated in the previous 5 Conclusions and policy implications studies (Mtoe) (Ou et al. 2010; IEA 2015) and in this work Ou et al. (2010) IEA (2015) This study 5.1 Policy implications BAU PEV CPS NPS 450 CPS MPS SPS From the comprehensive analysis and discussion carried 2020 375 350 348 346 336 357 345 329 out above, we obtain the following policy implications: 2030 479 427 482 465 414 535 509 425 First, it will be necessary to incorporate consideration of 2040 531 426 564 520 428 600 559 503 the adjustment of energy consumption structure into the industrialization and urbanization process. Currently, The figures in BAU and PEV are estimated through the results compared with energy consumption, the government gives calculated by Ou et al. (2010) Energy consumption, Mtoe 226 Pet. Sci. (2017) 14:214–227 high priority to energy production and ignores the impor- (2) From the perspective of energy consumption by the tance of adjustment of energy consumption structure. fuel types, coal and oil take the dominant share of Hence, it is essential that in future the government should the total energy consumption under the three consider energy consumption structure from a strategic scenarios all the way to 2040; however, the share will maintain a decreasing trend. In contrast, clean height and long-term perspective, adjusting the energy development strategy according to the adjustment of fuels will reach 1918 Mtoe, accounting for 57.8% of the total energy consumption in 2040 under the SPS. energy consumption structure. Second, it is critical to establish and perfect the related Therefore, the clean fuels will offer more develop- ment potential than conventional fossil fuels in the policies and measures. This is the most important measure, chiefly because the China’s energy market has experienced future. a lack of more aggressive energy efficiency policies and (3) From the perspective of the total energy consump- more vigorous policy actions for decades. For example, the tion, China’s total energy consumption will increase resource tax in China’s energy market has been compre- continuously in all scenarios from 2015 to 2040. hensively introduced. However, the stringency level of the Specifically, the total energy consumption will resource tax has generally lagged behind that of developed increase from 3016 Mtoe in 2015 to 4467 Mtoe in 2040 under the CPS, 4045 Mtoe in 2040 under the countries. Furthermore, it is difficult to implement some energy market policies and measures in China. CPS and 3321 Mtoe in 2040 under the CPS, respectively. It is notable that our estimates are all Third, more focus should be laid on the development of clean fuels and energy reduction in the IS. In order to lower than the IEA’s. promote the development of clean fuels, the policy makers (4) From the perspective of the existing policies and should improve existing pricing and subsidy policies. measures, by analyzing the results under the three Besides, according to the adjustment of the energy con- scenarios, we can find that the effect of the policies sumption structure, the government should reasonably and measures under the CPS is poorer than those adjust the shares between the clean fuels and conventional under the MPS and SPS, which means that existing policies and measures show lower availabilities, fossil fuels. Furthermore, the government and enterprises should pay attention to the structural energy saving espe- efficiency and potentials. cially of the IS. In summary, compared with that of the developed countries, China’s energy consumption structure still needs 5.2 Conclusions the further improvement and adjustment. As a result, the Chinese government should incorporate consideration of In this study, to forecast China’s energy consumption the adjustment of energy consumption structure into structure in the future, we first present a comprehensive and existing energy policies and measures. systematic review of the development status of China’s energy consumption structure by the fuel types from 1990 Acknowledgements This study is supported by National Natural to 2015 and the sectors from 1990 to 2013. Then, under the Science Foundation (No. 71273277) and National Social Science Foundation (No. 13&ZD159). The authors appreciate the helpful CPS, MPS and SPS, a bottom-up accounting framework reviews and comments by the anonymous reviewers. was developed and the LEAP model was used to forecast the China’s energy consumption structure from 2015 to Open Access This article is distributed under the terms of the Creative 2040. 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A review of China’s energy consumption structure and outlook based on a long-range energy alternatives modeling tool

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Earth Sciences; Mineral Resources; Industrial Chemistry/Chemical Engineering; Industrial and Production Engineering; Energy Economics
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Pet. Sci. (2017) 14:214–227 DOI 10.1007/s12182-016-0136-z OR IGINAL PAPER A review of China’s energy consumption structure and outlook based on a long-range energy alternatives modeling tool 1,2 1 1,3 1 • • • Kang-Yin Dong Ren-Jin Sun Hui Li Hong-Dian Jiang Received: 19 June 2016 / Published online: 17 December 2016 The Author(s) 2016. This article is published with open access at Springerlink.com Abstract China’s energy consumption experienced rapid consumption structure into existing energy policies and growth over the past three decades, raising great concerns measures in the future. for the future adjustment of China’s energy consumption structure. This paper first presents the historical evidence Keywords Energy consumption structure  China-LEAP on China’s energy consumption by the fuel types and model  Scenario analysis  Clean fuels  Industrial sector sectors. Then, by establishing a bottom-up accounting framework and using long-range energy alternatives plan- ning energy modeling tool, the future of China’s energy 1 Introduction consumption structure under three scenarios is forecast. According to the estimates, China’s total energy con- Energy is essential for economic and social development sumption will increase from 3014 million tonnes oil and the improvement of life in all the countries (Bilgen equivalent (Mtoe) in 2015 to 4470 Mtoe in 2040 under the 2014). Energy consumption is a key lever to achieve more current policies scenario, 4040 Mtoe in 2040 under the rapid development (Rennings et al. 2012). Most scholars moderate policies scenario and 3320 Mtoe in 2040 under claimed that there is a strong relationship between China’s the strong policies scenario, respectively, lower than those energy consumption and economic growth (Li et al. 2014; of the IEA’s estimations. In addition, the clean fuels (gas, Liao and Wei 2010; Zhang et al. 2011). China’s energy nuclear and renewables) could be an effective alternative to consumption has increased dramatically since 2000 and is the conventional fossil fuels (coal and oil) and offer much forecast to keep rising in the next several decades due to more potential. Furthermore, the industry sector has much continuous economic growth. In the statistics of Interna- strong reduction potentials than the other sectors. Finally, tional Energy Agency (IEA), BP and the National Bureau this paper suggests that the Chinese government should of Statistics of China (NBS) (IEA 2015;BP 2016; NBS incorporate consideration of adjustment of the energy 2015), China’s energy consumption increased from 131 million tonnes oil equivalent (Mtoe) (in 1965) to 3014 Mtoe (in 2015), with the GDP increasing from 172 billion yuan (in 1965) to 67,670 billion yuan (in 2015) & Ren-Jin Sun (Fig. 1). sunrenjin@cup.edu.cn In China, the primary energy consumption includes five School of Business Administration, China University of types, i.e., coal, oil, gas, nuclear and renewables, which are Petroleum-Beijing, 102249 Beijing, China mainly used in the four sectors, i.e., transport, industry, Department of Agricultural, Food and Resource Economics, building and others (Bilgen 2014). The China’s 12th Five Rutgers, State University of New Jersey, New Brunswick, Year Plan set an ambitious goal, for which the adjustment NJ 08901, USA of energy consumption structure should make significant Energy Systems Research Center, University of Texas at progress during the 2011–2015 period. Thus, a number of Arlington, Arlington, TX 76019, USA studies have focused on China’s energy consumption structure such as new energy development, energy Edited by Xiu-Qin Zhu 123 Pet. Sci. (2017) 14:214–227 215 (Fig. 2), coal has long been the dominant fuel type in Total primary energy consumption GDP China, soaring from 114 Mtoe (in 1965) to 1920 Mtoe (in 2015) (Fig. 3). Specifically, despite the increased economic growth and a continuous increase in China’s coal con- sumption in 1965–1978, the share of coal in the total energy consumption gradually decreased from 87.1% to 71.3%. After the introduction of the reform and opening-up policy, the consumption of coal in China has increased rapidly from 283 Mtoe (in 1978) to 664 Mtoe (in 1995). Following that, with the adjustment of energy consumption 0 structure in 1995–2001 and the supply of coal being tightly 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 limited in China, the share of coal in the total energy Year consumption has fallen gradually. However, China’s actual Fig. 1 Total energy consumption and GDP in China. Data source BP coal consumption has increased dramatically since the turn Statistical Review of World Energy (2016) and NBS China Statistical of the millennium, considered as a result of rapid economic Yearbook (2015) development, urbanization, energy shortages, etc. The conservation and the improvement of energy efficiency consumption of coal increased from 679 Mtoe (in 2000) to (Lin and Wang 2015; Peng et al. 2015; Weidou and 1920 Mtoe (in 2015), with an average annual growth rate Johansson 2004). We need to consider China’s energy of 7.2% (Fig. 3). consumption structure in the past, present and future. What energy plan should be worked out to guarantee the goal of 2.1.2 Oil the adjustment of energy consumption structure, as set by the State (China) for the 13th Five Year Plan, is achieved? In China, oil is one of the important primary energy These issues must be carefully solved before the energy sources and has a strategic role in promoting economic strategies and policies are formulated. Hence, a review of growth. Since it initiated an economic reform program in China’s energy consumption structure and outlook is 1978, China has witnessed rapid economic growth and an valuable and may provide a guideline for policy-making. improved living standard (Zheng and Luo 2013). Mean- The major aims of this paper are (1) to present a compre- while, oil consumption in China increased rapidly from hensive and systematic investigation of China’s energy con- 91 Mtoe (in 1978) to 560 Mtoe (in 2015) (Fig. 3), with an sumption structure from the point of view of fuel types and average annual growth of 5.0%. However, China in not rich sectors, (2) to analyze China’s energy consumption structure in oil resources, and its oil reserves account for only 2% of in the future under three scenarios, by using the bottom-up the world oil reserves. Hence, China is highly reliant on the accounting framework and LEAP (Stockholm Environment oil imports, and about 61% of oil consumption was Institute, SEI 2014) energy modeling tool and (3) to describe imported in 2015 (NBS 2015). Moreover, China became a the results and also propose policy suggestions. net importer of crude oil in 1993, and the world’s second- largest oil consumer in 2002. Since the early 1990s, with 2 A review of China’s energy consumption Coal structure Oil Gas 2.1 China’s energy consumption by fuel types Nuclear Renewables 2.1.1 Coal Since the foundation of the People’s Republic of China, China’s energy has primarily come from coal (Govindaraju and Tang 2013). In comparison with oil and natural gas, coal is overwhelmingly abundant and more widely dis- tributed in China. Therefore, coal is the principal energy Year source in China and it is given a strategic role in the eco- nomic growth of the country (Li and Leung 2012). Fig. 2 Percentage of China’s energy consumption structure by fuel Although the share of coal in the total energy consumption types, 1965–2015. Data source BP Statistical Review of World has fallen from 87.1% (in 1965) to 63.7% (in 2015) Energy (2016) and NBS China Statistical Yearbook (2015) Total primary energy consumption, Mtoe GDP, Billion yuan Percentage, % 2015 216 Pet. Sci. (2017) 14:214–227 consumption, nuclear energy is an inevitable strategic Coal Oil option for China (Zhou and Zhang 2010). By the end of Gas 2013, there were 17 nuclear power units in commercial Nuclear Renewables operation in China (CNEA 2014; NRDC 2014), with pro- duction of 38.6 Mtoe (in 2015). Nuclear energy still only accounts for 1.3% of China’s national energy needs (Fig. 2). As one of the largest developing countries, the Chinese government began to develop nuclear energy in the 1980s. At the end of 1991, QNNP (Qinshan Nuclear Power Plant) was put into operation, and nuclear energy consumption in China increased slowly during the twentieth century. However, nuclear energy consumption in China has soared 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year and continued to rise fast this century, from 4.0 Mtoe (in 2001) to 38.6 Mtoe (in 2015) (Fig. 3), with an average Fig. 3 History of China’s energy consumption by different fuel annual growth rate of 17.6%. types, 1965–2015. Data source BP Statistical Review of World Energy (2016) and NBS China Statistical Yearbook (2015) 2.1.5 Renewables increasing economic growth, improved quality of life and the booming development of automobile and aviation The first account of renewable electricity consumption in industry, total oil consumption in China has increased China dated back to the 1950s, and nationwide develop- rapidly. The share of oil in total energy consumed has ment of renewable electricity started at the end of the gradually increased, from 8.3% (in 1965) to 18.6% (in 1970s and especially after the reform and opening-up in 2015) (Fig. 2). 1978 (Fang 2011). Generally speaking, renewable elec- tricity in China includes hydroelectric, wind, bioenergy, 2.1.3 Gas geothermal, solar and other renewables. The development of renewable electricity in China can Natural gas is an important energy source for power gen- be divided into four stages since 1973 (Hao 2013), i.e., eration, chemical feedstock, residential usage, etc. (Mohr starting stage (1973–1992), the preliminary stage of and Evans 2011). China possesses rich natural gas industrialization (1993–2004), fast developing stage resources, and Chinese authorities have estimated that the (2005–2009) and industrial-scale stage (2010–). Firstly, in TRR (technically recoverable resource) and URR (ulti- the 1970s, Chinese government began to develop renew- mately recoverable resources) of natural gas are 6.1 trillion able electricity in response to energy shortages, which were cubic meters (tcm) and 37 tcm, respectively (Hou et al. caused by the World Energy Crisis. Since then, renewable 2015; Zou et al. 2015). Although China is rich in gas electricity consumption in China increased gradually from resources, the domestic natural gas industry in China 8.3 Mtoe (in 1973) to 29.6 Mtoe (in 1992), with an average developed slowly during its industrialized period. In 2015, annual growth rate of 6.6%. Secondly, to accelerate the natural gas consumption in China was 177.6 Mtoe, development of renewable electricity, some initiatives and accounting for only 5.9% of the domestic energy needs laws were made by the government, e.g. China’s Agenda (Fig. 2). 21 (enacted in 1992), Developing Program of New Energy Recently, the government has begun to develop natural and Renewable electricity during 1996–2010 (in 1995) as gas as a partial substitute for coal, due to the problems from well as the Laws of Saving on Energy Resources in China high reliance on coal, such as air pollution, water con- (promulgated in 1998) (NBS 2015). In particular, China’s tamination and greenhouse gas emissions. Natural gas Agenda 21 became effective on March 25, 1994, signaling consumption in China has soared since the dawn of the China’s new energy and renewable electricity industry twenty-first century, from 24.7 Mtoe (in 2001) to stepped into the preliminary stage of industrialization. By 177.6 Mtoe (in 2015) (Fig. 3), with an average annual the end of 2004, the renewable electricity consumption in growth rate of 15.1%. China was 80.9 Mtoe, accounting for 5.5% of the national energy need. Thirdly, with the encouragement and support 2.1.4 Nuclear of the government, China’s new energy and renewable electricity industry has made significant breakthroughs in Considering the rising cost of oil and natural gas and the technology during the period of 2005–2009. Furthermore, enormous environmental pressure resulting from coal renewable electricity consumption in China increased Energy consumption, Mtoe Pet. Sci. (2017) 14:214–227 217 rapidly from 90.9 Mtoe (in 2005) to 146.2 Mtoe (in 2009) (Fig. 3), with an average annual growth rate of 10.0%. Transport Industry Lastly, in the industrial-scale stage, renewable electricity Building consumption in China has continued to rise fast, with the Other sector 2005 Electricity consumption of 319.5 Mtoe, accounting for 10.6% of the domestic energy needs by the end of 2015 (Fig. 2). In summary, the adjustment of China’s energy con- sumption structure is closely related to the stage of social development. The adjustment of China’s energy con- sumption by fuel type for the study period of 1965–2015 can be summarized as follows: The share of coal in total energy consumed has gradually declined, the share of oil has gradually increased, the share of natural gas has rapidly 1990 1995 2000 2005 2010 2013 Year increased, and the utilization of nuclear and renewables has rapidly increased. Hence, China’s energy consumption Fig. 4 Historical data of China’s energy consumption by different structure has displayed a diversified trend, and the share of sectors, 1990–2013. Data source BP Statistical Review of World clean energy has gradually increased. Energy (2016), IEA World Energy Outlook (WEO) (2015) and NBS China Statistical Yearbook (2015) 2.2 China’s energy consumption by sectors Plan’’ (Lin and Du 2015), much more clean fuels (e.g. gas According to the data of IEA, China’s energy consumption can be commonly divided into four energy-consuming end- and renewables) are used in China’s transportation sector. These three fuels (gas, electricity and renewables) use sectors, namely transport sector (TS), industry sector (IS), building sector (BS) and other sectors (OS). Notably, accounted for 5%, 2% and 1% of transportation energy need, respectively, in 2013; however, these shares are still although the electricity sector (ES) is not included in the low (Table 1). energy-consuming end-use sectors, it is essential to the industrialization and urbanization process, and indeed is an 2.2.2 Industry sector essential element to the transport, industry, building and other sectors of society (Dincer et al. 2012; Marton and In the industrialization stage of China, economic growth is Eddy 2012). dominated by the industry sector (Ouyang and Lin 2015). The importance of China’s industry sector is highlighted by 2.2.1 Transport sector its role in providing the massive employment opportunities and raw materials during the industrialization and urban- China is currently in the development stage of rapid urbanization (Lin and Du 2015), so the transportation ization process. With the rapid development of China’s industry sector, energy consumption by the industry sector sector accounts for a major share of energy consumption in has increased rapidly over the past two decades, rising from China, with about 8.2% of the total energy consumption in 245 Mtoe (in 1990) to 881 Mtoe (in 2013), and the share in 2013. Furthermore, in the period of 1990–2013, the energy China total energy consumed rose from 27.9% (in 1990) to demand of China’s transportation sector increased gradu- 29.0% (in 2013) (Fig. 4). Notably, a decrease in the ally from 34 Mtoe (in 1990) to 249 Mtoe (in 2013), with its industrial final energy use occurred during the period of share in the total energy consumed rising from 4.0% (in 1990) to 8.2% (in 2013) (Fig. 4). 1995–2000, primarily because ownership restructuring in China’s state industry was introduced (CEIC 2014). In addition, the most important component of energy used by the transportation sector is oil, and the oil demand Coal has dominated the energy consumption structure in China’s industry sector for a long time (Ouyang and Lin of the transportation sector increased from 71% (in 1990) to 91% (in 2013). In contrast, the share of coal in total 2015); however, the proportion of industrial final energy use decreased continuously from 74% (in 1990) to 54% (in transportation energy consumed dramatically decreased 2013). In the meantime, the energy demand of China’s from 29% (in 1990) to 1% (in 2013), simply because the industry sector for oil and gas is not massive, with the change from coal powered (steam) locomotives to diesel shares being 7% and 3% in 2013, respectively. In addition, and electric trains. Additionally, against the background of the proportion of energy consumed in electrical power China’s national energy conservation and emission reduc- generation increased dramatically from 17% (in 1990) to tion aims, especially in light of how to reach the emission reduction targets as put forward in the ‘‘12th Five Year 36% (in 2013) (Table 2). Energy consumption, Mtoe 218 Pet. Sci. (2017) 14:214–227 Table 1 Energy consumption Energy consumption, Mtoe Shares, % by transport sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 34 46 88 135 208 249 100 100 Coal 10 7 4 4 3 3 29 1 Oil 24 39 83 128 193 226 71 91 Gas 0 0 0 1 7 13 0 5 Electricity 0 0 1 2 4 5 0 2 Renewables 0 0 0 0 1 2 0 1 Table 2 Energy consumption Energy consumption, Mtoe Shares, % by industry sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 244 339 329 531 725 881 100 100 Coal 180 249 215 331 403 475 74 54 Oil 20 24 30 44 60 60 8 7 Gas 3 4 5101733 1 4 Electricity 41 62 78 146 245 313 17 36 2.2.3 Building sector 184 Mtoe (in 2013), with the percentage in the total energy consumed of around 6.1% (Fig. 4). As the second-largest energy consumer after the USA, Specifically, oil plays a key role in the energy losses in China is also the second-largest building energy consumer the sectors, and its share grew gradually from 41% (in worldwide (IEA 2015). Undoubtedly, energy consumption 1990) to 50% (in 2013). In the meantime, the energy losses associated with China’s building sector inevitably has of electricity and renewables have inevitably displayed an displayed an upward trend along with the industrialization upward trend, with their shares growing from 6% to 15% and urbanization process, and increased gradually from and 0% to 4%, respectively. Notably, a decrease in the 314 Mtoe (in 1990) to 506 Mtoe (in 2013); however, its share of coal occurred during the period of 1990–2013, share in the total energy consumed dropped from 35.7% (in primarily because of the accelerating cleaning process of 1990) to 16.7% (in 2013) (Fig. 4). In the building sector, coal (Table 4). energy is used for equipment, providing heating, cooling, lighting and other household needs (Zhang et al. 2015). 2.2.5 Electricity sector The energy types in BS have displayed a diversified trend. In the period of 1990–2013, the shares of oil, gas and Due to the large population, the rapid economic develop- electricity grew from 2% to 9%, 1% to 7% and 2% to 26%, ment, as well as the process of urbanization and industri- respectively. In contrast, the shares of coal and renewables alization, China has a much higher demand for electricity decreased from 29% to 15% and 66% to 43%, respectively than before (Shiu and Lam 2004; Yuan et al. 2007; Zhou (Table 3). et al. 2015). Energy consumption by China’s power sector has soared and continued to rise fast since 1990, from 2.2.4 Other sectors 181 Mtoe (in 1990) to 1218 Mtoe (in 2013), with its share in domestic total energy consumed rising from 20.6% (in Losses occur when the efficiency of a device or process 1990) to 40.1% (in 2013) (Fig. 4). deviates from the efficiency that would occur if the device Coal is overwhelmingly abundant and thermal power or process were ideal; and the low efficient heating system accounts for a large proportion in different power genera- leads to enormous energy loss (Bilgen 2014). Generally, tion methods in China, so it has always been the main the energy consumption by the other sectors mainly refers source of power generation. In 2013, it accounted for 86% to the energy losses in all the sectors (Dincer et al. 2012). of the power generation energy. Additionally, with the Undoubtedly, with the energy consumption increasing, development of micro grids, smart grids and smart energy- energy losses in all the sectors also increased rapidly over related concepts, techniques and systems, as well as the the past two decades, growing from 104 Mtoe (in 1990) to penetration of other energies, some unconventional power 123 Pet. Sci. (2017) 14:214–227 219 Table 3 Energy consumption Energy consumption, Mtoe Shares, % by the building sector in China during 1990–2013. Data source 1990 1995 2000 2005 2010 2013 1990 2013 IEA WEO (2015) Total 303 315 305 353 400 506 100 100 Coal 88 76 54 64 61 77 29 15 Oil 717192835 43 2 9 Gas 2 2 4 10 24 36 1 7 Electricity 6 16 25 48 78 132 2 26 Renewables 200 204 203 203 202 218 66 43 Table 4 Energy consumption Energy consumption, Mtoe Shares, % by the other sectors in China 1990 1995 2000 2005 2010 2013 1990 2013 during 1990–2013. Data source IEA WEO (2015) Total 83 91 94 145 195 184 100 100 Coal 40 34 31 45 51 47 48 26 Oil 34 45 48 71 94 93 41 50 Gas 434 7 10955 Electricity 5 8 10 19 30 28 6 15 Renewables 0 1 1 3 10 7 0 4 Table 5 Energy consumption Energy consumption, Mtoe Shares, % of power generation in China 1990 1995 2000 2005 2010 2013 1990 2013 during 1990–2013. Data source IEA WEO (2015) Total 181 275 360 682 1004 1218 100 100 Coal 153 241 314 605 884 1047 85 86 Oil 16 13 16 18 9 5 8 0 Gas 115 720 27 1 2 Nuclear 0 3 4 14 19 29 0 2 Renewables 11 17 21 38 72 110 6 9 generation methods have been implemented in China, such can be used to track energy consumption, production and as the renewable electricity power (wind power, solar resource extraction in all the sectors (Chontanawat et al. photovoltaic and hydroelectric power, etc.) (Chang et al. 2014; Kemausuor et al. 2015). The aim of the model is to 2015; Yang and Shen 2013). Therefore, the share of analyze the effects of multiple factors on energy con- renewables in total power generation energy consumed sumption under different scenarios in an objective, quan- gradually increased from 6% (1990) to 9% (2013) titative and comprehensive way, to provide a reference for (Table 5). the policy makers and investors (Huang et al. 2011). As this paper is to study China’s energy consumption structure by the fuel types and sectors, the LEAP model was chosen 3 Methodology because (1) it allows users to build energy forecast systems based on existing energy demand and supply data, to pre- 3.1 China-LEAP model framework pare different long-run scenarios and to compare results with different scenarios (Ates 2015), (2) it has low initial In this methodology, the LEAP model is used as an energy data requirement and (3) it is free to use for developing accounting modeling tool to calculate China’s energy country researchers and government agencies. consumption. LEAP was developed by the Stockholm As Fig. 5 shows, a bottom-up accounting framework is Environmental Institute (SEI-US) (Schnaars 1987; Heaps established for China’s-LEAP model to estimate China’s 2002, 2012). Specifically, LEAP is a scenario-based energy energy consumption structure. From the perspective of the environment modeling tool for energy policy analysis and key drivers of energy use, seven key factors are considered 123 220 Pet. Sci. (2017) 14:214–227 Factor decomposition Energy consumption by sectors Fuel consumption Energy structure Population growth Transport Coal Energy consumption Coal; Oil; Gas; Electricity; Renewables (fuel types; sectors) Urbanization Industry Oil Coal; Oil; Gas; Electricity Building and vehicle stock Building Share of different fuel types Commodity production Gas Coal; Oil; Gas; Electricity; Renewables in total energy consumption Other sector GDP Coal; Oil; Gas; Electricity; Renewables Nuclear Income Electricity Share of different sectors in Coal; Oil; Gas; Nuclear; Renewables total energy consumption Renewables Energy intensity Fig. 5 Research framework for China-LEAP model in the analysis, namely population growth, urbanization, such as the WEO from IEA, the Statistical Review of building and vehicle stock, commodity production, GDP, World Energy from BP and the Annual Energy Outlook income and energy intensity. In terms of the energy con- (AEO) from the US Energy Information Administration sumption sectors, they are mainly distributed in TS, IS, BS, (EIA), while the real GDP data employed in our analysis OS and ES. Accordingly, fuel consumption considered in are obtained from the NBS and the energy consumption this study includes five types, namely coal, oil, gas, nuclear data are from IEA, BP, EIA, etc. In addition, to ensure and renewables. Considering the accessibility and appli- comparability after the data collection, data expressed in cability of data information, Eqs. (1), (2) and (3) describe the various units are converted to the same unit in this the calculation process employed in this study. paper; for example, energy consumption and GDP are X X expressed in Mtoe and billion yuan, respectively. Notably, EC ¼ EC ¼ EC ð1Þ r i;j j;r i j in order to calculate the future energy consumption, the LEAP model uses the 2013 energy consumption as the EC ¼ EC ð2Þ i;j i;j;r baseline, and the energy consumption projection is done from 2015 to 2040. EC ¼ EC ð3Þ j;r i;j;r EC i;r 3.2 Scenario examination a ¼ ð4Þ EC 3.2.1 Current policies scenario (CPS) EC j;r b ¼ ð5Þ EC The CPS follows those policies and implemented measures where, EC is the total primary energy consumption in year which have been formally adopted; however, the policy r (Mtoe); EC is the total energy consumption of type i;r adjustment effect on the CPS is limited. Since the CPS i fuel in year r (Mtoe); EC is the total energy consump- j;r reflects what is expected to happen in terms of the policies tion of the sector j in year r (Mtoe); EC is the energy i;j;r and implemented measures, it is used as the reference consumption of type i fuel in the sector j in year r (Mtoe); scenario for evaluating China’s energy consumption a is the share of type i fuel in the total energy consumption structure. Additionally, the assumptions of the key factors in year r (%);b is the share of the sector j in the total adopted for the CPS specified by the different sectors are energy consumption in year r (%). shown in Table 6. The LEAP model consists of three blocks of programs, i.e., database, aggregation and scenarios (Shin et al. 2005). 3.2.2 Moderate policies scenario (MPS) The LEAP model is based on exogenous input of the main parameters and factors (Perwez et al. 2015). In the LEAP The MPS assumes that policies and implemented measures model, the data set consists of various factors such as have begun to affect China’s energy markets, together with population growth, urbanization, GDP and energy inten- the successful improvement of energy efficiency. However, sity. To ensure the reliability of data, we have compiled the relevant policies and specific measures need to be put data from (1) the available published literature, (2) the into effect in this scenario. The assumptions of the key national official reports released by China’s authorities factors for the MPS specified by the different sectors are such as NBS and (3) the international institutes’ reports given in Table 7. 123 Pet. Sci. (2017) 14:214–227 221 Table 6 Key assumptions of the CPS for all the sectors Sectors Key assumptions TS Efficiency improvements in fuel economy are limited; Subsidies for hybrid and electric vehicles; Promotion of fuel-efficient cars; Cap on passenger light-duty vehicles (PLDV) sales in some cities IS Small plant closures and phasing out of outdated production capacity; Mandatory adoption of coke dry quenching and top-pressure turbines BS Application for construction conservation design standards OS Compared with 2013, the growth rate of energy losses will be below 20% in 2020 ES 40 GW of new nuclear plants by 2050; Reaching 290 GW of installed hydro-capacity, 100 GW to wind, 35 GW to solar by 2015 Table 7 Key assumptions of the MPS for all the sectors Sectors Key assumptions TS Fuel economy target for PLDVs: 6.9 L/100 km by 2015, 5.0 L/100 km by 2020 IS Contain the expansion of energy-intensive industries; Implementation of CO pricing since 2020; Reduction in industrial energy intensity by 21% during 2011–2015 BS Share of energy efficient building is 30% by 2020; Implementation of energy price policy, such as reform heating price; Introduction of energy standards; All fossil-fuel subsidies are phased out by 2020 OS Compared with 2013, the growth rate of energy losses will be below 10% in 2020 ES 58 GW of nuclear capacity, 200 GW of wind, 100 GW of solar PV and 30 GW of bioenergy by 2020; Implementation of CO pricing after 2020 Table 8 Key assumptions of the SPS for all the sectors Sectors Key assumptions TS Compared with 2010, 55% efficiency improvements by 2040 and support for the use of biofuels; Enhanced support to alternative fuels IS Introducing the CO pricing by 2020; Enhanced energy efficiency standards; Support the introduction of CCS BS 95% of new building achieve saving of 55%–65% in space heating compared to 1980 OS Compared with 2013, the growth rate of energy losses will be below 5% in 2020 ES Higher CO pricing; Enhanced support for renewables; Continued support to nuclear capacity additions post-2020; Deployment of CCS from around 2020 3.2.3 Strong policies scenario (SPS) sectors, energy consumption by the fuel types and total energy consumption. Compared with the other scenarios, the SPS sets out a much more aggressive energy pathway, which is consistent 4.1.1 Energy consumption by sectors with stronger energy efficiency policies. Furthermore, this scenario assumes more vigorous policy actions are to be The results of China’s energy consumption by different implemented after 2020. The assumptions of the key fac- sectors under the three scenarios are shown in Figs. 6, 7 tors for the SPS specified by the different sectors are shown and 8, respectively. Figure 6 presents the energy con- in Table 8. sumption of different sectors under the CPS in 2010–2040. The energy consumption of the different sectors (TS, IS, BS, OS and ES) under the CPS will maintain the rising 4 Results and discussion trend, reaching 600, 1253, 625, 393 and 2606 Mtoe, respectively, in 2040. However, as shown in Table 9, the 4.1 Results growth rates of energy consumption by the different sectors under CPS will drop during the 2000–2040 period. For Based on the three scenarios introduced in Sect. 3.2, the example, the growth of energy consumption by the TS future energy consumption structure of China is estab- under the CPS will be 10.0%, 6.2%, 4.6% and 1.3% during lished, as presented in the energy consumption by the the ten-year periods from 2000 to 2040. 123 222 Pet. Sci. (2017) 14:214–227 As shown in Fig. 6, IS takes the dominating share of the History Future project total primary energy consumption under the CPS all the Transport Industry way through 2040, although the share will decrease from Building 27.5% in 2010 to 22.9% in 2040. Meanwhile, BS and OS Other sector Electricity have inevitably displayed a downward trend, with their shares decreasing from 17.4% (in 2010) to 11.4% (in 2040) and 9.3% (in 2010) to 7.2% (in 2040), respectively. Notably, although the energy consumption of the TS is not high, its share will increase from 7.1% in 2010 to 11.0% in Figure 7 presents the energy consumption of different sectors under the MPS in 2010–2040. Compared with the CPS, energy consumption in the different sectors (TS, IS, 2010 2015 2020 2030 2040 Year BS, OS and ES) under the MPS will decrease, reaching 559, 1072, 580, 333 and 2337 Mtoe, respectively, in 2040. Fig. 6 Energy consumption of different sectors under the CPS in Moreover, as shown in Table 9, the growth of energy 2010–2040 consumption under MPS will be lower than that under CPS. Notably, the growth of the energy consumption in the IS under the MPS will be -0.4% during the 2030–2040 period. The main reason is that policies and implemented History Future project 2040 Transport 6000 2030 measures under the MPS will have begun to affect China’s Industry energy markets, together with the successful improvement Building Other sector of energy efficiency. Electricity In terms of the shares of the total primary energy con- sumption by different sectors under the MPS, IS still comprises the dominant share of the total primary energy consumption, maintaining its level at roughly 43.6% of the total primary energy consumption in 2040. BS is the sec- ond-largest energy-consuming end-use sector, with its share maintaining at around 22.8% of the total primary 0 energy consumption in 2040. The share of the total primary 2010 2015 2020 2030 2040 energy consumption by the TS will increase from 14.0% in Year 2012 to 22.0% in 2040. Although the share of the total primary energy consumption by the OS under the MPS will Fig. 7 Energy consumption of different sectors under the MPS in 2010–2040 keep rising, it will account for about 13.1% of the total primary energy consumption in 2040, lower than that under the CPS. Figure 8 presents the energy consumption of different History Future project 2040 Transport sectors under the SPS in 2010–2040. Compared with the Industry other scenarios, the policies and implemented measures Building Other sector under the SPS will be more aggressive and effective. Electricity Energy consumption by the different sectors (TS, IS, BS, OS and ES) under the SPS will be lower than that of the other two scenarios, reaching 5.3, 937, 490, 243 and 1850 Mtoe, respectively, in 2040. Furthermore, as shown in Table 9, the growth rates of energy consumption under the SPS will also be lower than that under the CPS and MPS. Specifically, the growth rates of energy consumption in the IS, BS and OS under the SPS will be negative during 2010 2015 2020 2030 2040 the 2030–2040 period. Year Additionally, as shown in Fig. 8, compared with the MPS, the shares of the total primary energy consumption Fig. 8 Energy consumption of different sectors under the SPS in by the IS and BS under the SPS will change slightly, 2010–2040 Energy consumption, Mtoe Energy consumption, Mtoe Energy consumption, Mtoe Pet. Sci. (2017) 14:214–227 223 Table 9 Growth rates of energy consumption in the different sectors under the three scenarios in 2000–2040 (%) CPS MPS SPS 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 TS 10.0 6.2 4.6 1.3 10.0 5.8 4.4 1 10.0 5.2 2.9 1.9 IS 9.2 4.1 1.4 0.7 9.2 3.9 1.0 -0.4 9.2 3.4 0.1 -0.6 BS 3.1 2.6 1.5 0.9 3.1 2.4 1.2 0.6 3.1 2.1 0.4 -0.2 OS 8.4 3.6 3.2 1.1 8.4 2.7 2.6 0.8 8.4 2.1 0.9 -0.5 ES 12.1 5.5 3.5 1.9 12.1 5.0 2.8 1.8 12.1 4.4 1.0 1.5 reaching 43.1% and 22.5% in 2040. Meanwhile, with more 6000 Coal Oil effective measures implemented, the share of the total Gas 2030 5000 Nuclear primary energy consumption by the TS under the SPS will Renewables increase dramatically from 14.0% in 2012 to 22.0% in History Future project 2040. Moreover, the share of the total primary energy consumption by the OS under the MPS will decrease sig- nificantly, lower than that under the other scenarios, accounting for about 11.2% of the total primary energy consumption in 2040. 4.1.2 Energy consumption by fuel types China’s energy consumption by fuel type under the three 2010 2015 2020 2030 2040 scenarios is shown in Figs. 9, 10 and 11. Figure 9 shows Year the energy consumption of different fuel types (coal, oil, Fig. 9 Energy consumption of different fuel types under the CPS in gas, nuclear and renewables) under the CPS in 2010–2040. 2010–2040 The forecast result in Fig. 9 indicates that the energy consumption of the different fuel types under the CPS will Coal keep rising, reaching 2362, 785, 487, 284 and 549 Mtoe, Oil Gas respectively, in 2040. Generally, the growth rates of the 5000 Nuclear Renewables energy consumption by the different fuel types under the History 2020 Future project CPS will be decreasing during the every ten-year period 4000 from 2000 to 2040 (Table 10). Specifically, the growth rate 2010 of the coal consumption under the CPS will decrease dra- 3000 matically during the same period, namely 10.1%, 1.8%, 1.7% and 0.8%. Figure 9 also shows that coal makes up the dominant share of the total energy consumption under the CPS all the way to 2040, although the share will decrease from 68.8% in 2010 to 52.9% in 2040. The share of oil consumed in the 2010 2015 2020 2030 2040 total energy consumption will hover around 17.8%. Year Meanwhile, the shares of the total consumption of gas, Fig. 10 Energy consumption of different fuel types under the MPS in nuclear and renewables under CPS will keep rising, 2010–2040 reaching 10.9%, 6.4% and 12.3%, respectively, in 2040. Figure 10 shows the energy consumption of different fuel types under the MPS in 2010–2040. Compared with MPS will be higher than that of the CPS, reaching 502, 335 the CPS, energy consumption in the terms of coal and oil and 654 Mtoe, respectively, in 2040 (Fig. 10). In addition, under the MPS will be lower, reaching 1867 and 687 Mtoe, the growth rate of the gas, nuclear and renewables con- respectively, in 2040. Meanwhile, as shown in Table 10, sumption under the MPS will also be higher than that of the the growth rates of the coal and oil consumption under the CPS, reaching 3.1%, 4.0% and 1.8%, respectively, in 2040, MPS will be lower than that of the CPS. Furthermore, the offering more potential than the conventional fossil fuels consumption of gas, nuclear and renewables under the (coal and oil). Energy consumption, Mtoe Energy consumption, Mtoe 224 Pet. Sci. (2017) 14:214–227 Coal Oil Gas 5000 Nuclear 2030 Renewables History Future project 2010 2015 2020 2030 2040 Year Fig. 11 Energy consumption of different fuel types under the SPS in 2010–2040 Figure 10 also shows that although coal and oil account for 87.6% and 63.1% of the total energy consumption in 2010 and 2040, respectively, their shares under the MPS will keep a decreasing trend. In contrast, gas, nuclear and renewables would be a major alternative to coal and oil, with their shares increasing to 12.4%, 8.3% and 16.2%, respectively, in 2040. Figure 11 shows the energy consumption of different fuel types under the SPS in 2010–2040. Unlike the other two sce- narios, Fig. 11 shows a downward trend both in the coal and in oil consumption under the SPS over the period from 2015 to 2040, reaching 958 and 445 Mtoe, respectively, in 2040. Furthermore, the growth rates of the coal and oil consumption under the SPS will be lower than that of the CPS and MPS. The growth rate of coal consumption under the SPS will be 10.1%, 0.2%, -3.1% and -2.7% during the ten-year periods from 2000 to 2040 (Table 10). Figure 11 showsanupwardtrend in the gas, nuclear and renewables consumption under the SPS over the period from 2015 to 2040, reaching 510, 529 and 879 Mtoe, respectively, in 2040. Table 10 shows that the growth rate of this section of energy consumption under the SPS will be lower than that of the other scenarios. Figure 11 also shows that coal and oil no longer com- prise the dominant share of the total energy consumption under the SPS in 2040, with their total shares standing at 45.0%. Moreover, with more aggressive energy efficiency policies and more vigorous policy action to be imple- mented, clean fuels (gas, nuclear and renewables) will keep an increasing trend, with their shares rising to 13.4%, 15.4% and 26.5%, respectively, in 2040. 4.1.3 Total energy consumption Figure 12 presents the total energy consumption in China under the different scenarios in 2010–2040. It can be seen Energy consumption, Mtoe Table 10 Growth rates of the energy consumption by different fuel types under the three scenarios in 2000–2040 (%) CPS MPS SPS 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 2000–10 2010–20 2020–30 2030–40 Coal 10.1 1.8 1.7 0.8 10.1 1.1 0.5 0.1 10.1 0.2 -3.1 -2.7 Oil 7.8 2.5 2.1 0.5 7.8 1.8 1.6 0.1 7.8 1.1 1.2 -2.1 Gas 17.8 9.7 6.0 3.0 17.8 9.9 6.1 3.1 17.8 10.6 6.3 3.2 Nuclear 17.4 22.8 7.2 3.9 17.4 23.3 8.9 4.0 17.4 24.6 11.1 5.8 Renewables 14.8 10.3 1.5 1.2 14.8 11.0 2.3 1.8 14.8 11.9 4.0 2.7 Pet. Sci. (2017) 14:214–227 225 (2010), our results in this work are initially conservative for the first decade under the scenario and then become more History Future project optimistic. In addition, even though the trends of the IEA’s predictions for the various scenarios were in line with those of our predictions; however, our predicted values were lower than those of the IEA for all three scenarios. The discrepancies between the IEA’s predictions and ours could be attributed to the following three reasons. Firstly, the IEA’s predictions are weighted heavily toward the 12th This work IEA Five year Plan set in 2011, which underestimated the rig- CPS MPS orous measures undertaken by the Chinese government for SPS improving energy efficiency and reducing environmental impacts achieved in 2015. Secondly, China is not one of 2010 2015 2020 2030 2040 Year the IEA’s 28-member countries. Hence, the IEA’s data sources were likely obtained through third parties and Fig. 12 Total energy consumption under different scenarios in might not reflect China’s current situation. Thirdly, there 2010–2040 are different assumptions used in this work and the IEA’s calculations for the three scenarios. that by 2040, the total energy consumption in China will Regarding the reduction potential of the energy con- still be increasing under most of the scenarios. Total energy sumption, there will be a maximum reduction of consumption will increase from 3016 Mtoe in 2015 to 1146 Mtoe of energy consumption under the SPS in 2040 4467 Mtoe in 2040 under the CPS. Compared with the compared with the CPS, and the SPS has much more CPS, it will decrease by 422 Mtoe to 4045 Mtoe in 2040 reduction potentials. However, compared with much more under the MPS, while it will decrease by 1146 Mtoe to aggressive energy efficiency policies under the SPS, the 3321 Mtoe in 2040 under the SPS. The average annual ongoing energy policies and measures in China show lower growth rates of the total energy consumption in China availabilities, efficiency and potentials. In this regard, some under the different scenarios (CPS, MPS and SPS) will be much more effective and advisable policies and measures 1.6%, 1.2% and 0.4%, respectively, over the period from should be put forward by the Chinese government. 2015 to 2040. However, our estimates in this work are all When the results shown in Figs. 6, 7, 8, 9, 10, 11 and 12 lower than the IEA’s ones. are studied together, it can be concluded that the clean fuels (gas, nuclear and renewables) could be major alternatives 4.2 Discussion to the conventional fossil fuels (coal and oil) and offer much more potential, accounting for 57.8% of the total Prediction results of China’s energy consumption by the energy consumption in 2040 under SPS, reaching transport sector (TS) in the present study and previous 1918 Mtoe. In terms of the energy consumption by the studies are shown in Table 11 for comparison purposes. As sectors, IS has much more reduction potential than the Table 11 shows, Ou et al. (2010) estimated Chinese TS other sectors. Compared with the CPS, the energy con- energy consumption in 2020, 2030 and 2040 to be 375, 479 sumption will be reduced by 316–937 Mtoe in 2040 under and 531 Mtoe, respectively, under the business as usual the SPS. Hence, policy makers should pay attention to the (BAU) scenario; and to be 350, 427 and 426 Mtoe, development of Chinese clean fuels and to the energy respectively, under the promoting electric vehicles (PEV) reduction in the IS. scenario. Compared with the values reported by Ou et al. Table 11 Chinese TS energy consumption estimated in the previous 5 Conclusions and policy implications studies (Mtoe) (Ou et al. 2010; IEA 2015) and in this work Ou et al. (2010) IEA (2015) This study 5.1 Policy implications BAU PEV CPS NPS 450 CPS MPS SPS From the comprehensive analysis and discussion carried 2020 375 350 348 346 336 357 345 329 out above, we obtain the following policy implications: 2030 479 427 482 465 414 535 509 425 First, it will be necessary to incorporate consideration of 2040 531 426 564 520 428 600 559 503 the adjustment of energy consumption structure into the industrialization and urbanization process. Currently, The figures in BAU and PEV are estimated through the results compared with energy consumption, the government gives calculated by Ou et al. (2010) Energy consumption, Mtoe 226 Pet. Sci. (2017) 14:214–227 high priority to energy production and ignores the impor- (2) From the perspective of energy consumption by the tance of adjustment of energy consumption structure. fuel types, coal and oil take the dominant share of Hence, it is essential that in future the government should the total energy consumption under the three consider energy consumption structure from a strategic scenarios all the way to 2040; however, the share will maintain a decreasing trend. In contrast, clean height and long-term perspective, adjusting the energy development strategy according to the adjustment of fuels will reach 1918 Mtoe, accounting for 57.8% of the total energy consumption in 2040 under the SPS. energy consumption structure. Second, it is critical to establish and perfect the related Therefore, the clean fuels will offer more develop- ment potential than conventional fossil fuels in the policies and measures. This is the most important measure, chiefly because the China’s energy market has experienced future. a lack of more aggressive energy efficiency policies and (3) From the perspective of the total energy consump- more vigorous policy actions for decades. For example, the tion, China’s total energy consumption will increase resource tax in China’s energy market has been compre- continuously in all scenarios from 2015 to 2040. hensively introduced. However, the stringency level of the Specifically, the total energy consumption will resource tax has generally lagged behind that of developed increase from 3016 Mtoe in 2015 to 4467 Mtoe in 2040 under the CPS, 4045 Mtoe in 2040 under the countries. Furthermore, it is difficult to implement some energy market policies and measures in China. CPS and 3321 Mtoe in 2040 under the CPS, respectively. It is notable that our estimates are all Third, more focus should be laid on the development of clean fuels and energy reduction in the IS. In order to lower than the IEA’s. promote the development of clean fuels, the policy makers (4) From the perspective of the existing policies and should improve existing pricing and subsidy policies. measures, by analyzing the results under the three Besides, according to the adjustment of the energy con- scenarios, we can find that the effect of the policies sumption structure, the government should reasonably and measures under the CPS is poorer than those adjust the shares between the clean fuels and conventional under the MPS and SPS, which means that existing policies and measures show lower availabilities, fossil fuels. Furthermore, the government and enterprises should pay attention to the structural energy saving espe- efficiency and potentials. cially of the IS. In summary, compared with that of the developed countries, China’s energy consumption structure still needs 5.2 Conclusions the further improvement and adjustment. As a result, the Chinese government should incorporate consideration of In this study, to forecast China’s energy consumption the adjustment of energy consumption structure into structure in the future, we first present a comprehensive and existing energy policies and measures. systematic review of the development status of China’s energy consumption structure by the fuel types from 1990 Acknowledgements This study is supported by National Natural to 2015 and the sectors from 1990 to 2013. Then, under the Science Foundation (No. 71273277) and National Social Science Foundation (No. 13&ZD159). The authors appreciate the helpful CPS, MPS and SPS, a bottom-up accounting framework reviews and comments by the anonymous reviewers. was developed and the LEAP model was used to forecast the China’s energy consumption structure from 2015 to Open Access This article is distributed under the terms of the Creative 2040. At last, the suggestions in the four aspects are pro- Commons Attribution 4.0 International License (http://creative commons.org/licenses/by/4.0/), which permits unrestricted use, distri- posed to further promote the adjustment of the China’s bution, and reproduction in any medium, provided you give appropriate energy consumption structure. The main conclusions credit to the original author(s) and the source, provide a link to the drawn from this study are summarized as follows: Creative Commons license, and indicate if changes were made. (1) From the perspective of energy consumption by the sectors, IS takes the dominant share of the total References primary energy consumption under the three scenar- ios all the way to 2040 and the share will display an Ates SA. Energy efficiency and CO mitigation potential of the upward trend. 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Published: Dec 17, 2016

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