While many believe that China is the sleeping dragon of CHP, few had a true idea of the potential magnitude of the market. As part of WADE’s ongoing work in China through the Asia Pacific Partnership (APP), we have been involved in the study of the technical potential for five key provinces. The results are in and they are staggering. By use of a new version of the WADE Economic Model, we have been able to see that the potential exists for China to improve its environment without sacrificing its economy, through greater deployment of CHP and decentralized energy.
Five target provinces/municipal districts – Shanghai, Liaoning, Shandong, Jiangsu, and Sichuan – were chosen for research, based on a review of their fuel supply outlook, including natural gas, sustainable biomass and waste thermal sources; an assessment of overall economic growth and development; and an evaluation of the technical application potential for CHP. An estimate for clean DE and CHP technical potential was developed for each target province/municipality using the best available industrial and commercial building data collected by the project team. The total technical potential for clean DE and CHP within the five target regions is estimated to be 144 GW of electrical generating capacity. This represents 38% of the 372 GW increase in central station generating capacity projected to be required in these five regions between 2010 and 2030.
Because of the improved efficiencies, China stands to reduce its carbon dioxide emissions by around a third. But these improved efficiencies and reduced need for grid investment also produce significant cost savings for the Chinese economy. China stands to save approximately $90 billion if it can realize this technical potential, making the decentralized energy approach a win-win. With proven technology on the shelf today, there is no need for China to dampen its economic miracle by reducing its carbon footprint.
The total energy savings resulting from full deployment of the 144 GW of CHP/DE potential in the four provinces and Shanghai amounts to about 6.3 billion GJ annually in 2030. Full deployment of CHP/DE would result in an overall energy reduction in the four provinces and Shanghai of 19% in 2030 compared to continued reliance on traditional central station power generation.
The WADE report concludes that development of customer-based CHP and clean decentralized energy can provide significant benefits in the four target provinces and Shanghai by displacing inefficient coal-based central station power generation with power produced from highly efficient natural gas CHP technologies and DE technologies fueled by waste heat and industrial and commercial waste fuels.
However, for China to approach its technical potential there must be significant policy changes and a willingness to embrace a new way of planning for its power needs. As Darrell Royal (a famous American football coach) said, ‘potential just means you ain’t done it yet.’ However, as the Chinese say, a journey of a thousand miles must begin with a single step. The WADE study and APP project is but a single step – but hopefully, one in the right direction.
Executive Director, WADE