Alternative Energy Development and China's Energy Future

In addition to promoting energy efficiency, China has actively pursued alternative energy development as a strategy to reduce its energy demand and carbon emissions. One area of particular focus has been to raise the share of alternative energy in China’s rapidly growing electricity generation with a 2020 target of 15% share of total primary energy. Over the last ten years, China has established several major renewable energy regulations along with programs and subsidies to encourage the growth of non-fossil alternative energy including solar, wind, nuclear, hydro, geothermal and biomass power as well as biofuels and coal alternatives. This study thus seeks to examine China’s alternative energy in terms of what has and will continue to drive alternative energy development in China as well as analyze in depth the growth potential and challenges facing each specific technology. This study found that despite recent policies enabling extraordinary capacity and investment growth, alternative energy technologies face constraints and barriers to growth. For relatively new technologies that have not achieved commercialization such as concentrated solar thermal, geothermal and biomass power, China faces technological limitations to expanding the scale of installed capacity. While some alternative technologies such as hydropower and coal alternatives have been slowed by uneven and often changing market and policy support, others such as wind and solar PV have encountered physical and institutional barriers to grid integration. Lastly, all alternative energy technologies face constraints in human resources and raw material resources including land and water, with some facing supply limitations in critical elements such as uranium for nuclear, neodymium for wind and rare earth metals for advanced solar PV. In light of China’s potential for and barriers to growth, the resource and energy requirement for alternative energy technologies were modeled and scenario analysis used to evaluate the energy and emission impact of two pathways of alternative energy development. The results show that China can only meets its 2015 and 2020 targets for non-fossil penetration if it successfully achieves all of its capacity targets for 2020 with continued expansion through 2030. To achieve this level of alternative generation, significant amounts of raw materials including 235 Mt of concrete, 54 Mt of steel, 5 Mt of copper along with 3 billion tons of water and 64 thousand square kilometers of land are needed. China’s alternative energy supply will likely have relatively high average energy output to fossil fuel input ratio of 42 declining to 26 over time, but this ratio is largely skewed by nuclear and hydropower capacity. With successful alternative energy development, 32% of China’s electricity and 21% of its total primary energy will be supplied by alternative energy by 2030. Compared to the counterfactual baseline in which alternative energy development stumbles and China does not meet its capacity targets until 2030, alternative energy development can displace 175 Mtce of coal inputs per year and 2080 Mtce cumulatively from power generation by 2030. In carbon terms, this translates into 5520 Mt of displaced CO{sub 2} emissions over the twenty year period, with more than half coming from expanded nuclear and wind power generation. These results illustrate the critical role that alternative energy development can play alongside energy efficiency in reducing China’s energy-related carbon emissions