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SUSTAINABLE WORLD ENERGY OUTLOOK

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SUSTAINABLE WORLD ENERGY OUTLOOK ( sustainable-world-energy-outlook )

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image A WORKER ENTERS A TURBINE TOWER FOR MAINTENANCE AT DABANCHENG WIND FARM. CHINA’S BEST WIND RESOURCES ARE MADE POSSIBLE BY THE NATURAL BREACH IN TIANSHAN (TIAN MOUNTAIN). image WOMEN WEAR MASKS AS THEY RIDE BIKES TO WORK IN THE POLLUTED TOWN OF LINFEN. LINFEN, A CITY OF ABOUT 4.3 MILLION, IS ONE OF THE MOST POLLUTED CITIES IN THE WORLD. CHINA’S INCREASINGLY POLLUTED ENVIRONMENT IS LARGELY A RESULT OF THE COUNTRY’S RAPID DEVELOPMENT AND CONSEQUENTLY A LARGE INCREASE IN PRIMARY ENERGY CONSUMPTION, WHICH IS ALMOST ENTIRELY PRODUCED BY BURNING COAL. china: future costs of electricity generation Figure 5.127 shows that the introduction of renewable technologies under the Energy [R]evolution scenario slightly increases the costs of electricity generation in China compared to the Reference scenario. However, this difference will be less than 0.4 cent/kWh up to 2020, if the price pathway for fossil fuels defined in Chapter 4 is applied. Because of the lower CO2 intensity of electricity generation, electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be $ 6.3 cents/kWh below those in the Reference version. Under the Reference scenario, by contrast, unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $ 366 billion per year to more than $ 2,096 billion in 2050. Figure 5.127 shows that the Energy [R]evolution scenario not only complies with China’s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are 24% lower than in the Reference scenario, including estimated costs for efficiency measures. in the Reference scenario ($ 5,658 billion). Under the Reference version, the levels of investment in conventional power plants add up to almost 49% while approximately 51% would be invested in renewable energy and cogeneration (CHP) until 2050. 5 Under the Energy [R]evolution scenario, however, China would shift almost 95% of the entire investment towards renewables and cogeneration. Until 2030, the fossil fuel share of power sector investment would be focused mainly on CHP plants.The average annual investment in the power sector under the Energy [R]evolution scenario between today and 2050 would be approximately $ 252 billion. Because renewable energy has no fuel costs, savings in the Energy [R]evolution scenario reach a total of $ 9,870 billion up to 2050, or $ 247 billion per year.The total fuel cost savings therefore would cover almost 2 times the total additional investments compared to the Reference scenario.These renewable energy sources would then go on to produce electricity without any further fuel costs beyond 2050, while the costs for coal and gas will continue to be a burden on national economies. figure 5.128: china: investment shares - reference scenario versus energy [r]evolution scenario figure 5.127: china: total electricity supply costs and specific electricity generation costs under two scenarios Bn$/a 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 ct/kWh REF 2011 - 2050 Total $ 5,658 billion E[R] 2011 - 2050 Total $ 10,090 billion 2009 2015 2020 2030 2040 2050 SPEC. ELECTRICITY GENERATION COSTS (REF) •‘EFFICIENCY’ MEASURES •REFERENCE SCENARIO (REF) ENERGY [R]EVOLUTION (E[R]) 16 14 12 10 8 6 4 2 0 6% CHP 14% NUCLEAR 45% RENEWABLES 35% FOSSIL 5% FOSSIL & NUCLEAR 14% CHP 81% RENEWABLES SPEC. ELECTRICITY GENERATION COSTS (E[R]) china: future investments in the power sector It would require $ 10,090 billion in investment for the Energy [R]evolution scenario to become reality (including investments for replacement after the economic lifetime of the plants) - approximately $ 252 billion annually or $ 111 billion more than 171 © GP/HU WEI © N. BEHRING-CHISHOLM/GP key results | CHINA - ELECTRICITY GENERATION

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