Perceptions of opinion leaders towards CCS demonstration projects in China

Applied Energy 88 (2011) 1873–1885

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Applied Energy journal homepage: www.elsevier.com/locate/apenergy

Perceptions of opinion leaders towards CCS demonstration projects in China Xi Liang a,⇑, David Reiner b, Jia Li c,d a

Energy Policy Research Group, College of Life and Environmental Science, University of Exeter, UK Electricity Policy Research Group, Judge Business School, University of Cambridge, UK c Centre for Environmental Policy, Imperial College, London, UK d Department of Mechanical Engineering, Imperial College, London, UK b

a r t i c l e

i n f o

Article history: Received 14 April 2010 Received in revised form 19 October 2010 Accepted 24 October 2010 Available online 26 November 2010 Keywords: Carbon Capture and Storage CCS Demonstration projects Opinion leaders China

a b s t r a c t We present results of a major survey of Chinese opinion leaders conducted from March to April 2009, supported by EU–UK–China near zero emissions coal (NZEC) initiative. Respondents were drawn from 27 provinces and regions using an online survey with follow-up face-to-face interviews. A total of 131 experts and decision-makers from 68 key institutions were consulted through online survey. This survey is the first to focus on demonstration projects in particular and is the most geographically diverse. We aim to understand perceptions of applying CCS technologies in the first large-scale CCS demonstration project in China. Though enhanced oil recovery (EOR) and enhanced coal bed methane recovery (ECBM) may not be long-term solutions for CO2 storage, they were viewed as the most attractive storage technologies for the first CCS demonstration project. With regard to CO2 capture technology, on the whole, postcombustion (which would be most applicable to the vast majority of existing power plants which are pulverised-coal) received slightly higher support than pre-combustion. More surprising, respondents from both the power and oil industries favoured pre-combustion. There was no consensus regarding the appropriate scale for the first demonstration. A large number of respondents were concerned about the energy penalty associated with CCS and its impact on the long-term sustainability of coal supply in China, although such concerns were much reduced compared with surveys in 2006 and 2008. Ó 2010 Elsevier Ltd. All rights reserved.

1. Introduction China is rich in coal and has relatively limited oil and gas resources. Coal-fired power generation units dominate the installed electric power capacity in China and over 70% of electricity was generated by thermal power plants in 2008 [1]. Economic growth is closely tied to growth in electricity demand and CO2 emissions. Despite China’s high economic growth rate over the past three decades, electricity generation per capita is still lower than those of the higher-income economies. Electricity generation per capita in 2008 was 2422 kWh/capita in China and 13,565 kWh/capita in the USA [2]. The potential for growth is therefore high, if China continues on a trajectory towards western consumption patterns. Coal is poised to continue to be the backbone of electricity generation and the main source of carbon emissions in China over the next two decades [3,4]. Coal-fired power plants are expected to remain the largest source of CO2 emissions globally through 2050, and a substantial fraction of carbon emissions will come from Chinese coal-fired power plants [5]. Carbon Capture and Storage (CCS), by which ⇑ Corresponding author. E-mail addresses: [email protected] (X. Liang), [email protected] (D. Reiner), [email protected] (J. Li). 0306-2619/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.apenergy.2010.10.034

CO2 is captured from power generation, and injected underground for storage, can significantly reduce greenhouse gas emissions while allowing coal to meet increasing energy demands ([6], executive summary p. x). Although CCS has moved up the policy agenda quite rapidly in both China and globally and a number of CCS pilot projects are operating or planned [7], CCS is still not viewed as a priority in China and is rarely mentioned in the Chinese National Climate Change Programme [8]. In part, this neglect may be attributed to the novelty of the technology and that China’s policy measures still favour low carbon technologies where there is clearer convergence between energy efficiency and climate change policy [9]. Chinese climate policies require compatibility with concerns over energy security and the maintenance of indigenous supply rather than increasing dependence on foreign supplies of natural gas, crude oil and uranium ([10], pp. 18–19). Energy security considerations place energy efficiency as central in reducing overall demand and dependence on foreign energy sources. CCS has therefore not been a priority in Chinese climate policy to date, and instead priority has been given to policies compatible with energy security and energy efficiency, as observed by Reiner et al. [11] and Morse et al. [12]. However, Zhou et al. [13], have conducted an economic analysis which suggested CCS, energy efficiency and renewable energy should be combined in mitigating climate change in China. Finally,

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the lack of stakeholder confidence is also a key challenge in deploying CCS technologies in China [14]. In the developed world, a large number of studies have been conducted to investigate stakeholder and public perception of deploying CCS [15–22]. Usually, studies of Chinese stakeholder perceptions have explored the perceptions and drivers of longterm deployment of CCS [11,23–26]. To date, studies have not focused on Chinese stakeholders’ perceptions of the first CCS demonstration projects, in particular the preferred technical options. We build on earlier and parallel stakeholder analyses in China (summarised in Appendix A), and investigate current views and perceptions of where the future lies with regard to CCS, particularly with respect to the first CCS demonstration projects. In addition, we also investigate regional differences in technology preferences for CCS demonstration project. The main research question is ‘‘What are the preferred technology options for the first CCS demonstration projects in China?’’ In addition, we update current thinking on many issues related to CCS, at the national, regional and provincial levels, in order to understand preferences for a hypothetical demonstration project:  Overall perceptions regarding CCS and first demonstration projects.  Options of capture technologies.  Methods of CO2 storage.  Project scale.

2.2. Questionnaire distribution and data collection An invitation to participate was sent to each opinion leader by email. This resulted in slightly more than 50% of the sample (131 of 256) responding in full and 25 respondents providing incomplete responses. The invitation letter included a covering letter explaining the objectives of the survey, together with the background of NZEC. The letter provided assurance that all survey data would guarantee the anonymity of the respondent. In order to encourage as many opinion leaders as possible to participate in the survey, we offered a token of appreciation (‘UK–China Olympic stamp presentation pack’ issued by the UK Post Office) upon finishing the survey. In addition, we sent follow-up emails to all opinion leaders who had not responded, reminding them to take part in the survey. Apart from the internet-based survey, we conducted face-toface interviews with 31 opinion leaders. Twenty two of whom were selected from the online survey respondents, and a further nine senior decision-makers were consulted face-to-face as they did not participate in the online survey nor was the internet viewed as an efficient means of soliciting their opinions. The aim of face-to-face interviews was to better understand the reasons for the technical options selected, such as why opinions in the online survey were so divergent. Of the 31 opinion leaders, 22 had relevant engineering education and/or working experience. 2.3. Data analysis

2. Research methodology 2.1. Sample selection and questionnaire design The study involved four steps: determining the sample, questionnaire design, survey implementation, and data analysis. The main criterion employed to determine the target population (energy experts or decision-makers from the public and private sectors, described as ‘opinion leaders’ herein) was that selected opinion leaders should have ‘significant current or potential influence on CCS demonstration projects or deployment in China’. In addition, the aim was to have a regional and sectoral sample population which was diverse in nature and of a sufficient size to achieve results with minimal bias. We therefore set a limit of 30% to each type of institution (e.g. government, academic, industry, NGO, banks etc.) and ensured that less than one fifth of the overall sample was from the community working directly on CCS (i.e., stated they spend most of their time on CCS). Most of our target interviewees were based in China, however, a small number of senior Chinese academics based in foreign countries and officials in Chinese energy departments at multilateral, commercial or development banks were also included. The target group included 256 opinion leaders from over 100 institutions, drawn from a database of over 500 contacts. The contact details of key opinion leaders were obtained from a range of sources, including domestic and international conferences, and nominations by senior government officials, management of leading power firms and academic institutions. We designed the questionnaire to complement past CCS opinion leader surveys and consultations (Appendix A) so that a number of the questions could be compared to those of past surveys, thus allowing us to see if there had been any evolution in opinion leader views. The questionnaire was path dependent, which offered the flexibility of tailoring questions to different categories of respondent so that we could ask several questions that drew on their area of expertise. The questionnaire was available in both Chinese and English on the website www.CaptureReady.com.

The analysis of data for each question in the consultation begins by describing and summarising how responses are distributed among the categories. We then apply logistic regression and analysis to explore relationships between an item and others in the survey (for example, to investigate whether demographic variables affect the odds of prioritizing CCS). For data collected in scale or index format, we illustrate the average. All quantitative analyses are based on a database of the 131 online responses. In terms of qualitative data, narrative research and analysis is adopted for interpreting data collected from follow-up face-to-face interviews which were open-ended and not based on a predetermined list of questions.

Fig. 3.1. Distribution of respondents by province or region (yellow: provinces with <10 respondents; red: 16 key opinion leaders; blue: 49 opinion leaders). (For interpretation of the references to colour in this figure legend, the reader is referred to the web version of this article.)

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X. Liang et al. / Applied Energy 88 (2011) 1873–1885 Table 3.1 Demographic data for selected regions included in the survey. 2007 Data [27]

Population (million)

Electricity consumption (billion kWh)

Electricity production (billion kWh)

GDP/capita (Yuan RMB)

Opinion leaders interviewed

Average time claimed spent on CCS (%)

Xinjiang Jilin Guangdong Beijing National

21 27 94 16 1321

41.7 46.3 339.4 62.8 3245.8

34.9 42.3 218.7 22.8 3255.9

16,817 19,358 32,897 58,204 18,934

2 3 16 49 131

0 7 5 18 12

Fig. 3.2. Claimed average working time spent on ‘Energy and Environment’, ‘Climate Change’ and ‘Carbon Capture and Storage’ by respondents.

3. Demographic information 3.1. Distributions of online respondents by the type of institution There were approximately equal shares of respondents from each sector: governments (24%), energy industry (24%), academia (23%) and other (banks, non-energy industry and NGOs) (29%). A total of 131 respondents came from 68 institutions in PRC and other regions, including the State Council, NDRC, MOST, MOEP, MOF, MOFA, various Local Governments, Huaneng Power, Datang Power, Guodian Power, BP, CNPC, CNOOC, Tsinghua University, Chinese Academy of Science, and China Petroleum University (please see Appendix B for additional details).

Question: On average, how much of your working time is spent directly on energy and environment issues? On average, how much of your working time is spent directly on climate change issues? On average, how much of your working time is spent directly on Carbon Capture and Storage (CCS) issues? At the very beginning of the survey, opinion leaders were asked the question: ‘CCS and climate change are relatively new topics in China, have you heard of any one of the concepts, both of the concepts or neither, before this survey?’. The vast majority of opinion leaders (90%) selected ‘both’, while 7% had heard of only climate change and 4% had heard of neither issue. All of those have not heard of CCS were from Local Government. After this question, short explanations of technical terms (such as ‘post-combustion’ or ‘enhanced oil recovery’) were provided during the online survey.

3.2. Distribution of online responses by office location The survey covers 27 provinces or regions in China. Over 60% of respondents came from outside Beijing. Two regions, Beijing (49), and Guangdong (16) had greater than 10 respondents (highlighted in orange and red colour in Fig. 3.1 and Table 3.1). In addition, we obtained a few responses from opinion leaders (e.g. major investment or development banks) based in foreign countries which have strong interests in or are currently involved in CCS development in China. 3.3. Average working time spent on energy and environment, climate change and CCS As shown in Fig. 3.2, approximately 90% of the respondents claimed to spend more than half of their time on energy and environment issues, but less than 20% spent half of their time or more time on CCS. We found respondents overall, spent more time on climate change issues in contrast to the results from the CAPPCCO (UK–China Chinese Advanced Power Plant Carbon Capture Options project) CCS study conducted in Autumn 2008 [23]. In addition, two thirds of the respondents claimed that they had participated in CCS conferences/events or research activities.

4. Perceptions on climate change and Carbon Capture and Storage 4.1. Views on climate change We can compare the results of our survey to those of previous surveys we have conducted in China which use a similar distribution across sectors and 16 responded to both surveys. Twice as many respondents believed that climate change is an immediate threat compared to 2006 [11]. On the other hand, slightly more respondents considered climate change to be a moderate or serious problem, in contrast to the earlier survey in 2006.1 In addition, when opinion leaders were asked about the role of climate change issues in their organisations, more than half of respondents claimed climate change was a ’very important’ or an 1 We should note that the respondents to the 2006 and 2009 surveys were not identical. Indeed, only 15 respondents were in both samples. The 2006 survey focused more on three regions – Beijing, Wuhan and Guangdong – whereas the 2009 survey used a web interface to allow for much wider geographic coverage. Nevertheless, both surveys did target a cross section of stakeholders from government, industry and academia.

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‘important’ issue in their institution. Interestingly, higher importance was attached to climate change issues by researchers and the energy industry rather than the government; however, we also found industrial representatives were less likely to worry about climate change as an immediate threat in contrast to the opinions from academia or government. This is consistent with the finding by Reiner and Liang [23] in previous CCS stakeholder surveys in China. Even though a growing number of opinion leaders believed climate change would be a serious problem for China in the distant future, more than three quarters of respondents believed it would be ‘very difficult’ or ‘difficult’ to achieve a substantial cut in carbon emissions globally in the next two decades. When questions were asked specifically on cutting emissions in China, the overall result was even more pessimistic, as over 80% of the respondent selected the answers ‘very difficult’ or ‘difficult’ to achieve a deep cut of GHG emissions in the next 20 years. During follow-up interviews, we found that the most quoted reason given for those with optimistic positions on current climate policies was the current ambitious national energy conservation policy, which, according to the opinion leaders could result in emissions reductions as well as enhanced political attention on climate change. Those who were skeptical of the usefulness of current climate policies, were concerned about growing demands for energy related to increased GDP, constraints on implementation within the current environmental regulatory framework, and the perceived higher urgency of serious local pollution problems, such as water pollution and air quality. All Local Governments officials were either pessimistic or cautious about climate change during face-to-face interviews. However, they were very interested in the economic potential of the climate change business. The views of climate change by power companies offer another interesting constrast: all decision-makers in large national power companies had strategic views on climate change, but a majority of interviewees in local power companies (including local power plant of national power companies) believed it was still to early to seriously address climate change in China.

or pilots). We found that no single project was recognised by more than a quarter of the respondents. The best known of the CCS projects is GreenGen, which is an integrated gasification combined cycle (IGCC) project currently under construction with investors drawn primarily from Chinese power companies (Fig. 4.1). On the other hand, only three people claimed they had not heard of any of the listed projects before this survey. Question: Please mark the project(s) you have heard of before this survey: (you may select multiple options). The majority of the respondents (62%) perceived CCS as being ‘probably necessary’ or ‘very necessary’ in achieving deep cut of greenhouse gas emissions (Fig. 4.2). Most of the pessimists were from the power industry and the national government. When we conducted our follow-up interviews, three CCS opponents, who originally supported CCS in 2006, were concerned about the reliability of CCS technologies, availability of storage sites and coal supply problems. They were also more confident in their understanding and knowledge of CCS. Two energy officials from different provincial development and reform commissions described CCS as being ‘‘probably necessary’’ even though they did not prioritise climate change. During face-to-face discussions they seemed being keen on developing the first CCS demonstration project in their province and cited a number of advantages of developing CCS project in their region. Based on a single factor model, we found opinion leaders from energy companies were less likely to prioritise CCS. On the other hand, those institutions describing climate change as an important

4.2. Views on Carbon Capture and Storage (CCS) In previous CCS surveys, the building of CCS demonstration projects was widely acknowledged as one of the most crucial steps in developing and deploying CCS in China, because opinion leaders lacked confidence on various issues, such as maturity of technologies and availability of finance [23]. We investigated the perceptions on CCS demonstration in China, by asking opinion leaders about their awareness of current CCS projects (including initiatives

Fig. 4.2. Perceived importance of CCS in deep cut of greenhouse gas emissions.

Fig. 4.1. Awareness of CCS projects, initiatives or pilots before participating in the survey (a short description of each project was presented beside the question).

X. Liang et al. / Applied Energy 88 (2011) 1873–1885

issue had a significantly higher tendency to view CCS as a necessary solution in reducing greenhouse gas emissions (as illustrated in Appendix C). Notably, the five opinion leaders surveyed from three different NGOs did not express negative attitudes towards CCS technologies, in contrast with the more reluctant attitudes on most issues surrounding CCS found in European NGOs [17,28], however this could also due to the sample size or selection bias. One respondent is working as a group head in an NGO which was always opposing CCS in Europe and US, but he selected CCS as ‘probably necessary’ at online survey. During follow-up interview, he expressed his personal view that CCS could be an important low carbon technology within the Chinese coal-dominated energy structure; however, he added that ideally CCS should be used as a transitional technology before renewable could play a dominant role in China. There is no statistically significant evidence that those who claimed spending more time on CCS or energy would be more likely to prioritise CCS technology. Our logit regression (see Appendix C) indicates that opinion leaders from provinces with higher GDP per capita were not more likely to support CCS. However, we did find that respondents from Beijing and South China (primarily Guangdong) were much more likely to view CCS as necessary or very necessary in addressing climate change. During face-to-face interviews with 31 opinion leaders, we found those with an engineering background (21 stakeholders) were more interested in CCS demonstration projects and some asked for more detail information on CCS technologies. Question: How important is CCS in achieving deep cuts in greenhouse gas emissions? Attitudes towards the energy penalty for capture, transport and storage of CO2, were overall slightly negative. A number of opinion leaders (38%) believed there would be more energy available for consumption if China did not adopt CCS. Chinese respondents generally believed the energy penalty from CCS would have a negative impact on the security of energy supply. By comparison, a majority of European stakeholders perceived of CCS as potentially enhancing energy security [17]. However, there has been a shift over time towards a less negative view. Respondents who chose the answer: ‘CCS is very positive for energy security in China’ almost doubled in 2009 compared to the 2006 survey and roughly half as many selected ‘very negative’ as an answer to this question in 2009, compared to the 2006 study (19% vs. 9%, as shown in Fig. 4.3). During a follow-up study (described in Section 2.2) our observation was reconfirmed as we found that a number of interviewees had adopted strategic views on climate and energy policy that coal might not be a reliable energy source for China in the long term unless CCS technologies were adopted. Most opinion leaders believed that the dominance of coal in the Chinese energy sector will not

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change in the near future. When discussing energy supply security issues with a senior Chinese government official who is also a climate change negotiator, he refused to comment on whether CCS would affect Chinese energy security, but he clearly indicated that CCS could be a transitional technology though too expensive right now. Finally, there were also some geographical differences. We observed that respondents from Beijing were more likely to be concerned that CCS would have a negative impact on the security of energy supply in China. Therefore, the smaller share of opinion leaders from Beijing in contrast with the 2006 survey may partly explain why fewer respondents viewed CCS as very negative from an energy security perspective when compared with the 2006 study. Question: What is your view on the perceived impacts of largescale deployment of CCS on national energy security in the long term? Though there were differing views on CCS in China, nearly 90% of respondents from academia expected there would be more CCS research and development (R&D) funding available. Of course, most CCS related R&D funding is funded by the government and, to a lesser extent, by energy companies, and they were slightly less supportive of more R&D, 77% and 71%, respectively, but they were still quite supportive. 38% of opinion leaders from academia and research institutes claimed they would significantly increase resources on CCS R&D while another 36% said they would moderately increase resources for CCS R&D. It is of course not surprising to find academics and researchers supporting more R&D. As illustrated in the regression analysis presented in Appendix C, industry and government respondents tend to believe deploying CCS would worsen energy security. Perhaps more interesting, those who claimed to spending more time on CCS did not have a consistent opinion on the impact of CCS on energy security. A more general point made by respondents is that there are a number of important uncertainties with regard to the future evolution of both Chinese and international climate change and energy policy. Issues such as the economics of CCS was cited as an important element in their decision-making process including concerns over the risk and the costs of deployment. Fuss et al. [29] provide a framework for addressing such risks using a real options approach. Another important aspect is the uncertainty over the choice of the technology itself, which is discussed in the next section.

5. Technology preference in CCS demonstration project 5.1. Scale of the first commercial demonstration project

Fig. 4.3. Perceived impacts of large-scale deployment of CCS on energy security in the long term (2006 vs. 2009).

As illustrated in Fig. 5.1, there was no consensus with respect to the scale of the first CCS demonstration project in China. Generally speaking, 30–100 MW units (or 100,000–400,000 tons CO2 captured and stored) was most popular at 22%. Although most of the new coal-fired power generation capacity is in 600 MW and larger units, most respondents believed the scale of the first capture unit should be restricted to less than 100 MW, because many believed significant uncertainties remained with CCS technologies, CO2 storage sites, transportation and financing schemes. Despite the fact that CCS projects of less than 10 MW (or <40,000 tons CO2) are unlikely to be considered as a commercial scale demonstration, 13% of respondents still selected this option. During face-to-face interviews, two respondents who believed capture and storage technologies were mature, favoured larger (>600 MW) demonstration projects because they believed small scale projects would increase the cost of avoiding CO2. Some Local Government officials preferred a larger demonstration project while acknowledging that

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Fig. 5.1. Preferred scale of the first CCS demonstration project in China.

larger projects might eventually require national government approval. Only one interviewee of the 31 consulted claimed to have some knowledge of the impact of scale on the design and costs of storage and transportation. A respondent from a Chinese offshore oil company believed the scale of the project also relies on the utilization capacity, and he raised the EOR potential as an example. Two foreign oil company officials believed the volume captured should be above 1 million tonnes in order to claim that it is of ‘commercial scale’. Question: What would be the appropriate installed capacity for the first demonstration capture unit? 5.2. Capture technology preferences for demonstration plants Respondents were provided with short descriptions of alternative capture technologies. Of the two major technologies, postcombustion capture (41%) received slightly higher support than pre-combustion capture technologies (31%). However, respondents from industry tended to favour pre-combustion capture (Fig. 5.2). Oxyfuel, as a relatively new technology in China, received minimal support. For this option, a quarter of respondents selected ‘unsure’, including 40% of government officials. During face-to-face discussions, four government interviewees suggested that there should be an option of selecting ‘all’, because the population and future electricity demand of China would be large enough to accommodate all clean coal technologies.

In follow-up discussions, proponents of post-combustion capture often cited the fact that most existing and planned new coal-fired power plants are conventional pulverised-coal units. Nearly a third believed China had technology advantages in postcombustion capture, because China had low cost chemical process equipment and adequate experience in CO2 removal process design. An interviewee from a power company currently developing an IGCC project believed that both post-combustion and precombustion technologies were important and that China should develop the separation technologies (such as physical solvents, chemical solvents and membranes) through technology transfer when building up large demonstration projects. Two equipment manufacturers said Chinese companies had excellent skills in manufacturing boilers, steam turbines and gas handling but were relatively weak at producing gas turbines. Some CCS supporters from government perceived demonstrating the post-combustion CO2 removal at scale in China would contribute to a steep learning curve, given Chinese experience in the cost reduction of FGD. A senior manager whose institution had experience in designing and operating pilot projects believed the costs of post-combustion capture would actually be much lower than most international studies. On the other hand, six respondents from power companies were concerned about the extra cost of post-combustion capture and would rather CCS demonstration projects apply alternatives that, they believed, were more likely to receive sufficient financial incentives. During the follow-up qualitative discussions, some

Fig. 5.2. Capture technology preferences in first commercial CCS demonstration project in China (respondents were presented with explanations of each capture method based on IPCC CCS special report alongside the question).

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expressed concern that sulphur in the flue gas of conventional power plants, would increase the costs of the CO2 removal process. As a result, some suggested that ammonia be employed rather than using amines to demonstrate capture as power companies may be reluctant to run a more expensive sulphur removal process. Opponents of pre-combustion frequently cited a ‘lack of experience’ in applying gasification in generating electricity. However, in face-to-face interviews, others argued for pre-combustion technology because, according to them, it is ‘clean, highly efficient, technically more advanced and could potentially be applied in poly-generation, coal to liquid’, consistent with a study by Liu and Gallagher [14] who expected pre-combustion technology would be a leading CCS option in China. One manager from a large state-own power company selected pre-combustion because two other large-state-owned companies were developing IGCC, although he did not know the details of the differences in technology. Another respondent, an expert in both thermal and chemical engineering, was confident in the prospects of IGCC with precombustion capture. However, he noted no IGCC project was in operation in China although the Chinese energy industry had rich experience in applying NHD technology (usually called Selexol outsides China) to remove CO2 or other acid gases, which could be used to remove CO2 from high partial pressure gas stream in an IGCC power plant. One senior manager of a foreign oil company favoured ‘pre-combustion’, and believed technical experts in oil companies would prefer gasification rather than conventional coal combustion because of greater comfort with the process. Three interviewees from manufacturing companies worried that the cost and difficulties in manufacturing gas turbines for hydrogen enriched gas steam from the shift process. However two of them still perceived demonstrating pre-combustion would be more valuable, providing opportunities for technology transfer. Many supporters of pre-combustion capture expected a special tariff for IGCC with CO2 capture would be a potential financial driver to demonstrate the technology, but a minority still thought polygeneration would be a better choice considering the value of hydrogen. Very few selected Oxyfuel as the preferred first demonstration project although Europe already has experience in operating a 30 MW Oxyfuel pilot plant at Schwarze Pumpe [30]. Four respondents from power design institutes and power companies believed China had no technology advantage or even sufficient technical

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knowledge to build an Oxyfuel demonstration project, but they were interested in how an Oxyfuel boiler would operate. However, one senior academic, in face-to-face discussions, believed it was a good opportunity to import foreign technologies and achieve technology transfer and strongly favoured Oxyfuel and pre-combustion capture rather than post-combustion capture, because he thought the ammonia process to capture CO2 is mature and the MEA process is old and commercially available. Another academic thought Oxyfuel had significant potential for cost reduction via technology breakthroughs in oxygen separation from air. In the questionnaire, we listed a largely untested option of ‘air separation’ as a response, to test whether some respondents were reluctant to say ‘unsure’ and pretended to know capture technologies. We found that only one respondent selected this option. Question: Which of the following capture technologies should be deployed in the first commercial scale CCS coal demonstration project in China? 5.3. Preferences regarding storage methods for demonstration plants Though experience with enhanced oil recovery (EOR) and enhanced coal bed methane recovery (ECBM) has been limited, both were still viewed as offering more benefits (e.g. extra oil/gas supply) for the Chinese population as opposed to simply reducing emissions and were thus favoured by over two thirds of opinion leaders (Fig. 5.3). It should be noted that there is limited storage capacity and that coal may not be used once CO2 has been injected for ECBM ([31], pp. 219 and 221), but these effects were not described to respondents. The high levels of support for ECBM may be due to policy support at the national level. In contrast to capture technology options, there was a more clear-cut consensus amongst respondents regarding storage methods. During face-to-face interviews, all three stakeholders from the oil and gas sector believed EOR was the preferred near term option for CO2 storage in China. All these geologists had a strong interest in increasing oil and gas production and were less interested in the climate change benefits from storing CO2 in saline aquifers. One geologist was especially concerned about monitoring and liabilities after CO2 injections had ceased. Two interviewees from power transmission companies were also very interested in storage and transportation options. One of them suggested the flexibility of producing electricity, capturing CO2, injecting CO2, selecting site

Fig. 5.3. Storage methods preferences in first demonstration project in China (opinion leaders were presented with explanations of each storage method based on IPCC CCS special report alongside the question, but stakeholders were not told that ECBM may ‘sterilise’ coal reserves).

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and integrating with alternative low carbon electricity should all be demonstrated in the project. The other asked whether CO2 storage issues needed to be assessed in the design of future power grid. Question: Which of the following carbon storage technologies should be prioritized in the first CCS coal demonstration project in China? 5.4. Analysis of regional differences To investigate the regional differences of stakeholders’ perceptions, we analysed the perceptions of stakeholders in Beijing (n = 49), relatively wealthy coastal provinces with limited onshore fossil fuel reserves (Zhejiang, Jiangsu, Guangdong, (n = 22), five major coal production provinces (Inner Mongolia, Shanxi, Shaanxi, Henan, Shandong, n = 19) and five major onshore oil and gas production provinces (Xinjiang, Heilongjiang, Hebei, Shandong, Sichuan, n = 22). As summarised in Table 5.1, based on data of online survey, we found stakeholders from coal and production region were more likely supporting pre-combustion capture. This is perhaps due to growing interests in coal-to-liquid and existing and planning capacity in refinery plants. In the same time, slightly more stakeholders in wealthy coastal provinces feel interested in pre-combustion technologies, probably due to their impression of IGCC (as a proxy of pre-combustion technology) is cleaner than post-combustion. During follow-up discussion, one manager from a Guangdong power company cited that Guangdong government has no longer approved new conventional coal-fired power plants but there might be some coal-gasification units in chemical or IGCC projects. Almost every stakeholder from Beijing (except for the NGOs and two academics) selected either EOR or ECBM as the preferred storage option on the first CCS demonstration project in China. Unsurprisingly, stakeholders from oil producing areas tended to support EOR while respondents from coal mining provinces generally preferred ECBM. More than half of supporters of saline aquifer came from major coal producing provinces. A majority of the very few support on storing CO2 in depleted oil or gas field were coming from respondents in onshore oil production areas. One government official responsible for regional planning post believed storage in depleted oil fields would create revenue for operators and service companies because the decline in oil production. On the other hand, a manager from an onshore oil field suggested the possibility of beginning with a demonstration project to store CO2 in a depleted oil field but that EOR (i.e., restarting oil production) could be an option in the future. In addition, a director of a large stateowned power company in Beijing thought it would be very difficult to cooperate with other large state-owned companies (such as oil companies) to develop CCS demonstration projects within the

Table 5.1 Regional differences in capture and storage technologies preferences. Beijing

Wealthy coastal provinces

Coal producing provinces

Oil producing provinces

Sample size, n

49

22

19

22

Capture Post-combustion (%) Pre-combustion (%) Oxyfuel (%) Unsure (%)

45 33 4 18

36 50 5 9

26 47 0 26

32 50 0 18

Storage ECBM (%) EOR (%) Depleted oil and gas field (%) Saline aquifer (%) Unsure (%)

43 43 4 4 6

23 36 9 0 32

53 11 5 14 16

14 50 32 0 5

Chinese institutional context, unless the project is coordinated by senior officials in Chinese government. His preference was to utilize CO2 from potential demonstration projects for other industrial purposes and therefore selected ‘unsure’ for the storage question. During face-to-face interviews, energy experts and government officials from coal-producing regions appeared less concerned about the effect of the energy penalty from CCS on the security of Chinese energy supply. Two interviewees from coal mining regions believed the critical issues for coal supply are: ‘transportation bottle necks’, ‘coal pricing and electricity tariff control’, and ‘mine safety’. Though CCS will first be piloted by power companies in China, we found in face-to-face interviewees that upstream energy companies (oil and gas, and coal) were more willing to demonstrate CCS technologies than power companies. In addition to capture from power plants, one senior oil company manager insisted that given high capture costs in the power sector, it would be more sensible to demonstrate separating CO2 from natural gas at the gas field and inject the CO2 for EOR.

6. Conclusions The majority of respondents viewed climate change as a serious problem and 20% perceived it as a challenge in the near future. We found a strong link between those who viewed CCS as necessary and those who believed climate change was a serious problem. The majority of respondents believed that under the current policy framework, it would be very difficult to achieve deep cuts of carbon emissions in China or globally. A large majority of Chinese stakeholders did not view CCS as a new concept and widely acknowledged it as an important technology in reducing emissions of greenhouse gases, however, a small number of the respondents were concerned about the reliability of CCS technologies, availability of storage sites, and coal supply issues. A number of the respondents were concerned about the energy penalty associated with CCS and its impact on the long-term sustainability of coal supply in China. However, the proportion of respondents with such concerns was much lower than in 2006. A number of stakeholders now seem to have adopted a strategic view that coal is neither a sustainable nor a reliable energy source for China in the long term unless CCS technology was installed. The striking difference between Chinese stakeholders, who generally believed the energy penalty would have a negative impact on the security of energy supply and Europeans who perceived CCS as generally enhancing energy security is a subject that merits additional study. There was no consensus amongst the respondents over the appropriate scale of the first CCS demonstration project. Though most new coal-fired power plants built in recent years were at least 600 MW, three quarters thought a demonstration project should be less than 600 MW. Partial capture from a full-scale power plant could therefore be a necessary step and one might expect that there will be both smaller and larger scale demonstrations in the future. With regard to preferences over which capture technologies should be employed in the first demonstration project, in general, slightly more respondents preferred post-combustion capture technologies, however, energy industrial stakeholders slightly favoured pre-combustion capture. It is therefore likely that both pre- and post-combustion technologies will continue to be developed in China for the foreseeable future. A majority of stakeholders from power sector felt more confident about the technologies to capture CO2 after combustion, but some worried about the impact of capture on their profit if the technologies would be mature and widely deployed. The reason of opposing pre-combustion capture

Appendix A. Previous CCS consultations in China

Sample

c

No. of institutes

No. of stakeholders

Questionnaire format

Project

Year

No. of stakeholders

No. of institutes

BP/DTI CCP2 Communications [11] EPRG [32]

2006

186

72

115

39

2007

62

31

33

CAPPCCO [23]

2008

202

84

HIT Study [7]

2008

37

STRACO2 [33]

2009

60

NZEC [25]

2009

256

No. of questions

Path dependent

Data Collection

Feature

20

No

Focus on long-term deployment, including Beijing, Wuhan, Pearl River Delta and national stakeholders.

17

36

Yes

103

32

23

No

31

13

Face-toface, telephone Face-toface, telephone Face-toface, telephone Face-toface

60

35

35

21

n/a

n/a

129

131 + 9a

68

61b

Yes

Online, face-tofacec

Explore the institutional framework of Chinese sector, more qualitative assessment Focus on industry opinions and investigated stakeholder behaviour patterns in decision-making Conduct semi-structured Interviews to acquire information about barriers to and incentives for the CCS deployment in China Understand technology and policy preference, risks concerns as well as potential financial sources Investigate the technical, regulatory and financial schemes for the first CCS demonstration project as well as long-term deployment

X. Liang et al. / Applied Energy 88 (2011) 1873–1885

a b

Respondents

One hundred and thirty one participated in online survey, 22 joined face-to-face interviews and additional 25 respondents joined but have not fully completed the online survey. Each respondent answers 30–35 questions. Thirty one stakeholders were consulted face-to-face, and 22 also participated in online survey.

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Appendix B. List of Chinese respondents’ institutions Government bodies (official roles)  State Council (responsible for formulating national energy policy)  National Energy Leading Group (responsible for formulating national energy policy)  National Development and Reform Commission (NDRC) (responsible for formulating energy policy, climate policy; approve new projects, approve large energy demonstration projects)  Ministry of Environmental Protection (responsible for formulating environmental policy, approve new projects; monitor project operating)  State Electricity Regulatory Commission (SERC) (responsible for regulating power sector, approving new projects)  Ministry of Science and Technology (responsible for technology roadmap, R&D and technology transfer)  Ministry of Finance (responsible for formulating tax or subsidy scheme for new technology; manage CDM fund)  State Administration of Work Safety (concern safety issues in energy project, and additional coal mining accidents concerns)  Ministry of Land and Resources (approval of land for power plants and other energy facilities)  State-owned Assets Supervision and Administration Commission of the State Council (owners of large state-owned power firms)  China Electricity Council  Local Governments (including Guangdong, Guangzhou, Shenzhen, Wuhan, Jilin, Beijing, Hong Kong SAR) Large state-owned power generation companies and its subsidiaries (industry)  Huaneng Group  Greengen (subsidies of Huaneng Group)  TPRI (subsidies of Huaneng Group)  Datang Power Intl.  Guodian Power  China Resource Power  China Shenhua Group (largest coal mining firm, with a large amount of power generation assets)  Yan Coal  China Power Investment Co. and their subsidies Provincial, local and private-owned power companies/power equipments providers (industry)  Zhejiang Power  Shenzhen Power  Guangdong Power Electric  Guangzhou Holding  Nanshan Power  Kaidike Power  Baochang Power  Harbin Boiler  Shanghai Electric  GE China Oil and gas companies/technology and equipment (oil, gas processing, transportation) providers (industry)  CNPC  CNOOC  COSL  SINOPEC  BP China  Shell China  CNOOC-Shell  Schlumberger China  AIRPRODUCT Asia  Yantai Raffles  Chiwan Base  China Merchants Group Grid companies State grid, southern grid and their local subsidiaries Academic institutions  Tsinghua University  Chinese Academy of Science (Incl. Institute of Physics, Institute of Oceanology)  Chinese Academy of Social Science  China Coal Information Institute  Peking University  Renmin University  China Petroleum University

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North China Electric Power University Shanghai Academy of Social Science Tongji University South China University of Technology Zhejiang University

Other institutions  China Development Bank  Asian Development Bank  The World Bank  Climate Change Capital  China Construction Bank  BNP Paribas  China Merchants Bank  Bank of China  ICBC  Yan Coal  People’s Daily  Science & Technology Daily  Guangzhou Marine Geological Survey  The Swire Group  Greenpeace  The Climate Group  World Wild Fund for Nature (WWF) Note: Financially independent institutions, for example, subsidiaries within a group, are counted as different institutions. However, institutions listed above are consolidated to highest group or ministry level.

Appendix C. Tables of logit model results Logit models for perceptions of CCS in deep cut of greenhouse gas emissions (1 = if CCS is viewed very necessary or probably necessary in deep cut of GHG emissions, else 0) Variables

Categories

GDP per capita Average time spent on energy

1 = if GDP > national average, else 0 0 = if 0% 1 = if >0% < 10% 3 = if P10% < 30% 5 = if P30% < 50% 7 = if P50% < 70% 9 = if P70% < 90% 10 = if P90%

Average time spent on CCS

Parameter estimate

0 = if 0% 1 = if >0% < 10% 3 = if P10% < 30% 5 = if P30% < 50% 7 = if P50% < 70% 9 = if P70% < 90% 10 = if P90%

Industry Academia Government Office in Beijing Office in South China Provinces

1 = if working 1 = if working 1 = if working 1 = if working 1 = if working Fujian)

in in in in in

industry institutions, else 0 academic institution, else 0 government institution else 0 Beijing the South (Guangdong, Guangxi, Hainan,

Role of climate change at institution

5 = if the role of climate change is very important 4 = if the role of climate change is important

Standard error

0.13

0.37

0.05

0.06

0.03

0.08

0.92* 0.07 0.66 0.17* 0.19*

0.43 0.43 0.43 0.07 0.09

0.31**

0.09 (continued on next page)

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Appendix C (continued) Logit models for perceptions of CCS in deep cut of greenhouse gas emissions (1 = if CCS is viewed very necessary or probably necessary in deep cut of GHG emissions, else 0) Variables

Categories 3 = if 2 = if 2 = if 1 = if 0 = if

* **

the role the role the role the role unsure

of of of of

climate climate climate climate

change change change change

is is is is

Parameter estimate

Standard error

Parameter estimate

Standard error

moderately important less important less important not important

Significance at 95% level. Significance at 99% level.

Logit models for perceptions of CCS on energy security (1 = if CCS is viewed very positive or slightly positive on energy security) Variables

Categories

GDP per capita Average time spent on energy

1 = if GDP > national average, else 0 0 = if 0% 1 = if >0% < 10% 3 = if P10% < 30% 5 = if P30% < 50% 7 = if P50% < 70% 9 = if P70% < 90% 10 = if P90%

Average time spent on CCS

0 = if 0% 1 = if >0% < 10% 3 = if P10% < 30% 5 = if P30% < 50% 7 = if P50% < 70% 9 = if P70% < 90% 10 = if P90%

Industry Academia Government Office in Beijing Office in South China Provinces

1 = if working 1 = if working 1 = if working 1 = if working 1 = if working Fujian)

Role of climate change at institution

5 = if the role of climate change is very important 4 = if 3 = if 2 = if 2 = if 1 = if 0 = if

* 

the role the role the role the role the role unsure

in in in in in

of of of of of

industry institutions, else 0 academic institution, else 0 government institution else 0 Beijing the South (Guangdong, Guangxi, Hainan,

climate climate climate climate climate

change change change change change

is is is is is

important moderately important less important less important not important

0.12

0.36

0.03

0.05

0.08

0.07

1.11* 0.46 1.19* 0.27* 0.14

0.47 0.41 0.49 0.12 0.08

0.18*

0.09

Significance at 95% level. Significance at 99% level.

is due to a lack of knowledge and a majority of new power plants would likely be conventional pulverised-coal in the next decade. Enhanced oil recovery (EOR) and enhanced coal bed methane recovery (ECBM) were considered to be the most attractive storage technologies for the first CCS demonstration project, unsurprisingly EOR was most popular with the oil and gas industry and in oil-producing regions and ECBM with the power sector and in coal-producing regions. The tendency to ignore storage options such as saline formations and longer-term needs may therefore need to be explicitly addressed by national policy-makers. Respon-

dents from Beijing also preferred post-combustion technologies over pre-combustion, whereas those in other regions tended to prefer pre-combustion. Although we have attempted a wider scale survey of respondents than in any previous study, the number of participants by region and by industry was still quite low which limits our ability to draw statistically significant inferences. Further, the number of face-to-face interviews, though a rich source of qualitative information, was also too low to be able to develop a consistent picture of the perceived concerns that extend beyond the scope of the sur-

X. Liang et al. / Applied Energy 88 (2011) 1873–1885

vey. The final important limitation was that the very highest levels of decision-makers (i.e., ministerial or CEO level) were not accessible and so one must be cautious in drawing conclusions from our survey of lower-ranking officials and executives. As China’s role in the international climate change negotiations continues to increase, it becomes all the more important to have a better understanding of future directions of thinking amongst policy elites and decision-makers from both the public and private sectors both on CCS and other key energy and environmental issues. The need for continued efforts to measure the views of opinion leaders will therefore grow in importance over time. Acknowledgements We would like to acknowledge financial support from the UK Department for Energy and Climate Change (DECC) through the UK– EU–China NZEC project. We acknowledge the assistance of Heather Haydock at AEAT and Jon Gibbins of Imperial College London for help with questionnaire design and for providing insightful comments. Bill Senior and Dan Ulanowsky contributed to questionnaire design and suggested many useful contacts. Hongliang Yang at the Asian Development Bank was instrumental in nominating stakeholders. Andrew Minchener, Paul Freund and Chris Hodrien provided excellent feedback on our draft report. Min Feng at LINKSCHINA implemented the online survey system design and administration. Finally, we owe special thanks to all survey respondents. References [1] China Electricity Council (CEC). Analysis and forecast of national electricity supply and demand and economic situation; 2010 [2009–2010]. [2] Energy Information Agency (EIA). International electricity generation; 2009. [accessed 05.05.09]. [3] International Energy Agency (IEA). World energy outlook 2009 – executive summary. Paris: OECD, International Energy Agency; 2009. . [4] Guan D, Hubacek K, Weber C, Peters G, Reiner D. The drivers of chinese CO2 emissions from 1980 to 2030. Global Environ Change 2008;18:626–34. [5] International Energy Agency (IEA). World energy outlook 2007 – China and India insights. Paris: OECD, International Energy Agency; 2007. [6] Massachusetts Institute of Technology (MIT). The future of coal; 2007. [7] Liang D, Wu W. Barriers and incentives of CCS deployment in China: results from semi-structured interviews. Energy Policy 2009;37:2421–32. [8] NDRC. China’s national climate change programme. China’s National Development and Reform Commission; 2007. [9] Andrews-Speed P. China and global climate change: contrasting views; 2007. [acc essed 19.10.09]. [10] Cheng Q. A portrait of China’s climate policy. Germanwatch; 2008. p. 18–19. [accessed 03.07.10]. [11] Reiner DM, Liang X, Sun X, Zhu Y, Li D. Stakeholder attitudes towards carbon dioxide capture and storage technologies in China. In: Proceedings, international conference on climate change, Hong Kong; 2007.

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