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 Energy 36 (2011) 1143e1154

Contents lists available at ScienceDirect

Energy
journal homepage: www.elsevier.com/locate/energy

Integrated energy strategy for the sustainable development of China

Linwei Ma, Pei Liu, Feng Fu, Zheng Li *, Weidou Ni
State Key Laboratory of Power Systems, Department of Thermal Engineering, Tsinghua-BP Clean Energy Center, Tsinghua University, Beijing 100084, China

a r t i c l e i n f o a b s t r a c t

Article history: We propose in this paper an integrated energy strategy based on a systems approach to address the
Received 11 May 2010 energy challenges and energy dilemma in China. First, we give a review of existing approaches to energy
Received in revised form planning and strategic management, followed by a discussion on the major relationships among energy,
18 November 2010
economical, environmental and societal systems. Next, we present a conceptual system model with
Accepted 20 November 2010
alternative solutions and clarify corresponding concepts. Based on the results, we propose, summarize,
Available online 8 January 2011
and present strategic ideas as policy implications for China’s decision makers. In conclusion, we deter-
mine that China should enhance strategic planning and regulation from a life cycle viewpoint of the
Keywords:
Energy challenge
whole society, prioritize energy saving, continuously improve incumbent energy, and rationally develop
Energy strategy alternative energy.
Alternative energy Ó 2010 Elsevier Ltd. All rights reserved.
Energy savings
Sustainable development

1. Introduction
With a tremendous and ever-increasing energy demand, heavy
environmental pollution, and increasing greenhouse gas (GHG)
emissions, the development of China has attracted extensive
attention both domestically and globally. Chinese and international
scientists have recognized that an appropriate energy strategy is
vital if China is to realize its national target of sustainable develop-
ment. Previous researches set four objectives [1] for the sustainable
development of the energy system in China. These are, to first, meet
the power requirement to supply continuous economic growth; to
ensure the security of China’s energy supply; to guarantee the
protection of public health and the environment; and, finally, to
eliminate energy poverty. The major challenges to fulfilling these
objectives are categorized into five groups [2e5] as follow:
1. An immense and rapidly increasing energy demand: During the
period between 2000 and 2009, the total primary energy
consumption (TPEC) of China increased from 0.97 billion
tonnes oil equivalent (toe) to 2.17 billion toe, with an average
annual growth rate of approximately 9.4%. Considering that the
TPEC per capita of China is relatively low, there is still extensive
room for further growth in energy demand. As reported by BP
[6] and the World Bank [7], the TPEC per capita of China in 2008
was only 1.51 toe. Comparatively, the world average was
* Corresponding author. Tel.: þ86 10 62795735; fax: þ86 10 62795736.
E-mail address: lz-dte@tsinghua.edu.cn (Z. Li).
1.69 toe, the UK, Germany, Japan and France ranged from 3.45
to 4.16 toe, and the US had one of the highest at 7.56 toe. If
China’s TPEC per capita reaches the level of the UK, Germany,
Japan and France, its total TPEC will more than double.
2. A shortage of liquid fuel and high dependency on oil imports:
Between 2000 and 2008, the oil import dependency (OID) of
China increased from 33.8% to 50.9% [8]. In 2009, China’s OID
reached 51.3% with net imports of 199 million tonnes (Mt) [9].
China’s domestic conventional oil production is projected to
peak at a level between 185 and 200 million tonnes per year
(Mt/yr) before 2020 [10,11]. While the potential of unconven-
tional oil remains uncertain, the gap between the oil supply
and demand, driven mainly by growth of the transportation
sector, will be satisfied primarily by oil imports, increasing OID
and worries about energy security.
3. Severe conventional pollution: For China, the main source of air
pollution remains the direct burning of coal. For metropolises,
vehicle exhaust gas has become another important source
[3,4]. Although emission standards have been improving, most
of their impact is offset by the continuously growing energy
demand. Moreover, rising concern about public health and
environmental protection has also brought more serious
constraints to energy safety and emissions control.
4. Lack of clean energy in small cities and rural areas: In rural China,
especially northern China, the fraction of traditional biomass as
a portion of total household energy consumption has been
decreasing and gradually replaced by commercial energy, but
commercial energy typically takes the form of the direct

0360-5442/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.energy.2010.11.035
1144 L. Ma et al. / Energy 36 (2011) 1143e1154
burning of coal briquettes or powder, [12] which is heavily
polluting. The supply of clean energy, such as electricity, gas,
and liquid fuel, is still relatively small and should be increased.
5. Vast and increasing GHG emissions: The energy-related carbon
dioxide (CO2) emissions of China reached 6.1 billion tonnes (Gt)
in 2007, overtaking the US (5.7 Gt in 2007) as the world’s
largest contributor to new added global CO2 emissions [13]. In
a business as usual scenario, the energy-related CO2 emissions
of China are predicted to peak at a level between 9 and 14 Gt
around 2040 [14]. Following this scenario, China will face
strong resistance on the international stage, where many are
operating under the assumption that the concentration of CO2
in the atmosphere must stabilize between 450 parts per million
(ppm) and 550 ppm to avoid damaging global temperature
increases. Stabilizing in this range requires that global energy-
related CO2 emissions must peak between 2020 and 2025 at
a level of about 33 Gt, then decrease to a level between 25.7 and
32.9 Gt before 2030 [13].
To tackle each individual challenge described above, there exist
many available or soon-to-be-available technical options. Issues of
energy demand, security of oil supply, and energy poverty could be
addressed by different means of coal conversion, for instance, clean
coal combustion, coal to liquids, coal to gas, and others. Environ-
ment protection could be strengthened by more rigid emission
standards and the development of renewable energy. Carbon
dioxide emissions could be greatly reduced by the development of
non-fossil fuels, such as nuclear power and renewable energy, and
Carbon Capture and Sequestration (CCS) systems.
However, these challenges together compose an energy
dilemma for China, that is, no single energy technology or combi-
nation of technologies exists that can address all these challenges
whilst meeting all the objectives of sustainable development. For
instance, a reduction of conventional air pollution and GHG emis-
sions could be achieved by developing nuclear and renewable
energy, but at a much higher energy cost. The development of CCS
systems could realize near zero carbon emissions from the
consumption of fossil fuels, but at the price of reduced energy
efficiency and increased energy cost. The pressure of oil security
could be released in the near-term future with the development of
large-scale coal-derived synthetic fuels, but at the price of more
GHG emissions, higher energy cost, and lower energy efficiency.
Fig. 1 illustrates the nature of China’s energy dilemma [4]. In
a scenario without coal to liquids (CTL) where non-fossil power
Fig. 1. An illustration of China’s energy dilemma [4].
(NFP) accounts for only 15% of the total power supply, OID could be
as high as 75%. If China determines to reduce its OID by developing
CTL, the decision would lead to higher fossil fuel consumption and
CO2 emissions. In a scenario with 30-percent-NFP, the total annual
fossil fuel consumption rate would be 500 million tonnes coal
equivalent (tce)1 lower and CO2 emissions would be 300 Mt lower
than the 15-percent-NFP scenario. If China applies CCS in the
30-percent-NFP scenario, CO2 emissions could be further reduced
by about 400 Mt, but the total annual fossil fuel consumption rate
would increase by about 250 million tce. A more detailed modeling
of China’s energy dilemma can be found in our recent study [15].
Due to the energy dilemma, the solution to the energy chal-
lenges should be based on how to systematically balance the
multiple objectives of sustainable development, which are usually
inconsistent or even in conflict with each other. This would be
difficult to achieve if the only focus is ‘energy’, that is, the technical
system composed of primary energy production, energy conver-
sion, energy transportation, and energy utilization. Therefore,
before radical innovation of energy technologies takes place, an
integrated energy strategy considering the whole energy system e
the related parts of the economy, environment, and society e
should be proposed and applied to facilitate a smooth transition to
a future, sustainable energy system.
Strategic solutions to China’s energy problems them have been
proposed from many angles, but many issues warrant further
review. Some model-based studies greatly underestimated the
energy demand growth rate and energy supply development in
China, producing rather conservative conclusions [1,16,17]. Some
approaches successfully address a typical energy problem, but they
lack a systems-level viewpoint. These approaches include reviews
of China’s energy situation [18], energy diversification and energy
safety [19], CO2 emission control [20], low carbon economy [14,21],
and updated model-based analysis [22]. At the same time, some
argue that energy system models and corresponding methodolo-
gies originally developed for studying energy issues in developed
countries should not be directly applied to developing countries, in
particular China [23,24]. This is mostly because the specific energy-
economy-environment-society system dynamics and complexities
of developing countries are rather different from those of devel-
oped countries. For instance, energy issues in China are unique
because of its enormous and geographically concentrated pop-
ulation, extensive infrastructure building, unbalanced market,
changing life style, and reforming social institutions [25,26]. As
a result, China should further study its own unique energy system
to develop its own integrated energy strategy for sustainable
development [27].
In our previous work, some of these issues have been addressed,
including industrial development [28], energy for sustainable
urban mobility [3,4], CO2 emissions control [29], energy challenges
and some strategic solutions [5], energy savings [30], alternative
energy development [31], planning and design of energy systems
[32e35], and methodologies of energy systems engineering
[36e39]. In this paper, the aforementioned studies are integrated
using a systems approach to provide an overall systematic view of
China’s energy issues and corresponding solutions. The key point of
the systems approach is that a problem can be better understood
under a systematic framework and from a life cycle viewpoint.
Relationships are regarded as more important than a single
component [40]. Qualitative analysis based on heuristic analyses is
chosen rather than quantitative analyses based on existing
1
The authors’ previous work used tce as the energy unit instead of toe. Currently,
tce is popularly used in China for energy measurement. 1 tce is approximately equal
to 0.7 toe.
Table 1
A brief review of energy planning and strategic management efforts by Chinese government in recent years.
Item Efforts
The 11th Five-Year Outline the biding target of energy saving and conventional
Plan emission reduction in the 11th Five-Year Plan of National
Economic and Social Development in 2006 [47].
The 11th Five-Year Plan for Energy Development [50].
The 11th Five-Year Plan for Coal Industry Development[52]
The 11th Five-Year Plan for Renewable Energy
Development [53]
The 11th Five-Year Plan for Sulfur Dioxide Control for
Existing Coal-fired Power Plants [54]
The 11th Five-Year Plan for Rural Hydropower and
Electrification [56]
Rural Biogas Engineering Construction [58]
Midterm and Long Mid-term and Long-Term Plan for Energy Saving [60] in 2004
Term Plan
Mid-term and Long-Term Plan for Nuclear Power
Development in 2007 [61]
Mid-term and Long-Term Plan for Renewable Energy
Development in 2007 [62]
Energy White Paper issued in 2007 that put forward the basic
precepts of energy strategies: prioritize energy saving, mainly
rely on domestic energy, diversify energy supply, rely on
advances of science and technology, protect the environment,
and strengthen mutually beneficial international cooperation [63]
Announced the CO2 reduction target in 2009 [48,64]
(ahead of Copenhagen Climate Conference)
Institutional Foundation of National Leading Group to address climate change,
change energy saving and conventional emissions reduction in 2007.
Promote Energy Administration of NDRC to National Energy
Administration in 2008
Foundation of National Energy Board in 2010
Related laws: Environment Protection Law drafted and
implemented in 1989 [65], Renewable Energy Law drafted
in 2005 and modified in 2006 [66], Energy Saving
Law drafted in 2007and implemented in 2008 [67]
Representative objectives and targets
Energy consumption per GDP in 2010 to be
reduced by 20% and major pollutants to be reduced
by 10% comparing to the year 2005
To satisfy TPEC of 1.89 billion toe in 2010
To control coal production at 2.6 Gt in 2010
Taken some examples. The 2010 target of hydropower
capacity is 190 GW, wind power is 10 GW and
solar PV is 0.3 GW
In 2010, 90% of existing coal-fired power plants meet
the SO2 emission standard. Total SO2 emission reduced
by 5.02 million ton, and SO2 emission performance
reduced by 57.8% comparing to 2005
To increase 4.77 GW rural hydropower capacity in 2005e2010
To supply biogas for 4000 (1700 in 2005) rural families in 2010
To continuously improve energy efficiency. TPEC is expected
to be reduced from 2.8 to 2.1 billion toe in 2020 via energy
saving efforts
Nuclear power capacity to be 400 GW in 2020.
Currently is only 9 GW
The fraction of renewable energy in TPEC to be 10% in 2010
and 15% in 2020
To strive to build a stable, economic, clean and safe energy
supply system to support the achievement of sustainable
socialeeconomic development
To reduce the carbon intensity (CO2 emissions per unit of
GDP) in 2020 to 40e45% that of 2005. To reach this target,
China will aim for non-fossil energy to be 15% of TPEC in 2020
and will also increase 40 million ha forest area in 2006e2020
Strengthen the coordination of related energy issues
Strengthen energy planning and strategic management
Strengthen strategic decision making and coordination,
especially for energy security
Effects
Energy intensity was reduced but at a speed slower than
expected and enormous effort is required in 2010 [48].
The amount of major pollutants began to decrease
(dust and ammonia (in water) in 2006, SO2 and COD
in 2007, and NOx in 2008 [49].
Energy demand is more than expected. TPEC reached
2.17 billion toe in 2009 [51].
Coal production increased too rapidly. Already reached
2.96 Gt in 2009 [9]
In 2009, the installed capacity of hydropower was 197 GW,
wind power was over 20 GW and solar PV was 0.2 GW [9]
The total SO2 emissions of coal-fired power plant began to
decrease in 2007, and SO2 emission performance began to
decrease in 2006 [55]
L. Ma et al. / Energy 36 (2011) 1143e1154
In 2008, the installed capacity of rural hydropower had
increased 8.1 GW compared to 2005 [57]
More than 3000 rural families used biogas in 2009 [59]
Energy efficiency improved,. but TPEC was already more
than 2.1 billion toe as mentioned above
In 2009, the nuclear power capacity under construction
was 21.9 GW [9]
The fraction of non-fossil energy (including nuclear)
reached 9.1% in 2009 [51]
Increased the publicity of China’s energy strategy,
but no clear binding targets
Lack of strategic planning and implementing agency
Insufficient authority to make decisions at the
national level
e
1145
1146 L. Ma et al. / Energy 36 (2011) 1143e1154

Table 2 These approaches helped release pressure on energy supply,

Some statistics of industrialization, urbanization and motorization in China. local public health, and environmental protection in the near-term,
Item (Unit) 2000 2003 2004 2005 2006 2007 2008 but long-term energy challenges still exist. China’s energy demand
The contribution of secondary 45.9 46 46.2 47.7 48.7 48.5 48.6 growth will continue at a tremendous pace in conjunction with
industry to GDP (%) rapid economic growth, and it will exacerbate the severity of the
Urbanization ratio of 36.2 40.5 41.8 43 43.9 44.9 45.7 energy challenges facing China, especially energy security and
population (%)
climate change. Several major governmental intuition changes and
Civilian car ownership 16.09 23.83 26.94 31.60 36.97 43.58 64.67
(million) the announcement of GHG reduction targets (Table 1) have shown
the determination of the Chinese government to enhance its energy
management at a national level. Still, an integrated energy strategy
that can address both near-term and long-term challenges is lack-
theories. Moreover, many approaches based on heuristic analyses
ing. Multiple strategic solutions must be proposed and applied to
have appeared recently, for instance, energy efficiency [41], energy
coordinate the sustainable development of energy, economy,
and environmental management [42], urbanization [43], economic
environment and society.
structure [44], energy consumption [45], and rural energy [46].
This paper first introduces the recent efforts of China’s energy
3. The major relationships between energy and economic,
planning and management strategy, then analyzes the major rela-
environmental, societal systems
tionships between energy, economy, environment, and society.
Afterwards, we propose a conceptual model of possible strategic
3.1. Energy demand growth
solutions and clarify corresponding basic concepts. Finally, from the
results, we suggest policy implications for energy for the sustain-
Energy demand is the main connection between an energy
able development of China.
system and an economy. The main driving force of China’s energy
demand is the rapid and simultaneous industrialization, urbani-
zation and motorization processes, which all require extensive
amounts of infrastructure building and consumption increase [3,4]
2. Recent efforts of China’s energy planning and strategic
as demonstrated by the growth in secondary industry as
management
a percentage of GDP, ratio of urbanized population, and civilian car
ownership between 2000 and 2008 (Table 2) [8].
Considerable effort has been invested in recent years to
Secondary industry absorbed about 70% of total energy
strengthen China’s energy planning and strategic management.
consumption between 2000 and 2008, and it also drove China’s
Table 1 lists numerous initiatives that have been enacted since 2003
energy intensity (energy consumption per unit of GDP) far above
[47e67]. These approaches have proven effective for the sustainable
that of developed countries. Most of the industrial products were
development of China in some aspects. For instance, energy effi-
consumed in infrastructure construction or exported to other
ciency has continuously increased since the implementation of
countries, while domestic consumption of industrial products
energy saving policies and the Energy Saving Law. Major air
remained rather small.
pollutants began to decrease after the implementation of reduction
As for urbanization, every year over ten million people move to
targets for major pollutants. Also, the installed capacity of nuclear
cities to pursue a better life, producing a huge demand for new
power and major renewable energies increased rapidly after the
infrastructure. In 2007, the energy consumption per capita in
implementation of nuclear power and renewable energy develop-
China’s urban areas was three to four times that in the rural areas.
ment plans as well as the Renewable Energy Law.
Growing family income also has also led to an explosion of auto-
Unfortunately, the effect of these approaches has been rather
mobile production and purchases in China. This trend is further
poor in other aspects. For instance, the growth of total energy
stimulated by the government’s policy of encouraging automobile
demand is out of control. The structure of the energy system still
purchases in rural areas. As a result, oil demand has also increased
remains coal-dominant because the growth of coal production is as
greatly. Between 2001 and 2007, oil (gasoline and diesel)
rapid as the growth of nuclear power and renewable energy.
consumption by automotives increased from 66.5 Mt to 126.8 Mt,
Although targets for GHG reduction and energy diversification up
causing an increase in the fraction of transportation in the total oil
to 2020 have been set, China still lacks a clear technology pathway
consumption from 31% to 37% [8].
to realize these targets as well as targets for total energy demand
Although the growth of China’s energy demand seems to be
and coal consumption.
inevitable in the near-term future, its long-term trend can only
The main strategic solutions implemented thus far are to:
be understood from a life cycle view of the whole society on the
scale of hundreds of years. According to international experiences
1) Improve energy efficiency, particularly technical efficiency.
[28,68,69], the life cycle of energy demand growth of a society is
Although adjusting the economic structure is also emphasized,
divided into two phases, as illustrated in Fig. 2.
its effect is limited as the contribution of secondary industry2 to
In the first phase (China’s current path), energy consumption
the gross domestic product (GDP) has been increasing, shown
increases continually until it reaches a peak, driven by infrastruc-
in Table 2.
ture building and consumption growth, overcapacity, and back-
2) Improve the emissions standards for conventional energy, for
ward energy efficiency. China will stay in this phase until 2030 or
instance, coal-fired power generation.
even 2050 according to one scenario analysis [14]. Although it is
3) Diversify primary energy supply by developing nuclear power
difficult to smooth the peaking shape into a flat shape in an ideal
and renewable energy.
way, China must avoid the traditional and energy-intensive
pathway as many developed countries previously experienced.
2
The second phase is a declining and stabling one (experienced in
In China, primary industry usually means agriculture but without mining,
secondary industry includes mining, manufacturing and the energy industry, and
some developed countries) where, after peaking, energy consump-
tertiary industry means the service industries such as finance, communication, tion continuously decreases and finally stabilizes at a low level. The
retail etc. final, stable value mainly depends on the economic structure and
 L. Ma et al. / Energy 36 (2011) 1143e1154
Fig. 2. A life cycle, conceptual view of China’s energy demand growth over time.
energy service3 level of a country. Incorrect positioning of the energy
service level and economic structure could lead to much higher
energy consumption than what is required in a low carbon economy
and society.
Another important finding is that the relationship between
energy consumption and the energy service level is nonlinear, as
illustrated in Fig. 3 [70]. Currently, China is still at a point where
energy consumption and energy service level are both low. So,
the strategic position and policy mandate on the level of energy
service is essential for managing future energy demand growth.
The key actually lies in the non-energy-technical aspects, such as
social institutions, initial design of infrastructure, and guidance of
human behaviors.
3.2. Energy security concerns and the role of alternative fuels
Energy security is another important connection between an
energy system and an economy. In general, energy security is equal
to oil security for China. Concerns of oil security and China’s initial
strategic efforts, such as the ‘go out’ strategy4 and expedient
alternative fuel5, such as CTL and 1st generation bio-fuel, can be
explained as follows [71]:
 China is suspicious of the international energy market and
believes that the energy market is manipulated by the inter-
national oil companies, western developed countries (IEA), and
the oil-export countries (OPEC) that are unstable and difficult
to trust.
 The oil market is dominated by the US, and the US can firmly
grasp the weakness of the Chinese energy system. The US navy
controls the key marine energy transport channels, and the US
has tremendous power within the global oil industry and
organizations and can exert strong influence on the world oil
price and trade flow economically.
 In the world oil market, China plays a newcomer’s role, and
China has to catch up and surpass some powerful developed
countries.
3
The definition of energy service is given in section 4.4.
4
‘go out’ strategy: to support the state-owned enterprises to enter international
markets and grow into international companies.
5
The definition and category of alternative fuel is explained in section 4.3.
1147
Actually, energy security involves much more than the initia-
tives strategic efforts of China mentioned above. Based on a review
of energy security theories, a framework of national energy security
was suggested by the authors [4], as illustrated in Fig. 4. In the near-
term, the main measures to secure oil supply are still to further
exploit conventional and unconventional oil reserves, to participate
and stabilize the international market, to diversify supply channels,
to build up the strategic petroleum reserve (SPR), and to improve
energy efficiency. The ‘go out’ strategy and expedient alternative
fuel are only a part of the whole and may not be functional for
short-term oil supply disruption and oil price fluctuations. Also, the
scale of expedient alternative fuel development and usage should
be decided through careful cost benefit analysis.
Fig. 5 illustrates the philosophy to decide the optimum scale of
expedient alternative fuel. Taking CTL as an example, the benefit
includes the avoided GDP loss of buying oil or having oil supply
disruption and the money saved by reducing the necessary scale of
the SPR. The cost includes the capital and operation cost of the CTL
plant, and the extra coal consumption and CO2 emissions from it.
The optimum scale should be decided by balancing well the benefits
and costs. For other expedient alternative fuels, the philosophy
should be the same, but the benefit and cost maybe different. For
example, 1st generation bio-fuel and compressed natural gas (CNG)
may help to reduce the conventional and CO2 emissions from the
transportation sector. However, for long-term considerations, the
relative scarcity of oil resources compared to other energy resources
make it necessary to continuously develop desirable alternative fuel
as a ready substitute before the ‘oil peak’. However, as there are so
many choices of desired alternative fuel5 and now few if any are as
Fig. 3. A conceptual relationship between energy consumption and energy service
level [70].
1148 L. Ma et al. / Energy 36 (2011) 1143e1154

Fig. 4. An illustration of national energy security framework [4].

advanced as oil in all aspects, there is still a long way to go before
making the final choice among various technologies.
3.3. Coal utilization and related emission
Coal utilization and related emissions is the main relationship
between energy and the environment in China. Coal utilization is
the main source of air pollutants, such as SO2, NOx and dust, as well
as energy-related CO2 emissions in China. Coal accounted for 69.5%
of TPEC in 2007, and 56% of coal is consumed for power generation
and concentrated heat supply. About 25% of the coal is used for final
consumption, which is mainly the direct burning of coal in
distributed industrial and domestic boilers. The remaining coal use
is mainly for coking with only a little used for coal gasification.
Some is also lost in coal washing, as illustrated in Fig. 6 [72]. In the
future, coal is expected to mainly serve power generation and, to
a certain point, use in the coal chemical industry, especially coal
liquefaction and coal gasification. Coal use for coking is expected to
be stabilized or even decrease after the rapid industrialization
process, and direct coal burning will be gradually substituted by
other, cleaner energy, such as electricity, renewables and natural
gas. So, the main strategic focus of emission control should be coal
power generation and the coal chemical industry.
With efforts for environmental protection, the SO2 and dust
emission of coal power in China have already decreased since 2006.
Though NOx emission is still increasing, it is believed more rigid
emission standards will be put forward to effectively control
emissions in the near future [55]. Other pollutants, such as fine
particles and trace elements, could also be controlled by similar
efforts. Thus, the main issue is CO2 emission.
To demonstrate the relationship between coal utilization and
CO2 emission in the power sector, a scenario analysis was carried
out for 2030, as shown in Fig. 7 and Table 3 [73]. In 2030, if all
electricity is generated by coal power at the current energy effi-
ciency rate, the CO2 emissions will be 5.87e7.93 Gt with total
electricity generated varying from 7500 Terrawatt hours (TWh) to
9900 TWh. The improvement of coal power efficiency will cut
a fraction of the total emissions, and the development of other
clean power generation will dramatically reduce the CO2 emissions
down to 2.89e5.22 Gt. It seems energy efficiency and non-fossil
fuel usage is still the key to reduce CO2 emissions. If all these
solutions are taken and the total CO2 emissions are still too high,
then CCS must be adopted. For CCS, Integrated Gasification
Combine Cycle (IGCC) and polygeneration systems based on coal
gasification will be important for reducing the cost and energy
penalty of CCS on coal power generation [74].
For the coal chemical industry, the CO2 emissions are largely due
to the shift of CO in the syngas into CO2 to adjust the CO/H2 ratio.
CO2 is then separated into the flue exhaust as an emission. Large
quantities of CTL will generate roughly two to four tonnes CO2 or

Fig. 5. The rough idea of how to decide the optimal scale of CTL with oil security concern.
 L. Ma et al. / Energy 36 (2011) 1143e1154 1149

Fig. 6. The coal consumption of China in 1985e2007.

more for every tonne of liquids produced. Because most of the CO2
emissions from the coal chemical industry are of high purity, the
CO2 capture cost is much lower than CO2 capture costs from the flue
gas of coal-fired steam power. From an economics standpoint, it is
better to first deploy CO2 capture in the coal chemical industry
rather than the coal power industry.
3.4. Energy supply for rural areas
Energy supply for rural areas is the main relationship between
energy and society. With increasing family income and concern for
environmental protection, the energy consumption of rural areas in
China is experiencing a transition from traditional biomass to

Fig. 7. The 2030 scenarios of CO2 emission of power sector in China.

1150 L. Ma et al. / Energy 36 (2011) 1143e1154

Table 3
Four scenarios of China’s power demand and supply in 2030.

Scenario Electricity generation Hydropower Nuclear power Wind power Natural gas power Biomass power Solar power
(TWh) (GW) (GW) (GW) (GW) (GW) (GW)
S1 9900 400 160 300 60 30 200
S2 9900 400 120 180 60 30 100
S3 7500 400 160 300 60 30 200
S4 7500 400 120 180 60 30 100
a
The high electricity demand in S1/S2 refers to international experiences that it is linear with GDP growth. The low demand in S3/S4 further considers the energy saving
policy.bThe capacity target of renewable power are referring to a recent research [73], and the capacity target of nuclear power and natural gas power are estimated by the
author.

commercial energy. Besides promoting electrification in rural areas,
a big problem for China is how to supply clean, cheap and conve-
nient energy to these areas for domestic use, such as cooking and
heating. Biomass pellets, biogas and solar thermal will all be
important solutions [46], and DME and synthetic natural gas (SNG)
derived from coal may also play an important role. However, huge
efforts will be required to develop the innovative energy systems
for rural areas in China facing the challenge of the traditional
economy.
4. A conceptual system model of an integrated energy
strategy
4.1. The framework of the conceptual model
Based on above understandings, a conceptual system model is
here architected for making the integrated energy strategy, as
illustrated in Fig. 8. The key points about the model are:
1) From the systems viewpoint [75], China’s energy is actually an
open system coupled by energy, economic, environmental and
societal systems. Regardless, it can be divided into a technical
energy system and an outside environment which includes the
energy management system of China and local/global patterns
of environment, economy, and society.
2) The function of the technical energy system is to convert
inputs, such as resources, capital, technology, information and
labor into energy services with energy services used to further
generate output such as non-energy products and services and
to improve people’s living standard. The technical energy
system is composed of two sections. The first is the energy
supply system converting resources into energy carriers. Next,
the energy end-use system converts energy carriers into
energy services. At the same time, the two sections will release
energy-related emissions into the environment.
3) The technical energy system also differs from traditional
energy engineering systems in other aspects. The input and
output is not only energy. For example, infrastructure is
included, which encompasses both the energy infrastructure
and non-energy infrastructure, because the latter is actually
embedded energy formed from energy-intensive construction.
If it is not fully utilized, the embedded energy will be wasted
and more energy will be consumed by extra infrastructure
construction. Infrastructure normally has the technology lock-
ing effect for the energy service level. Therefore, it is essential
to carefully design and use infrastructure in an efficient and
sustainable way.
4) There are three kinds of technical options to promote
sustainable development. The first is the improvement of
incumbent energy; the second is the development of alterna-
tive energy (i.e. ‘AE’ in Fig. 8); and, the third is energy saving,
which covers the remaining sectors of the technical energy
system, even the environment.
5) The inputs and outputs of the technical energy system have
complex feedback reactions with local and global patterns of
environment, economy and society, which are still uncertain
but could be partially understood following the system rela-
tionships discussed before.
6) To continuously secure the inputs and maximize the outputs of
the technical energy system, the improvement of China’s
energy management system is as important as energy tech-
nology innovation. The key is to strengthen strategic planning

Fig. 8. A conceptual system model of China’s integrated energy strategy for sustainable development.
 L. Ma et al. / Energy 36 (2011) 1143e1154
Table 4
List of the main incumbent energies and alternative energies for China.
Energy carrier Electricity
Incumbent energy Coal-fired power generation
Expedient alternative IGCC and polygeneration, coal power installed
energy with CCS, NGCC, nuclear fission power
Desirable alternative Hydropower, wind power, solar power and
energy other renewable power, nuclear fusion power
and regulation from the life cycle view of the whole system and
to apply aiding technology such as information technology.
4.2. The basic concept and strategic idea for incumbent energy
Energy supply is defined as the technology pathway from
primary energy to energy conversion and processing to energy
carrier. From the perspective of the national energy strategy, energy
supply can be categorized into two types: incumbent energy and
alternative energy [31]. Incumbent energy indicates the dominant
primary energy and related energy technologies currently used to
satisfy the demand of certain energy carrier. As listed in Table 4
under the classification of energy carriers, the main incumbent
energy for China is as follows:
1) Coal-fired power for electricity supply.
2) Petroleum refined oil products for transportation use.
3) Direct coal burning for end-use fuel and heat supply.
4) Petrochemicals for basic chemical materials.
It is comprehensible that incumbent energy will remain as the
majority of the energy supply for quite a long time even though it is
the main cause of energy and environment problems. Not only is
incumbent energy still the main choice to meet the energy demand
in near-term but, as the development of alternative energy is still far
behind, installed or newly constructed capacity for incumbent
energy will remain in service for decades. Therefore, the continuous
improvement of incumbent energy should be the emphasis of energy
supply development in the near-term and even in the long-term. The
main strategic focus in near-term could be summarized then as:
1) Cleaner coal production, such as improving the resource recovery
rate and rate of mechanized mining, promoting water protection
in mining, utilizing coal gangue, and reclaiming coal mines.
2) Cleaner coal utilization, such as promoting coal washing,
improving coal power efficiency and pollutant control.
3) Secured and cleaner oil supply, such as enhancing conventional
and unconventional petroleum exploitation, improving the
technology of refineries, and building the SPR.
4.3. The basic concept and strategic ideas of alternative energy
Alternative energy is the opposite of incumbent energy and is
defined as ‘energy supply that could complement the insufficient
supply capacity and improve the performance deficiencies of
incumbent energy as well as help to achieve a smooth transition to
future sustainable energy system. Alternative energy could be further
classified into two types at the national energy strategy level [31]:
 Expedient alternative energy: alternative energy that could
complement and improve energy supply in some level but also
bring obvious negative effects at the same time, development
of which is allowable to a certain extent in the near-term. For
1151
Industrial/domestic fuel and heat Transportation fuel Basic chemical material
Direct coal burning Petroleum refined gasoline Petrochemical
and diesel/gasoline
Natural gas directly burning, LPG, CNG, coal to liquids, Natural gas chemical,
coal-derived DME, SNG 1st generation of bio-fuel coal chemical
Biomass pellet, biogas, Electricity, 2nd generation Biomass chemical
solar thermal, geothermal of bio-fuel, H2
example, CTL could reduce the oil consumption but increase
CO2 emission and coal consumption.
 Desirable alternative energy: alternative energy that could be
used in long-term and has less negative effect to resources and
the environment. Desirable alternative energy should be
continuously researched and developed, but the contribution of
desirable alternative energy in total energy supply in near-term
will be quite limited. A good example is wind power which has
continuous resources and very low emissions during its life time.
The main alternative energies for China are listed in Table 4, and
the main strategic focus in the near-term could be summarized as
follows:
1) For electricity supply: exponentially develop nuclear fission
power to become an important source of electricity supply;
vigorously and continuously develop hydropower and wind
power, moderately develop biomass power generation; speed
up the commercialization of solar power; build at least one full
scale demonstration of CCS-installed coal power.
2) For transportation fuel: diversify oil supply through coal-
derived fuels and first generation bio-fuel; speed up the
commercialization of the second generation of bio-fuel, elec-
trical vehicles and hydrogen/fuel cell vehicles.
3) For industrial and domestic fuel and heat supply: accelerate the
development of natural gas; increase LPG supply together with
DME blending; vigorously develop solar thermal, geothermal,
biogas and bio-pellets.
4) For basic chemical materials: develop an appropriate amount
of coal chemicals and natural gas chemicals, and build
a demonstration of a biomass chemical plant.
4.4. The basic concept and strategic idea of energy saving
Energy saving, also called energy conservation, is defined as the
practice of reducing energy consumption, and it includes two
aspects from the position of energy services. One is efficient energy
use (a.k.a. energy efficiency) to reduce energy consumption while
achieving a similar outcome. The other is to reduce consumption of
energy services. Developed countries usually emphasize energy
efficiency more because the demand of energy services is relatively
stable. For China though, which is still experiencing dynamic
development with its energy services far from saturated, the
conservation of energy services is also important, even more
important than energy efficiency.
In general, energy service can be defined as the outcome of final
energy consumption, such as mobility, washing, heating, cooking,
cooling and lighting, which is the real demand of people other than
energy itself. Former research [76] had categorized energy service
into short-term service and long-term service, or direct energy
service and indirect energy services (also called embodied).
However, for China’s unique situation, from the view of energy
strategy, it should firstly be categorized as construction services
and operation services as follows:
1152 L. Ma et al. / Energy 36 (2011) 1143e1154
1) Operation services: the services required by a society to keep
the current living standard with existing infrastructure and
energy devices. The energy demand for operation services
could be effectively reduced by technology efficiency including
energy supply efficiency and end-use efficiency. Backward
technology efficiency will lead to the waste of extra energy.
2) Construction services: the services required to improve the
quality and quantity of energy services to meet people’s
expectation of higher living standards in the future. The energy
demand for construction services is more related to non-
technology aspects, such as strategic planning, regulation, and
education. Energy efficiency could only help to reduce the
energy consumption during construction. The initial design
and total capacity of things constructed will decide the future
demand of energy services in the long-term. Insufficient utili-
zation of the infrastructure and energy devices in existence and
constructed during dynamic development may cause tremen-
dous amounts of extra energy to be wasted, which could go
unnoticed during early development.
So, the energy saving target of China can be summarized as
‘reducing the accumulated energy consumption during dynamic
development by avoiding unnecessary energy wasting’. The stra-
tegic focus in the near-term could be summarized as follows.
1) Energy saving should be continuously prioritized as a basic
national policy, with special attention under the positioning
and guiding of policy on the future economic structure and
living standard, in order to form a globally competitive, low
carbon economy and moderate standard of living. Blindly
pursuing GDP growth and a luxurious living standard should be
prevented. Considering the vast population and limited
resources and environmental capacity of China, the stabilized
energy consumption per capita should be lower than the
current level of most developed countries.
2) Strictly inhibit the overcapacity of industry production and
infrastructure building through careful strategic planning and
control. Emphasize the energy saving initial design of both to
avoid a waste of energy by over-building, repeated building, or
restricting people’s initiatives towards energy saving.
3) Major energy use sectors, such as industry, construction,
transportation, and lighting, should widely and timely adopt
energy efficient advanced technology to substantially increase
end-use energy efficiency.
4) Build a sustainable energy supply system following the
philosophy of “Integration, Differentiation, Diversification and
Decentralization, plus Network” (IDDD þ N) [5] which is
broken down into:
a) Integration of the energy conversion system, such as poly-
generation system [77e79].
b) Differentiation of the demand and Diversification of the
supply.
c) Decentralization of the energy system, such as decentral-
ized cogeneration of heat and power system.
d) Network of the energy system by information technology,
such as smart power grid.
5) Build a culture and social institutions that are conducive to
energy saving in order to promote various stakeholders to
actively participate in energy saving.
5. Conclusions and suggestions
Facing great energy challenges and an energy dilemma, it is
essential for China to integrate its energy, economical, environ-
mental, and social systems to form an integrated energy strategy
for its sustainable development. To make the integrated strategy,
basic concepts should firstly be clarified using a systems approach
based on specific conditions of China. The policy implication of this
study is summarized as follows:
 China should insist on energy saving as a fundamental national
policy and carefully control its accumulated total energy
consumption during its dynamic development. The key issues
remain proper positioning and guidance of its economic
structure and energy service level, strict regulation of new
infrastructure building and industry projects, enhancement of
systems integration both in terms of technologies and
management, and continuous improvement of the energy
efficiency standard.
 Optimization of incumbent energy is still essential. The key
issues are cleaner coal production, cleaner coal utilization, and
a systematic energy security system at a national level.
 Encourage a certain amount of expedient alternative energy to
meet the urgent needs in the near-term future through careful
planning. The focus should be natural gas, nuclear fission
power, IGCC and polygeneration energy systems, CCS, and CTL.
 Continuously develop desirable alternative energy for the
future sustainable energy system. Besides concentrated supply,
such as hydropower, wind power, and electrical vehicles,
distributed energy production should also be emphasized, for
instance, solar thermal, geothermal, biogas, and bio-pellets.
Acknowledgements
This work was supported by the Special Fund of the National
Priority Basic Research Program (No. 2005CB221207). The authors
are grateful for the support from National Energy Administration of
China and Chinese Academy of Engineering, the helpful comments
and suggestions by Dr. Steve Wittrig and Dr. Christos Papadopoulos
from BP, and also the support by experts from Toyota and GM
during the research.
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