This data-file is our China Energy Model and CO2 Model, disaggregating China’s energy demand by industry, across coal, oil, gas, wind, solar, hydro and nuclear, across c200 lines, from 2000-2060, with 20-input variables that can be stress-tested.
In our base case scenario, total useful energy demand rises 1.5x by 2050, gas demand rises 3.5x to displace coal, wind and solar reach 50% of the final electricity grid, while gross CO2 emissions fall back from 10.5GTpa in 2022 to 8GTpa, and the remainder must be met by (a) waiting until 2060 (b) CCS and (c) CO2 removals.
The goal of our China energy model is to track China’s historical energy demand and CO2 emissions, and stress-test different scenarios for China’s future energy demand and CO2 emissions. How do the different variables need to look, for China’s future energy use and CO2 emissions to be consistent with our broader global energy models and global roadmap to net zero?
China matters as it contains 17.5% of the world’s people, consumes 20,000 TWH pa of useful energy (25% of the global total), 4GTpa of coal (50% of the global total) and emits 10.5 GTpa of CO2 (30% of global total energy-related CO2 emissions). There is no route to global decarbonization without China decarbonization. So what do we need to model?
Demographic changes. The latest forecasts from the World Bank are that after rising at a 20-year CAGR of 0.5% pa, China’s total population peaked in 2022 at 1.4bn people and will gently decline back to 1.2bn by 2050. GDP growth slows from 9% pa in the past 20-years to 4.5% pa through 2060. Our models increasingly suggest a sustained era of painful energy shortages yielding high energy prices. Hence useful non-industrial energy per capita is only able to rise by about 50% from 5MWH pp pa today to 8MWH pp pa by 2050, compared to around 20 MWH pp pa in the developed world today. And no rebound effects are included.
This sees China’s total energy demand levelling off at 30,000 TWH per year, 1.5x higher than today’s levels and the gross CO2 intensity of GDP sustaining its recent 5% pa decline.
Electrification, solar and wind would also need to step up enormously. Electricity is 45% of China’s useful energy today, which rises to 67% in our base case scenario, increasing China’s total grid by 2.5x from 2.7 TW today to 7 TW by 2060 (for comparison, the total US grid today is 1.3 TW, which rises 2.5x to 3TW in our US decarbonization model). These are astronomical numbers.
China’s solar generation and wind generation thus ramp up to provide 50% of all of China’s electricity and about 80% of the total grid capacity. This means 40% of the world’s entire wind and solar capacity additions through 2050 would need to occur within China. And this must all happen despite the inflationary impacts of China’s total grid utilization falling from 60% at peak in 2004 to 30% in the 2040s, in an economy where costs matter, as manufacturing is 30% of GDP and 65% of all energy use.
China’s coal consumption currently runs above 4GTpa, providing 60% of China’s useful energy, 15% of the world’s energy, and equivalent to 4 Saudi Arabia’s worth of oil. Coal is the highest carbon combustion fuel, 2x more CO2 intensive than natural gas. Hence decarbonization aspirations require coal to be phased out.
China’s gas demand must therefore rise by 3.5x, from 35bcfd in 2022 to 130bcfd by 2050, even despite the large renewables ramp. Per the second chart below, this requires a very large acceleration in gas and LNG imports in the 2030s.
China’s oil demand reaches a new peak above 16Mbpd in 2023, then continues rising to a plateau of 18Mbpd by 2040, in this model, which assumes that oil is phased out from industry, and ultimately over 80% of transportation miles becomes electrically powered, including effectively all urban vehicles, while transportation-related oil demand becomes dominated by jet fuel, long-distance trucks and shipping.
Overall, China’s gross CO2 emissions are seen falling back from 10.5GTpa in 2022 to 8GTpa in 2050, while full decarbonization will require a mixture of CCS, nature-based removals and waiting until 2060. The numbers can be very different with subtle changes of assumptions. Please download the data-file to flex different scenarios in the model.
