Energy Development and Energy Mix Readjustment
Action Plan for Beijing Olympic Games 2008
Sub-plan on Energy
Development and Energy Mix Readjustment

This plan is formulated in accordance with tasks and targets set forth in the Action Plan for Beijing Olympic Games 2008, to honor the commitments to the energy and environmental protection made in the bidding report to the IOC.

1 Guidelines and primary objectives

Beijing, capital of P. R. China, is the political and cultural center of the nation. In order to improve the urban air quality, highlight the urban modern civilization, rebuild impressive images and boost the city's competitiveness and strength, the coal-dominated energy mix must be overhauled to establish a market-based quality energy supply system, so as to ensure the sustainable development of Beijing's social economy.

1.1 Guidelines

?¡èAdherence to the sustainable development strategies, with the central objectives of improving the urban air quality to meet the environmental requirements in the run-up to the Olympic Games.
?¡èDevelopment and deployment of clean energies in a more cost-effective manner to phase in the fuel switch from coal-dominance to more shares of clean energy types such as natural gas and electricity.
?¡èAcceleration of the industrial and product restructuring so as to mitigate the growth rate of energy consumption.
?¡èPromoting the application of new and high technologies for energy supply consumption, so as to increase the energy efficiency and help build Beijing into an energy-efficient, clean and beautiful international metropolis.

1.2 Primary Objectives

Air environmental Quality: In line with the environmental quality requirements established by the central authorities and municipal government, as well as the environmental commitments made in the bidding report for the Olympic Games 2008, the urban atmospheric quality should be improved to reach the national grade-2 standard in 2005 with ever declining pollutant discharges from now, and approaches the WHO-issued standard or the average level of big cities in developed countries by the year 2008.

Limited growth rate of final energy consumption and energy conservation: During 2001 and 2008, annual growth rate of the total final energy consumption will be limited under 1.4%, and the annual growth rate of industrial energy use will be kept within 1.0%. By the year 2008, the energy saving rate per unit GDP will reach 6% over, while the energy intensity per unit GDP and per capita will meet 0.865 tce per 104 Yuan and 3.318 tce per person, the advanced domestic levels over the same period.

Energy mix readjustment: The share of clean and efficient energy in the final energy consumption mix in 2008 will account for 80% over, while the share of coal and coke in the final energy consumption mix and fuel consumption mix would be kept below 20% and approximately within 48% respectively. The total amount of coal consumption should be controlled within 15 million tons in the whole Beijing and 8.5 million tons in the planned urban area by 2008, where coal will no longer be burnt as fuel in final use sectors. By the then, the clean and efficient energy types should play a prominent role in energy mix, to help achieve the goal of a world-level top urban air quality.

Energy supply security: By using all possible sources of clean energy supply through market mechanism, the diversification of energy supply will be promoted, and adequate and stable energy supply security system will be ensured.

2 Energy mix readjustment programme

In this plan, the base year is 2000 and the target planned period is 2001-2008.

2.1 Reducing coal use and switch to clean energy
In Beijing the coal consumption was 27.03 million tons in 2000, while the coal demand in 2008 is projected as 31.60 million tons under the business-as-usual(BAU) scenario. While under the coal reduction and switch programme, the coal consumption in 2008 will be reduced to 14.75 million tons, which can be broken down as follows.

?¡èCoal used for power generation

In 2000, 7.09 million tons of coal was consumed for power generation in Beijing, and additional 0.5 million tons of coal will be used in Gaobeidian Co-generation Plant and Beijing First Co-generation Plant after the technical renovation and expansion is completed. On the other hand, Gaojing Power Plant is planning to reduce 1.60 million tons of coal use by fuel switching. Thus the total coal use for power generation will be reduced to about 6.10 million tons in 2008.

?¡è Coal used for urban heating
In Beijing the coal used for urban heating was 1.71 million tons in 2000, which will turn out to be 2.40 million tons through 2008, considering that heating demand still have to be met by full scale operation of installed capacity of the urban coal-fired co-generation plants. So no cut is planned for this use.

?¡è Coal used for coking and gasification The amount of coal consumed for these purpose was 5.50 million tons in 2000 in Beijing, and will be reduced to 1.30 million ton in 2008, since the Beijing Coking and Chemistry Plant will stop coke production or shift to other of production before 2008, and No.2, No.4 and No.5 coke ovens in the Capital Steel Mill also will stop production. Therefore reduction of coal use will reach 4.2 million tons.

?¡è Coal used for final energy consumption The final coal consumption amounted at 12.78 million tons in 2000, and is predicted to come up to 15.15 million tons by 2008 on a business-as-usual (BAU) basis. The following measures are to be taken to cut the amount by 11.15 million tons, and only 4.00 million tons will be remained in the outer suburbs.
* Switch to natural gas: a sum of 6.10 million tons of coal will be substituted by natural gas, of which 0.50 million tons for cooking, the other 5.6 million tons for space heating and industrial use.
* Switch to electricity: electric space heating will be developed to 20 million square meters, including 12 million square meters of one-storey buildings in aged urban area, resulting in 1.32 million tons of coal switch to 4000 GWh of electricity.
* Switch to geothermal energy and water source heat pumps for space heating: an area of 10 million square meters will be heated in these ways reducing coal use by 0.34 million ton.
* Switch to heating power from urban heating network: the centralized heating supply will be expanded by 55 million square meters cutting coal use by 0.47 million tons.
* Switch to LPG and light diesel: 2.92 million tons of coal will be switch to 1.15 million tons of LPG and light diesel in final energy consumption

Coal consumption of 2008 in Beijing:BAU and coal substitution

2.2 Expected energy mix in 2008 in Beijing
By 2008, the share of clean and efficient energy in Beijing's energy mix will amount for 86% in the final energy consumption, as described in details as follows:
Natural gas supply will be 5 billion cubic meters, equivalent to 6.07 million tce, of which 3.8 billion cubic meters will be consumed in final sectors, equivalent to, 3.74 million tce, taking 7.7% in the final energy consumption;
Electricity consumption will be 62000 GWh, equivalent to 18.60 million tce, including 4000 GWh used for space heating, taking 44.8% of the final energy consumption;
Urban centralized space heating area will increase 55 million square meters, and total will reach 0.1 billion square meters;
energy supply for space heating is 2.70 million tce, taking 6.5% of the final energy consumption;
LPG and light diesel will be 1.15 million tons, equal to 1.64 million tce, taking 4.0% of the final energy consumption, and;
No coal as fuel directly for final energy consumption will exist in urban area, while it will be reduced by 1/3 in outer suburbs (4 million tons remained).

Mix of the final energy mix in 2008 in Beijing

Note ¡êo The total supply of natural gas is 5 billion cubic meters, excluding that delivered to Yanshan Petrochemistry Co. But final consumption of natural gas should reflect the substitution of heavy oil in end use by natural gas. Final consumption of natural gas (2.64 billion cubic meters about) excludes that consumed by power generators, heating supply, vehicles, etc. Natural gas used by vehicles is the replacement of oil, while the other use of natural gas is inputs in energy conversion.

3 Main clean energy projects

The main clean energy projects listed below are aimed to contribute to the Olympic Games, for which investment is required between 2002 and 2007.

3.1 Natural gas
By the energy-mix readjustment plan mentioned above, 5 billion cubic meters of natural gas will be demanded in 2008. The maximum annual transmission capacity of the first Shaanxi-Beijing long-distance pipeline is about 3.3 billion cubic meters, in which at most 2.4 billion cubic meters can serve for Beijing. Therefore, Beijing should initiate the construction of the second long-distance pipeline immediately.
* Gas source Besides the second long-distance pipeline, expansion of Dazhangtuo Underground Gas Storage Project and other new underground gas storage projects will be constructed as well.
* Urban distribution network Urban gas distribution networks, city gate stations, pressure regulator stations, ball-type gas holders and other facilities will be constructed, while existing distribution networks and pressure regulator stations for artificial coal gas will be reconstructed to distribute natural gas.
* Gas stations As committed in the bidding report to the IOC, 90% buses and all municipal vehicles (for environmental protection and postal service) will be powered by clean fuels in 2008. Accordingly, about 50 natural gas stations and 100 LPG stations need to be built. Vehicles using gas as fuel for public transport and municipal services will be purchased or retrofitted, taxis as well.
* Fuel-switch projects for boilers In urban area, 5000 coal-fired boilers will be retrofitted to use natural gas by 2005. The remaining 3000 coal-fired boilers in the suburbs will be retrofitted by 2007, while coal-fired facilities in counties and districts of outer suburbs will also be retrofitted if permitted by specific conditions. Gaojing Power Plant will switches to gas-fired.
* District gas-fired cogeneration projects Tsinghua Plant, Yizhuang Plant, Dianzicheng Plant and Shangdi Plant will be constructed.

3.2 Electricity
* Generation projects Caoqiao Gas-fired Cogeneration Plant, Taiyanggong Gas-fired Cogeneration Plant, and gas turbine units of the Third Cogeneration Plant (phase I and II) will be constructed. Outside Beijing, several power plants will be built such as Wangtan Power Plant (phase I), Zhenglangi Power Plant (phase I) and Daihai Power Plant (phase I) in Inner Mongolia, and Xiahuayuan Power Plant (phase VI).
* Transmission projects The transmission projects to be constructed consist of building or upgrading 500kV and urban 220kV power grids, replacing the overhead lines with underground cables along key urban streets and around Olympic Games fields, upgrading electric facilities in Olympic stadiums and relative areas, and upgrading electric distribution for reconstruction projects of dangerous and aged dwellings in downtown.
* Electric space heating projects in Old City Reserve Zone Necessary electric construction and renovation will be completed to guarantee the space heating for the one-storey buildings in the reserve zone within the Second Ring Road.

3.3 Heating power
Shuangyushu Heating Plant will be expanded and Caoqiao Gas-Fired Cogeneration Plant built. The accessory projects of outside heat supply network for Gaobeidian Cogeneration Plant and other heat-supply networks will be completed. The heat-supply system in Olympic Park and surrounding area will be constructed and renovated.

3.4 New energy and new technology for energy-use
* Space heating with geothermal energy and water source heat pumps There will be 160 geothermal wells completed in the city by 2008. The construction of geothermal heating project in Olympic Garden will be completed to serve 0.40 million square meters in the stadiums and gymnasiums for space heating.
* Solar energy To devote major efforts to promote energy solar utilization, 3MW solar cells will be constructed in Olympic Park as a demonstrating project, where 90% hot water produced by solar energy. Solar photo electricity application project and solar thermal utilization project in Olympic Park are constructed.
* Wind power The existing and planned wind power capacity is 50MW in the outer suburb areas of Beijing, which can supply mainly 20% of the electricity demand of Olympic Park as committed in the bidding report to the IOC. Efforts will be made to purchase wind power from the neighboring provinces during the Olympic Games. The feasibility of wind power development in Yanqing, north west of Beijing, is also under investigation.
* Biomass energy Quality of rural energy will improve, leading to improvement in rural energy use, air and water environment and comprehensive utilization of agricultural wastes. Main measures include biomass gasification projects for centralized biogas supply and large-scale biogas energy-environment projects
* Fuel cells and electric vehicles Efforts will be made in research and development of fuel-cell-driven and power-driven vehicles aiming to mitigate the pollution induced by transportation.

4 Projects for reducing coal as fuel and measures for rationed use of coal

In 2008, coal will not be used as fuel in the final energy consumption in planned urban area and reduced to a certain amount in outer suburbs.

4.1 Projects for reducing coal as fuel
* Gaojing Power Plant is switched to gas-fired generation, reducing 1.50 million tons of coal;
* Steel production at Capital Steel Mill will decrease to 6 million tons till 2005; and coke ovens No.2, No.4 and No.5 will be shut down through 2008, reducing coal by 1.20 million tons; and steel production will further decrease;
* The Beijing Coking and Chemistry Plant will stop production in 2005, reducing coal by 3 million tons; and
* Coal-fired boilers fully in urban and suburb areas and partly in the outer suburb areas will be retrofitted, reducing coal by 11.15 million tons.

4.2 Measures of rational use of coal
With the implementation of the energy mix readjustment plan in Beijing, the total coal consumption will be less than 15 million tons by 2008. According to the various uses and clean coal technologies and clean combustion technologies currently available, the following measures of efficient coal use are to be taken.
* High quality and low sulfur content coal, coal washing, and briquette Only washed coal or high quality and low sulfur content coal can be allowed to directly use by boilers for space heating and production. For power generation high quality coal has been used in the First Cogeneration Plant and Gaobeidian Cogeneration Plant; it is suggested for other power plants that high quality and low sulfur content coal will be substituted for current fuel coal. In outer suburbs and counties, briquettes will be used gradually.
* Clean combustion technologies These technologies are essentially applied in power plants such as CFB and IGCC. When conditions permitting, feasibility of construction of new power plants in counties and districts in the outer suburbs basing on these technologies will be studied .
* Control technologies for coal-firing induced pollution Mature technologies are applied to power plants including desulfurization, denitrification and low nitrogen combustion procedures. All currently operating coal-fired power plants in Beijing should be transformed, and adoption of desulfurization and denitrification procedures will be completed before 2005 so that the total emissions of SO2 and NOx will be declined.

5 Policy instruments

5.1 Preferential policies encouraging use of clean energy
* Reduction or exemption of gas pipeline investment fee for clean energy users;
* Adjustment of natural gas pricing system including seasonal price, and preferential prices for large users;
* Preferential policies to support duel switching from coal-fired boilers; and
* Establishment of reasonable time-of-use tariffs of electricity to promote energy-storage electric heaters working at late night.

5.2 Strict pollutants emission standards on boiler to limit the use of non-clean energy
* Establishment and enforcement of local emission standards of Beijing on boiler-induced pollutants, stricter than the national standards;
* Raising the level of pollution fees on SO2 and flue dust emission; and
* Implementation of charge rate on NOx emissions.

5.3 Dissemination and application of hi-tech in energy supply and energy consumption
* Research and spread of clean combustion, clean coal and heat pump technologies with efforts;
* Consolidation of scientific research and introduction of new technologies in energy sector;
* Increase in technology content in energy development, supply and consumption;
* Overall increase of comprehensive utilization efficiency of energy; and
* Enhancement of energy saving management, establishment of preferential policies to promote upgrading existing energy-intensive equipment and procedures with new technologies to decrease energy intensity of products.

5.4 Dissemination and application of renewable energy such as solar, geothermal and biomass energy
* Enhancement of the development and application of new energy and renewable energy increasing their share in energy mix;
* Preferential policies with investment subsidies to promote the development of new energy and renewable energy;
* Promotion and spread advanced new energy and renewable energy technologies based on real circumstances in Beijing through scientific and technical development and pilot projects; and
* Formulation of appropriate regulations on system reforms; through preferential low interest rate, venture investment or tax reduction and exemption, price subsidy and award, and other measures to support and facilitate the development of new energy and renewable energy.