Development Trends and Strategic Countermeasures of China’s Emerging Energy Technology Industry Toward 2035

Bo Zhang , Xudong Sun , Ying Liu , Suping Peng

Strategic Study of CAE ›› 2020, Vol. 22 ›› Issue (2) : 38 -46.

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Strategic Study of CAE ›› 2020, Vol. 22 ›› Issue (2) :38 -46. DOI: 10.15302/J-SSCAE-2020.02.006
Development Strategy of Emerging Industries (2035)
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Development Trends and Strategic Countermeasures of China’s Emerging Energy Technology Industry Toward 2035
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Abstract

Technology innovation is becoming a source of power to lead the transition and development of global energy industry. The development of emerging industries in the energy field is rooted in the reality of China’s energy conditions, the major strategic needs of the country, and the demands for innovation-driven energy development. “Emerging energy technologies” herein refer to not only the renewable energy and nuclear energy technologies, but also the ground-breaking or disruptive energy development and utilization technologies, in the areas such as the exploitation of unconventional oil and gas resources, the clean and efficient conversion and utilization of fossil fuels, the energy transmission, and the end use of energies. After defining the scope and orientation of the emerging energy technology industry, this paper analyzes the current status and development trends of the emerging energy technology industry in China and abroad. Key areas and technology direction of the emerging energy technology industry toward 2035 are proposed. The guideline, objectives, and key tasks for developing China’s emerging energy technology industry during the 14th Five-Year Plan period are explored in detail. The study proposes to focus on the development of 41 new energy technologies in ten areas, covering advanced coal-fired power generation, unconventional natural gas development, energy Internet and integrated energy services, nuclear energy, wind power, solar photovoltaic power generation, solar thermal power generation, biomass energy, geothermal energy, and hydrogen energy and fuel cells. Meanwhile, nine key scientific and technological projects, one major engineering project of multienergy complementary distributed energy system, and two demonstration zones for emerging energy technology integration and innovation, distributed in Hebei Xiong’an New Area and South China coastal areas, are suggested to be established. Corresponding policy implications are addressed, such as strengthening the top-level design for the development of emerging energy technologies and emerging energy industries, integrating the energy-saving industry into the emerging energy technology industry, and adjusting the “new energy industry” to “emerging energy technology industry” in the national plan of emerging industries.

Keywords

能源工业 / 能源新技术 / 新兴产业 / 2035 / energy industry / emerging energy technology / emerging industry / 2035

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Bo Zhang, Xudong Sun, Ying Liu, Suping Peng. Development Trends and Strategic Countermeasures of China’s Emerging Energy Technology Industry Toward 2035. Strategic Study of CAE, 2020, 22(2): 38-46 DOI:10.15302/J-SSCAE-2020.02.006

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1 Introduction

Iterative innovation of energy technology has made a significant contribution in promoting the transition and development of global energy industries. As the largest developing country in the world and the country with the largest population and second-largest economy, China is also the largest energy-producing and -consuming country. The sound development of the energy sector is inextricably related to the sustainable development of resources, the environment, and the social economy. To date, the Chinese energy industry has made substantial achievements but has also encountered considerable problems, one of the most prominent of which is the huge scale of energy consumption and the critical position of fossil energy reserves with respect to the energy production and consumption structure. In 2018, the total consumption of coal in China was 2.74 ×109 tce, with a year-on-year growth of 1.0%, accounting for 59.0% of the total energy consumed [1]. However, in recent times, we have witnessed a continual decline in the proportion of energy generated from fossil fuels. At the same time, the generating capacities of renewable and nuclear energy have risen, although the scale of production is still nowhere near sufficient. A second major problem faced by the Chinese energy sector is related to the potential risk associated with the security of oil gas supplies. In 2017, China surpassed America to become the largest crude oil importer for the first time, and in 2018, China’s proportional dependence on foreign sources of oil and natural gas was 72% and 43%, respectively [2]. Furthermore, the high-quality utilization of fossil fuel-derived energy has yet to realize and the clean and efficient utilization of coal is in need of improvement. Compared with other developed countries, the proportion of power generated from coal in China is considerable lower, although large-scale coal development and utilization have brought about serious eco-environment problems [3] General energy system efficiency in China is also conspicuously low. The energy consumption per unit GDP in China is some 1.4 times as much as that of the world average. In 2018, the average value of thermal power utilization hours was 4361 h and the generating capacity of “three curtailments” (curtailment of hydro, wind and solar power) was 1.023 ×1011 kW·h. Finally, reduction in greenhouse gas emissions and coping with the repercussions of ongoing changes in global climate are presenting considerable challenges. Currently, China’s emissions of carbon dioxide account for 30% of those the entire world and the country is ranked first with respect to the emission of methane rank.

In addition to guaranteeing the security of the national energy supply, adopting measures to preserve the ecoenvironment and addressing the challenges posed by climate change will be critical long-term issues for the future development of the energy sector in China. Along with the increasing growth and future development of the economy and society, there will be increasing demands for energy resources for upgrading traditional industries and sustaining infrastructure construction, and thus the total energy consumed in China is also set to rise. It is anticipated that these demands will be met by an expansion in the renewable energy, natural gas, and nuclear power industries, along with further development of the relevant emerging industries. Indeed, the development of emerging industries in the energy field is closely related to national strategic needs. It will accelerate the energy production and consumption revolution, optimize the energy structure, contribute to ensuring energy safety, and facilitate greenhouse gas reductions and eco-environment preservation. Moreover, it will lead to improvements in the level of national industrial equipment manufacturing technology, foster a new economic growth drive, and promote the sustainable development of economic society [4].

In the next 10 to 15 years, and indeed the longer term, China will enter a crucial period characterized by an acceleration of the cultivation and development of strategic emerging industries, which will also be a significant period of opportunity for developing green and low-carbon industries. The inevitable way forward will be to promote development of the emerging energy technology industries that is commensurate with the development demands and resource features in China. Previous studies [5,6] have discussed the general framework of development for strategic emerging industries, development trends, and path choices for the new energy industries or particular energy sectors, and the policies and regulations of strategic emerging industries, and have comprehensively analyzed regional industrial clusters, strategic layout, innovative features, and development modes. However, research that focuses on the future development of emerging energy industries has yet to emerge, notably with respect to a systematic assessment of industrial positioning, developmental paths, and detailed measures from the strategic perspective.

In this paper, we define the salient features of emerging energy technologies and the industrial connotations, clarify the variation tendencies of the competitive landscape for the global emerging energy technology industries, as well as international and domestic development trends, and examine the development direction of emerging energy technology industries toward 2035, particularly with respect to the developmental goals and key tasks enshrined in the 14th Five-Year Plan. We also present details of future trends in technological innovation development and propose key scientific and technological projects, significant projects, and demonstration area construction requiring advanced layout, as well as relevant policies and suggestions.

2 Features of emerging energy technologies and the industrial connotations

2.1 Features of emerging energy technologies

Emerging energy technologies are generally characterized by certain common features [4]. First, these technologies are based upon the assumption that innovation in technological principles can solve all the restrictive development problems in technological fields. Second, emerging energy technologies have good technical competitiveness or advantages. Third, the relevant mature technologies are regarded as the basis for development, providing sound technical feasibility. Finally, the combination of large cost reduction potential and a higher rate of technical learning will contribute to promoting a rapid expansion in the scale of technical development, thereby building the capacity to compete with the traditional technologies and garner a large fraction of the market share. On the basis of definitions proposed in relevant research [7], we further define the emerging energy technologies as “not only the renewable and nuclear energy technologies but also the ground-breaking or disruptive energy development and utilization technologies, in areas such as the exploitation of unconventional oil and gas resources, the clean and efficient conversion and utilization of fossil fuels, energy transmission, and the end-use to which energy is put.”

2.2 Scope and orientation of an emerging energy technology industry

The orientation of emerging energy industries reflects the objective laws of energy development, conforming to the significant national demand of “promoting the energy production and consumption revolution and constructing clean, low-carbon, safe, and efficient energy systems.” It also fully presents the new trend, vigor, and business form of energy industries, and effectively promotes low-carbon green energy generation as a new driver of economic growth. The Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries (GF [2010] No. 32) divided strategic emerging industries into seven classes, including “new energy industries” and “energy conservation and environmental protection industries”, the latter of which only refers to high efficiency and energy conservation in the process of traditional industrial utilization in the energy field. The 13th Five-Year Plan for the Development of Strategic Emerging Industries included new energy industries, energy conservation, environmental protection industries, and new energy automobile industries among the “green and low-carbon industries.” Thereafter, the emerging industries in the energy field mainly used to be represented by “new energy industries.”

Although the energy generated from new energy industries or traditional energy industries are not different, the associated energy technologies are distinct owing to the advanced level [7–9]. “New energy industries” cannot directly reflect the smart grids, energy storage, distributed energy resource, micro-grid, and other industries. Furthermore, the development of renewable energy industries also needs to take into consideration the advancement of technologies. Given that the orientation of “new energy industries” over-emphasizes the importance of energy generated from nuclear, solar, wind, and biomass sources, the revolutionary function of new technologies for generating energy from fossil fuels (e.g., large-scale development technology of shale oil and gas and advanced clean coal technology) can easily be neglected, and thus the cooperative and coordinated development of new technological systems for energy generated from fossil fuels and non-fossil fuel sources is excluded. Although The National Energy Administration and other government departments have included shale oil development and smart grids among the strategic emerging industries, the detailed scope of emerging industries in the energy field is poorly defined. The orientation of “new energy industries” is currently too narrow to fully represent the energy transformation and industrial revolution brought about by emerging energy technologies. To a certain extent, the restriction of current industrial division and orientation hinders promotion of the integrated innovation of emerging energy technologies and the coordinated development of energy industries, which restricts progress in a comprehensive promotion of the energy production and consumption revolution.

Under such circumstances, we propose an expansion in the scope and connotations of the previously defined “new energy industry” [7] to “emerging energy technology industry”, and advocate paying equal attention to the clean and efficient utilization of fossil fuel-derived energy and the large-scale development of nuclear and renewable energy. The emerging energy technologies related to the development of emerging industries cover the areas of energy conservation and energy efficiency improvement technology, new technologies for clean and efficient development and utilization of fossil fuel-generated energy, smart grids, energy storage technology, large-scale development, technologies associated with the utilization of unconventional oil and gas resources and renewable energy, selfinnovative nuclear power technology and nuclear waste treatment technology, hydrogen energy, fuel cells, nuclear fusion energy, hot dry rock, natural gas hydrate, and other relevant advanced technologies.

Consequently, the emerging energy technology industries will mainly encompass the clean and efficient transformation and utilization of coal (with a particular focus on advanced coal-fired power generation), unconventional development and utilization of oil and gas (with a focus on unconventional natural gas sources, i.e., shale gas, coal bed gas, and natural gas hydrate), the energy internet and comprehensive energy services (with a focus on the energy internet, advanced power transmission, energy storage, and comprehensive energy services), nuclear and renewable energy generation (with a focus on wind power generation, solar photovoltaic and thermal power generation, biomass energy, geothermal energy, hydrogen energy, and fuel cell development).

3 Trends in the development of international and domestic emerging energy technology industries

3.1 The current situation

3.1.1 Global emerging energy technology industries

Over recent years the global energy scene has undergone considerable changes. The “energy independence” achieved by US has been dependent on the large-scale development of unconventional oil and gas resources, whereas the nuclear power supply capacity of some developed countries has continued to decline. The rapid development of renewable energy industries represented by wind and solar energy power generation and the globalization trend in the conversion to unconventional oil and gas resource production have radically altered the global pattern of energy supply and demand [2], with an enhanced substitute effect. With respect to wind power generation (accounting for 5.2%) and solar photovoltaic power generation (accounting for 2.5%), China ranked first in the world in terms of scale. Wind curtailment and power shortage issues have been significantly improved and the solar power curtailment capacity and ratio have decreased in China. The scale of nuclear power generation (accounting for 4.1%) has shown a steady rise and the multi-purpose utilization of nuclear power offers considerable potential. Moreover, there have been vigorous developments in the energy internet and comprehensive energy service industries and construction of the energy infrastructure has accelerated, promoting the implementation of the Belt and Road initiative and regional integrated development.

From the perspective of technologies, the energy technology and innovation capacity of China are continuously developing, and have gone some way in achieving an international advanced level [7].

(3) Attention should also focus on highlighting the key scientific and technological projects in the energy field and promoting the “implementation plans” of significant projects, in addition to guaranteeing the feasibility and operability of these projects. Furthermore, there should be an enhancement of the dominant role played by enterprises in innovation decision-making, research, and development investment, as well as the organization of scientific research and application of the advances made in energy technologies. Substantial increases in investment are necessary for research and development in the field of emerging energy technologies, along with an enhancement of the key and core technological breakthroughs and project initiation and approval. Finally, it will be necessary to establish the precise structural organization relating to the construction of significant projects and demonstration areas.

Acknowledgments

The support and help from the following project team members were invaluable in the preparation of this paper: Xu Shisen, Zhao Peirong, Su Gang, Zhou Jie, Wang Wen, Feng Yu, Kong Fantai, Zhang Jianhan, He Yujiang, and Zhai Junxiang.

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Funding

CAE Advisory Project “Strategic Research on Emerging Industry Development (2035)” (2018-ZD-12); National Key Research and Development Project “Coal Gasification Power Generating Technology of near Zero Emission of CO2” (2017YFB0601900)()

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