Carbon charges and natural gas use in China

Substitution of natural gas for coal in China's power sector could significantly reduce emissions of carbon dioxide, but gas-fired power is generally more costly than coal-fired power in China today. This paper explores how carbon charges and carbon sequestration technology might tip the balanc...

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Bibliographic Details
Published in:Energy policy 2006-10, Vol.34 (15), p.2251-2262
Main Authors: Skeer, Jeffrey, Wang, Yanjia
Format: Article
Language:English
Subjects:
Applied sciences
Atmospheric pollution
Carbon dioxide
Carbon sequestration
China
China (People's Republic)
Coal
Coal-fired power plants
Combustion and energy production
Cost analysis
Costs
Economic data
Electric energy
Emissions
Emissions trading
Energy
Energy economics
Energy policy
Energy sector
Environmental aspects
Exact sciences and technology
General, economic and professional studies
Natural gas
Pollution
Pollution control
Pollution sources. Measurement results
Power resources
Studies
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Description
Summary:Substitution of natural gas for coal in China's power sector could significantly reduce emissions of carbon dioxide, but gas-fired power is generally more costly than coal-fired power in China today. This paper explores how carbon charges and carbon sequestration technology might tip the balance in favour of gas. The costs of electricity from new coal-fired and gas-fired power plants in China are compared under various assumptions about fuel costs, exchange rates, carbon dioxide charges, and application of carbon sequestration technology. Under average cost conditions today, gas-fired power is roughly two-thirds more costly than coal-fired power. But with a charge of $20/tonne of carbon dioxide, the costs of gas- and coal-fired power would typically be about equal. Over the longer term, carbon sequestration technology could be economical with a carbon dioxide charge of $22/tonne or more under typical cost conditions, but gas with sequestration would not have a clear cost advantage over coal with sequestration unless the charge exceeded $35/tonne.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2005.03.020