Report: Energy costs to hit $5.7 trillion
IEA expects heavy spending to make transportation sector more efficient
China could invest as much as $5.7 trillion by 2035 to find, produce and save energy, accounting for 15 percent of global spending in the sector, a report from the International Energy Agency said on Thursday.
Fatih Birol, chief economist of the Paris-based IEA, told a workshop on the report in Beijing that China has made “outstanding efforts” to increase energy efficiency and reduce coal use to meet global climate targets.
According to the report, China will invest $1.6 trillion in energy efficiency by 2035, accounting for about onefifth of the global total.
Birol said that transportation will be the largest target for China’s investment in energy efficiency, accounting for about 71 percent of the $1.6 trillion, followed by industry and the building sector.
“The Chinese government is working hard to reduce oil consumption in cars, which will lead to increasing investment in raising energy efficiency in transportation,” said Birol. “It is crucial for emission reduction.”
From 2011 to 2013, China avoided 900 million metric tons of carbon emissions by curbing coal demand, according to IEA data.
Birol called that a “big story”, since the amount saved was equal to about one year of global emissions.
“China’s reduction of coal use has a much greater impact on global markets than the United States’ shale gas revolution,” he said.
Zou Ji, deputy director-general of theNational Center for Climate Change Strategy and International Cooperation, said China has been developing high efficiency coal-fired power generation in recent years to cut emissions and protect the environment.
“The need for investment in low-carbon energy in the coming two decades is huge,” Zou said.
He added that the country should use investment as a tool to guide technological transformation and the capacity of energy supply.
“It can be an interesting point to consider about leading roles of developed countries in reforming the world energy investment system to create incentives and guidance,” he said.
According the IEA, capital costs to produce energy have doubled since 2000.
In 2013, the number soared to $1.6 trillion to provide consumers with energy globally. INVESTMENT IN ENERGY SUPPLY (2014-35)
37% INVESTMENT IN ENERGY EFFICIENCY (2014-35)
71% amount of carbon emissions reduced from2011 to 2013
“Today’s investments lock in patterns of consumption, fuel use and emissions for long into the future,” said the report.
The global investment needs in energy supply total $40 trillion by 2035, twothirds of which will be in emerging economies. The core investment area will shift from China to other countries in Asia, as well as Africa and Latin America.
Up to $23 trillion of the $40 trillion will go to fossil fuel exploration, transportation and refining while $10 trillion will go to power generation.
The remainder will be spent on power transmission and distribution.
Guo Haitao, a professor at the China University of Petroleum, said China should invest in clean coal, distributed natural gas power generation and electric vehicles for energy efficiency.
“Future investment in energy might turn out to be less than the IEA has forecast because of technological development.”