Under the big goal of carbon neutrality, why does our country still develop natural gas?

I. Introduction

Carbon peaking and carbon neutrality is a major national strategy, aiming to promote high-quality economic and social development through the transformation of the energy system, and promote the transformation and development of the energy system from fossil energy to renewable energy. At present, China's energy structure has the characteristics of coal-based, large-scale energy system, short transition time and high transition cost; At the same time, in order to solve the problem of energy security and stable supply caused by multi-scale, volatility and uncertainty of renewable energy, it is urgent to explore the feasible path of energy transformation and development.

As a low-carbon fossil energy, natural gas has a solid development foundation and huge development potential, and has unique comparative advantages in various fields of supply and consumption. It can not only play an important role in calming the power grid peak adjustment, low-carbon development in the transportation field, industrial emission reduction, urban environmental pollution control, etc., but also win time for disruptive technological breakthroughs such as energy storage, high-permeability green hydrogen, carbon capture, utilization and storage, and smooth transformation of the energy system.

Therefore, it is of great significance for the high-quality development of China's natural gas industry and the smooth realization of carbon peaking and carbon neutrality goals to clarify the role positioning of natural gas in different stages of achieving carbon peaking and carbon neutrality goals, and to appropriately play the unique advantages of natural gas in a clean, low-carbon, efficient and stable manner.

Domestic and foreign institutions have carried out research on China's carbon neutral roadmap, analyzed China's carbon neutral development path and predicted energy demand. According to the forecast results of these institutions, by 2060, the proportion of fossil energy consumption in primary energy consumption in China will be 7% to 30%; Natural gas consumption is 1.0×1011~4.9×1011 m3, accounting for about 3%~16% of the total primary energy consumption. There are significant differences in the research conclusions of different institutions on the future development of fossil energy, especially natural gas, reflecting the obvious differences in the understanding of carbon peaking, carbon neutral transition path and the role of natural gas in the transition path.

In view of this, on the basis of scientific understanding of the development stage of carbon peaking and carbon neutrality, development challenges, and development principles, this paper systematically studies the development basis of natural gas and opportunities and advantages of both supply and demand, analyzes the development constraints, and puts forward goals and suggestions for natural gas development, with a view to further building consensus and clarifying the development status of natural gas. It provides a basic reference for the country to formulate a carbon peak and carbon neutral development path.

2. Scientific understanding of the goal of carbon peak and carbon neutrality

(a) Carbon peak, carbon neutrality is an organic whole composed of two stages

The overall development direction of the two stages of carbon peaking and carbon neutrality is the same, but there are some differences.

① Different stages of development. Carbon peaking is the necessary stage and prerequisite basis of carbon neutrality, and carbon neutrality is the ultimate goal and reverse constraint of carbon peaking.

② Different development bases. Carbon peaking is the gradual peaking and carbon control process of high-carbon fossil energy under the background of increasing energy consumption and large-scale introduction of non-water renewable energy. Carbon neutrality is the accelerated growth process of non-fossil energy in the context of peak energy consumption and gradual decommissioning of fossil energy facilities.

(3) Different development priorities. By 2030, focus on carbon control to buy time for the mature development of renewable energy; After 2030, we will focus on building a renewable energy system and promote a revolutionary transformation of the energy structure. On the whole, neither can we separate the two stages to formulate the energy transformation path, nor can we combine the two stages into one stage; To achieve the goal of carbon peak before 2030 is the focus of China's recent energy transformation development.

(2) Challenges facing energy transition development under the goal of carbon peak and carbon neutrality

The essence of energy transformation is the upgrading and optimization of energy use structure in various fields, the upgrading and transformation of energy supply and demand system and massive infrastructure. At present, China is the world's largest energy consumer, energy consumption will continue to grow, the proportion of fossil energy is high, the fossil energy infrastructure stock is large, high degree of novelty, energy transformation and development is faced with heavy tasks, short time, high cost multiple challenges.

1. Large scale of energy system and heavy task of emission reduction

China has the world's largest energy production, transformation, transmission and distribution system, the total energy production in 2020 will be 4.08×109 tce, the total energy consumption will be 4.98×109 tce, accounting for about 25% of the global total energy consumption; The installed capacity of thermal power, hydropower, wind power and photovoltaic ranks first in the world. China is still in the late stage of industrialization, and the demand for energy use will continue to grow in the short term. The forecast results of many institutions at home and abroad show that China's total energy consumption will peak around 2035 (about 5.7×109 tce).

In terms of carbon emissions, the historical peak of the United States is 5.7×109 t, the historical peak of the European Union is 4.4×109 t, and the peak of China's carbon emissions may exceed 1.04×1010 t before 2030. It can be seen that the task of optimizing and adjusting China's energy structure and carbon emission reduction is arduous and onerous.

2. Short energy transition time

The EU countries have reached the carbon peak in the 1990s, and the United States, Japan, South Korea and other countries have also reached the carbon peak around 2010. According to the global net zero emissions target of 2050, the time interval between carbon peak and carbon neutrality is mostly 40 to 70 years, with an average cycle of about 50 years. China's carbon peak, carbon neutral interval is only 30 years, in the case of sustainable economic development, sustainable growth of energy to promote the realization of carbon peak, carbon neutral goals will face the double pressure of development and emission reduction.

Therefore, in the case of less than 10 years from the realization of the carbon peak goal, it is urgent to coordinate short - and medium-term development, grasp the window period and critical period of the "14th Five-Year Plan", and build a solid foundation for the realization of short-term peak and medium - and long-term neutral goals.

3. High cost of energy transition

According to estimates, the total investment to achieve the goal of carbon peak and carbon neutrality in China is about 136 to 300 trillion yuan, accounting for 1/3 of the total investment cost to achieve net zero emissions in the world before 2030. The cost of energy transition is high, and while fully introducing social capital and maximizing market regulation mechanisms to promote the development of renewable energy, it is also necessary to properly solve the cost waste problem caused by the grounding of fossil energy infrastructure.

For example, the average service life of coal power units in Europe, the United States, Japan and other countries and regions is about 40 years, and they are currently in a period of large-scale retirement, and the coal development cycle is consistent with the trend of low-carbon transition. Due to the late start of China's industrial development, the average operation life of coal power units is only 12 years, and the "one-size-fits-all" coal power unit withdrawal mechanism will bring great asset stranded cost.

Therefore, in the process of achieving the goal of carbon peaking and carbon neutrality, we should not only prevent the transition lag under the pretext of practical problems, but also prevent the transition without considering the reality. We should promote carbon peaking and carbon neutrality in an orderly manner at our own pace, properly handle the relationship between development and emission reduction, short and medium term, and take into account the development needs of different energy varieties at different stages, in different fields and in different regions, adapt to local conditions, and explore the optimal plan for the energy transition path in the context of the overall transition.

(3) The principle of energy transition development under the goal of carbon peak and carbon neutrality

1. Not at the expense of energy security

Fossil energy will remain the main body of China's energy supply for a long period of time in the future, in view of China's current energy consumption continues to grow, oil and gas dependence on foreign countries, renewable energy early insufficient power and other practical problems, energy security risks in the process of energy transformation gradually appear. In terms of coal, due to the global policy and investment restrictions, the sharp compression of production capacity and the rapid rise in prices have directly led to the "power cut" crisis in many places in China.

In terms of oil and natural gas, China's dependence on foreign countries is as high as 70% and 40%, respectively, under the background of carbon peak and carbon neutrality, China's oil import quota is constantly tightened, superimposed on international oil and gas price fluctuations and other factors, domestic oil and gas supply is facing severe challenges. In terms of renewable energy, global extreme climate events occur frequently, and the instability defects of wind and light energy supply gradually appear. Therefore, China's energy transformation in the short-term domestic demand to adhere to the "first to break" principle, priority to stabilize the supply of fossil energy; In the medium and long term, we will vigorously develop renewable energy, gradually get rid of the excessive dependence on imported energy, and support China's economic and social development with cleaner, low-carbon, safe and independent energy.

2. Not at the cost of significantly increasing the cost of energy use

In the process of energy transformation, cost reduction should be taken as the internal drive to promote non-fossil energy to replace fossil energy. From the perspective of the full cost of energy supply, the development scale and rhythm of renewable energy should be considered, and the cost advantages of renewable energy and fossil energy should be integrated. The simulation results show that the absorption cost of renewable energy will increase with the increase of penetration ratio. When the penetration ratio is 30%, the absorption cost accounts for about 17% of the average electricity sale price in China, and the absorption cost ratio will be as high as 30% under the higher percentage penetration scenario. Therefore, the development of renewable energy in China should also fully consider the maturity and development scale of energy storage peaking technology to avoid a sharp rise in power absorption costs and terminal costs.

3. Not at the expense of energy efficiency

A study by the International Energy Agency (IEA) found that the cumulative carbon reduction contribution from energy efficiency improvements between 2020 and 2070 will be about 40%. China's energy consumption per unit of GDP in 2020 will be about 0.49 tce/ 10,000 yuan, 1.4 times the world average and 2.1 times that of developed countries. Improving energy efficiency is an important support and leading direction for China to achieve the goal of carbon peak and carbon neutrality.

Third, China's natural gas development opportunities and advantages

(1) Having the resources and infrastructure for leapfrog development

1. World gas supply is abundant

The world's natural gas reserves are extremely rich, especially with the advent of the shale gas revolution, which has greatly improved the exploitation level of natural gas resources. The world natural gas resources, storage production and reserve-production ratio are shown in Table 1. The total remaining recoverable resources of conventional and unconventional natural gas in 2019 are 8.03×1014 m3, and the remaining proved recoverable reserves in 2020 are 1.881×1014 m3. Based on 2020 production (3.85×1011 m3), the global gas storage and production ratio is estimated to be 48.8, which remains at a high level and has a sustainable resource and reserve base.

In recent years, with the continuous development of liquefied natural gas (LNG) infrastructure, the number of LNG exporting countries in the world has exceeded 50, and the volume of LNG trade has continued to grow rapidly. The average annual growth rate in the past ten years is 6.8%, much higher than the 1.8% growth rate of pipeline gas. In 2020, LNG trade volume will reach 4.879×1011 m3, accounting for 51.9% of the world's total natural gas trade, surpassing pipeline gas for the first time. In the future, global gas production will grow at an average annual rate of 1.4%, and production is expected to reach 5.4×1012 m3 in 2040. The abundant reserves of global natural gas resources, the continuous growth of production and the continuous improvement of natural gas infrastructure have laid a good foundation for China to utilize overseas natural gas resources.

2. China's natural gas exploration and development is booming

China is rich in natural gas resources, low in exploration and development, and has great potential for development. According to relevant estimates, the technical recoverable resources of conventional gas, shale gas and coal-bed gas in China are 3.33×1013 m3, 1.285×1013 m3 and 1.25×1013 m3 respectively, with a total of 5.865×1013 m3. By the end of 2019, the cumulative proved technically recoverable reserves of conventional gas, shale gas and coal-bed gas in China were 7.69×1012 m3, 4.334×1011 m3 and 3.285×1011 m3, respectively, with proven rates of 23%, 3.4% and 2.6%, respectively, and they were in the early stage of exploration.

Since 2000, China's natural gas industry has ushered in great development, and conventional gas and unconventional gas have been simultaneously developed, and 28 large gas fields with geological reserves of over 100 billion cubic meters have been discovered successively, such as Sulige, Anyi, Kelasu, Fuling and Puguang, and the newly proved geological reserves have exceeded 5×1011 m3 for 18 consecutive years (see Figure 1). The four atmospheres of Ordos, Sichuan, Tarim and South China Sea have been built, and natural gas production has increased from 2.44×1010 m3 in 2000 to 1.888×1011 m3 in 2020 (see Figure 2), with an average annual growth rate of 10.8%. Comprehensive resource base, exploration and discovery and production characteristics forecast, through the parallel development of normal and non-normal, sea and land and other measures, China's natural gas production is expected to reach 3.0×1011 m3 in 2035, natural gas development still has great potential.

3. Natural gas infrastructure is improving

Natural gas infrastructure is an important basis for the rapid development of natural gas. Since the construction of the West-East natural gas transmission project began in 2000, China has built an infrastructure network that runs from east to west, from north to south, and from home to abroad. It has built domestic pipeline systems such as West-east natural gas transmission, Sichuan-East natural gas transmission and Shaanxi-Beijing Line, and a natural gas pipeline network with Central Asia, China-Russia and China-Myanmar transnational pipelines as the main bodies. It has formed four major natural gas import supply patterns of west-east gas transmission, north gas southbound, Myanmar gas eastbound and sea gas landing, and a domestic natural gas pipeline network structure of "three horizontal and three vertical".

By the end of 2020, the total length of domestic long-distance natural gas pipelines will be 1.1×104 km, the urban gas pipeline network will be 7.0×104 km, and the receiving capacity of 22 coastal LNG receiving stations will be 8.8×107 t/a. The 27 gas storage units that have been built have a storage capacity of 1.61×1010 m3 and a peak load capacity of 1.02×1010 m3. Overall, the development of natural gas infrastructure has supported China's natural gas imports to exceed 1.4×1011 m3, and natural gas consumption to reach 3.28×1011 m3.

1. Power generation

Compared with coal-fired power generation (coal power), gas-fired power generation (gas power) has the characteristics of clean, low-carbon, flexible and efficient.

① Gas power has obvious environmental advantages over coal power, and the emissions of CO2 and nitrogen oxides during the combustion and utilization of natural gas are reduced by 44% and 50% compared with coal, and there is no dust particles and SO2 emissions.

(2) The peak-regulating gas-electric unit has the advantages of fast start and stop, fast climb rate, good adjustment performance, etc. It takes 5 hours to start the coal-electric cooling unit, and only 9~10 minutes to start the peak-regulating gas-electric unit at full load. The peaking gas power unit can not only improve the power grid security problems caused by the large-scale access of intermittent and random renewable energy, but also solve the problems of energy efficiency reduction and emission increase in the deep peaking process of large coal power units.

(3) Natural gas power generation is highly efficient, and the energy utilization rate of cogeneration can reach 80%, far exceeding 30% of ordinary generator sets. As of October 2020, China's gas-fired power plants mainly have two types of installed units: cogeneration and peak load (peak load), and the installed capacity and regional distribution are shown in Figure 3. The total installed capacity is 97 GW, including 39.5 GW peaking unit (41%), and the natural gas used for power generation reaches 5.71×1010 m3 throughout the year. With the continuous promotion of air pollution prevention and control and large-scale intervention of renewable energy, the scale of demand for power peak balancing is increasing, and gas-fired power generation based on peak balancing power plants is expected to usher in great development.

2. Transportation

Natural gas has significant economic and environmental advantages in the field of transportation. 1 L gasoline and 1 m3 natural gas heat is basically the same, in the international oil price of 60 US dollars/barrel when the domestic gasoline retail price is about 7 yuan /L, while the natural gas gas price is only 3.5~5.0 yuan /m3, that is, the fuel cost of natural gas vehicles is 50%~70% of the fuel vehicle. Compared with gasoline vehicles, emissions of CO, CO2 and nitrogen oxides in the exhaust gas of natural gas vehicles are significantly reduced, and zero emissions of suspended particles, lead oxide and other harmful substances can be achieved (see Table 2).

In addition, natural gas vehicles have incomparable advantages over electric vehicles in long-distance passenger and freight applications, especially in cold areas, and can jointly promote the energy revolution in the transportation field with electric vehicles. By the end of 2019, the number of natural gas vehicles in China exceeded 7.6 million, including more than 7 million compressed natural gas (CNG) vehicles such as taxis and city buses, and 600,000 LNG heavy trucks. With about 6,000 CNG filling stations and 3,900 LNG filling stations, it has become the world's largest transportation natural gas market. The consumption of natural gas in the transportation sector is 3.63×1010 m3, and the equivalent substitute oil consumption is about 2.96×107 t.

At present, natural gas vehicles account for less than 3% of the total number of motor vehicles in the country, with the natural gas infrastructure tends to improve, driven by economic and environmental factors, natural gas vehicles will make a significant contribution to the low-carbon transformation of China's transportation field.

3. Urban gas field

In recent years, with the acceleration of urbanization in China and the help of air pollution prevention and control policies, the demand for urban gas has continued to grow. In particular, with "coal to gas" as the core of the "Air pollution prevention and Control action Plan", "13th Five-Year Plan for Energy Development", "three-year Action Plan to win the blue Sky Defense War", "2017 air pollution prevention and control work Plan for Beijing, Tianjin, Hebei and surrounding areas", "winter clean heating plan for the Northern region (2017-2021) With the intensive introduction of policies and measures such as "Opinions on Accelerating the Utilization of Natural Gas", urban gas consumption has maintained a rapid growth, increasing from 3.6×1010 m3 in 2010 to 6.41×1010 m3 in 2020 (excluding transportation gas).

By the end of 2019, the degree of urbanization in China had reached 60.6%, and the number of people using natural gas was 390 million, accounting for 28% of the total population and 43% of the urban population, respectively. It is estimated that by 2035, China's urbanization rate will reach 72%, and if more than 70% of the urban population uses natural gas, urban natural gas consumption is expected to double.

4. Industrial sector

Natural gas is widely used in the industrial field, and China encourages "coal to gas" in the industrial field, limiting the development of natural gas chemical industry. Natural gas is mainly used in industrial kilns in metallurgy, ceramics, glass processing, food processing, printing and dyeing, paper and other industries, as well as industrial boilers for the production of steam or hot water, to replace coal, gas and petroleum products. Natural gas pure and few impurities, easy to control the temperature and ensure product quality; Natural gas storage and transportation is convenient, without desulfurization and waste treatment and other processes, significantly reducing equipment maintenance, personnel, vehicles and environmental protection related costs. Industrial natural gas consumption is growing rapidly, from 1.95×1010 m3 in 2010 to 1.29×1011 m3 in 2020.

With the continuous promotion of the "coal to gas" policy and the implementation of stricter environmental protection policies, the consumption of natural gas in the industrial fuel field will gradually increase. In the chemical industry, natural gas is mainly used for the production of nitrogen fertilizer (synthetic ammonia) and methanol, followed by the production of acetylene, hydrocyanic acid, formaldehyde, dichloromethane, carbon tetrachloride, carbon disulfide, nitromethane, carbon black and helium extraction. At present, China's natural gas chemical industry does not have a competitive advantage, and the policy of limiting chemical gas use is adopted, so the scale of chemical gas use remains stable, and the natural gas consumption in 2020 is about 3.0×1010 m3.