A comparative Analysis and Simulation of DSM and Energy Efficiency in Chinese and German Industry

AcomparativeAnalysisandSimulationofDSMandEnergyEfficiencyin ChineseandGermanIndustry Sino-GermanEnergyTransitionProject IMPRINT ThereportAcomparativeAnalysisandSimulationofDSMandEnergyEfficiencyinChineseandGermanIndustryispublishedbyGIZintheframeworkoftheSino-GermanEnergyTransitionProject.TheprojectsupportstheexchangebetweenChinesegovernmentthinktanksandGermanresearchinstitutionstostrengthentheSino-GermanscientificexchangeontheenergytransitionandshareGermanenergytransitionexperienceswithaChineseaudience.Theprojectaimstopromotealow-carbon-orientedenergypolicyandhelptobuildamoreeffective,low-carbonenergysysteminChinathroughinternationalcooperationandmutualbenefitpolicyresearchandmodelling.TheprojectissupportedbytheGermanFederalMinistryforEconomicAffairsandClimateAction(BMWK)intheframeworkoftheSino-GermanEnergyPartnership,thecentralplatformforenergypolicydialoguebetweenGermanyandChinaonnationallevel.FromtheChineseside,theNationalEnergyAdministration(NEA)supportstheoverallsteering.TheDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbHleadstheprojectimplementationincooperationwiththeGermanEnergyAgency(dena)andAgoraEnergiewende. Publishedby Sino-GermanEnergyTransitionProjectcommissionedbytheGermanFederalMinistryforEconomicAffairsandClimateAction(BMWK)TayuanDiplomaticOfficeBuilding1-15, 14LiangmaheSouthStreet,ChaoyangDistrict100600Beijing,P.R.China c/o DeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbH ProjectManagement: AndersHove DeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbH Authors: Dr.PhilipSchnaarsTobiasSprengerPatriciaWild JulianKeutz InstituteofEnergyEconomics attheUniversityofColognegGmbH(EWI) Image： BMWK/cover Thisreportinitsentiretyisprotectedbycopyright.Theinformationcontainedwascompiledtothebestofourknowledgeandbeliefinaccordancewiththeprinciplesofgoodscientificpractice.Theauthorsbelievetheinformationinthisreportiscorrect,completeandcurrent,butacceptnoliabilityforanyerrors,explicitorimplicit.Responsibilityforthecontentofexternalwebsiteslinkedinthispublicationalwayslieswiththeirrespectivepublishers.Thestatementsinthisdocumentdonotnecessarilyreflecttheclient’sopinion.Themapsprintedhereareintendedonlyforinformationpurposesandinnowayconstituterecognitionunderinternationallawofboundariesandterritories.GIZacceptsnoresponsibilityforthesemapsbeingentirelyuptodate,correctorcomplete.Allliabilityforanydamage,directorindirect,resultingfromtheiruseisexcluded. II Inhaltsverzeichnis Tableofcontents ExecutiveSummary1 1Introduction6 2Energyefficiency,DemandSideManagement,andinterdependenciesinselectedindustries.72.1Energyefficiency8 2.2DemandSideManagement9 2.3InterdependenciesbetweenenergyefficiencyandDemandSideManagement11 3EnergyefficiencyandflexibilitymeasuresinChinaandGermany12 3.1Energypolicytargetsandregulatoryframework12 3.1.1China’spolicyframework12 3.1.2Germany‘spolicyframework19 3.2CurrentchallengesforenergyefficiencyandDemandSideManagementinChinaandGermany24 3.2.1ChallengesfacedbyChina24 3.2.2ChallengesfacedbyGermany27 4SimulationofenergyefficiencyandDemandSideManagementinChinaandGermany28 4.1Efficientsystemoptimummethodology29 4.2Framework:Today’sandfutureenergysystem33 4.3Estimatedpotentialsandeffectsontheenergymarket37 5Optionsforpolicymakers–EncouragingenergyefficiencyandDemandSideManagement46 5.1PolicyoptionsforChina46 5.2PolicyoptionsforGermany49 References52 Listofabbreviations57 Listoffigures59 Listoftables60 Appendix61 ExecutiveSummary TheenergysystemsinChinaandGermanywillundergofundamentalchangesinthecomingdecades.Maintainingthesecurityofsupplyandachievinggreenhousegasemissionreductionsareamongthetopprioritiesduringthesetransitions.Adaptingtheuseofelectricitytothesenewcircumstancescansupporttheseambitions.Reducingelectricityconsumptionbyadditionalenergyefficiencymeasuresandamoreflexibledemandforelectricitythatcanadapttothetime-dependentavailabilityofrenewableenergyarepromisingoptionsforachievingthesegoals. ThispolicyreportprovidesexpertiseforChineseandGermanpolicymakers,companies,andexpertsaboutthecurrentstateofenergyefficiencyandDemandSideManagement(DSM)infourselectedindustriesandananalysisofthecurrentregulatoryframework.ThesefindingsareaccompaniedbypolicyoptionsforincreasingDSMandenergyefficiencyforbothcountries. Thereportissupportedbyasimulationtool.ThetoolallowsuserstoexplorepotentialinterdependenciesbetweenenergyefficiencyandDSManditseffectsonChina’sandGermany’scurrentandfutureenergysystems.Withinthistool,userscanchangethetechnicalparametersoftherespectiveelectricitymarketsandtheenergyefficiencyandDSMpotentialofindustrialprocessesinthesecountries.Furthermore,itallowstheusertoassesstheeffectsofpotentialpolicymeasuresonmarketoutcomes.Thetoolcalculatesthemarketprice,averageCO2intensityofthegeneratedelectricity,andpotentialeconomicsavingsofchangesinenergyefficiencyandDSMinselectedindustriesfortheyears2030and2035inGermanyandChina,respectively. EnergyefficiencyandDemandSideManagement Thereportanalysesenergyefficiencyfromatechno-economicperspectiveandfocuseso