The 13th Launch of Forecasting & Prospects Research Reports on Energy Economy in Beijing

BEIJING,Jan. 11,2023 --On January 8,2023,the Center for Energy and Environmental Policy Research of Beijing Institute of Technology held the "The 13th Launch of Forecasting & Prospects Research Reports on Energy Economy" in Beijing,and launched eight research reports which are "Research on China Energy Economic Index in 2022","Research on High-Quality Energy Development Index in 31 Provinces (2012-2022)"," Patterns and Impacts of Interprovincial Virtual Water Flows in China's Power Sector","International Crude Oil Price Analysis and Forecasting in 2023","Reviews of China's Carbon Market and Prospects of its Optimal Rolling Out Plan (2023)","Layout Planning and Outlook of CCUS Pipeline Networks in China","The Regional Economic Impacts of Global Warming" and "Prospects for the Energy Development: Towards Chinese Path to Modernization". This series of reports is produced by the research team led by Professor Yi-Ming Wei,the Distinguished Professor of Beijing Institute of Technology. Based on the changes in the international and domestic energy economy and climate policy situations in the previous year,specific topics are selected to carry out targeted research results. Since 2011,Beijing Institute of Technology has launched reports for 13 consecutive years and has gained widespread social attention.

According to the report "Research on China Energy Economic Index in 2022",China's energy economy was steadily recovering in 2022. In the near future in 2023,the photovoltaic power generation industry can be prioritized for investment,while the power grid automatic control equipment industry has long-term investment potential. The traditional energy sector needs to explore the new value of system regulation.

The report "Research on High-Quality Energy Development Index in 31 Provinces (2012-2022)" concludes that: since 2012,the high-quality development of energy in provinces has steadily moved towards a high level in small fluctuations,and the inter-provincial differences have gradually narrowed. In 2022,Shanxi and Inner Mongolia played a key role in stabilizing energy prices and ensuring supply. Sichuan greatly increased the output and proportion of renewable energy power,but its system tuning capabilities such as emergency response and peak shaving were seriously insufficient.

The report "Patterns and Impacts of Interprovincial Virtual Water Flows in China's Power Sector " holds that virtual water transfers in the power sector exacerbate regional water stress,and water shortages tend to reduce the reliability and security of power supply. Therefore,a new pattern of synergistic development of power and water resources should be accelerated soon.

According to the report entitled "International Crude Oil Price Analysis and Forecasting in 2023",the average price will fall,the supply and demand of the international crude oil market will be tight,sanctions against Russia over Ukraine will continue to disturb the market,and the uncertainty of short-term oil price will rise. The average price of Brent and WTI crude oil is estimated to be in the range of $82-92 per barrel and $77-87 per barrel in 2023.

The report "Reviews of China's Carbon Market and Prospects of its Optimal Rolling Out Plan (2023)" pointed out that the average carbon price of China's carbon markets in 2022 is 60% higher than that in 2021. The report also suggested that in the next construction stage,the cement,steel,and glass industries should be assigned priority for including in China's national carbon market so as to maximize the emission abatement cost savings from the carbon market.

According to the report "Layout Planning and Outlook of CCUS Pipeline Networks in China",developing CCUS clusters will rely heavily on dedicated CO2 pipeline networks and shared infrastructure with low-cost advantages. With coal power plants considered as carbon emission clusters,the peak demand for CO2 transportation in CCUS is expected to be about 0.654~1.536 Gt CO2 by 2050,and the total pipeline mileage required will be over 17,000 km. However,CO2 pipeline transportation is still in its infancy in China,and there is an urgent need to accelerate the planning and layout of the CCUS pipeline network.

The report entitled "The Regional Economic Impacts of Global Warming" points out that global warming will significantly increase the economic losses over the world and exacerbate development inequality among regions,which makes it necessary to establish a fair and reasonable system of global climate governance and to promote climate adaptation plans tailored to local conditions.

According to the report "Prospects for the Energy Development: Towards Chinese Path to Modernization",the huge population size requires China to ensure its energy security more strictly. Universal energy services will reach a new level. Photovoltaic power generation will further expand rural residents' access to factor income and other property income channels,helping to achieve common prosperity for all people. New energy development,and energy conservation and efficiency enhancement are promoted with concerted efforts,helping to coordinate material and cultural-ethical advancement.

China's Energy Economy to Rebound Steadily in 2022,New Energy and Energy Integration Industry to Gain Momentum

According to Prof. Baojun Tang,author of the "China Energy Economy Index Study in 2022",China's energy economy would rebound steadily in 2022 in the post-COVID-19 pandemic era,in a similar cyclical cycle to the macro economy,but with less volatility,serving as a "buffer zone" against shocks. The macroeconomic and energy economy trends would be positive in 2023 and were forecasted to recover to the level in 2019. In the short term,the photovoltaic industry and the wind power industry would have had the combined advantages of high industry quality and high stock index,and could be a priority investment. In the long term,the grid self-control equipment industry index would be steadily improving and had investment potential. In 2023,energy supply demand was expected to rebound,traditional energy industries such as thermal and hydropower would have been the main force to ensure supply,needing to stimulate the new value of system regulation. The energy industry as a whole needs to ensure a secure and stable supply. It needs to take advantage of the economic recovery and upgrade quickly to feed back into the country's economic revival.

In 2022,Guangdong,Jiangsu and Beijing Were the Benchmark for High-quality Energy Development,Shanxi and Inner Mongolia Played a Key Role in Stabilizing Prices and Ensuring Supply

According to Prof. Baojun Tang,the author of the report "Research on High-quality Energy Development Index in 31 Provinces (2012-2022)",since 2012,the national energy quality development has steadily progressed to a high level with small fluctuations,with the best overall performance in 2019 and a stable state in 2022 by stopping downward trend during the epidemic. The high-quality-development gap among provinces gradually narrowed,but there were still some provinces with high-quality energy development far above the average level. In 2022,Shanxi and Inner Mongolia played a key role in stabilizing the price and supply of coal nationwide by increasing storage and production and improving energy delivery capacity. Sichuan greatly increased the output and proportion of renewable energy power,but its system tuning capabilities such as emergency response and peak shaving were seriously insufficient. In addition,Anhui and Yunnan promoted energy conservation and carbon reduction on the energy consumption side mainly relying on the development of electrification; Guangdong and Yunnan improved the green and low-carbon level by expanding the application scale of renewable energy and improving the energy structure; Jiangsu's R&D investment and patent output were outstanding,and the total turnover of Beijing's technology market took the lead,which show the advantage of energy technology innovation.

Enhance the climate resilience of the power system and actively promote the synergic management of the energy-water nexus.

According to Prof. Shen Qu,the author of the report "Patterns and Impacts of Interprovincial Virtual Water Flows in China's Power Sector",climate change has an adverse impact on China's natural ecosystems,including water systems,which will seriously threaten the safety and stability of China's power systems. The increasing conflicts caused by the huge water use of power systems and water scarcity in China,the urgency to upgrade cooling efficiency and energy conversion efficiency,and the contradiction between large wastewater discharge and low utilization of recycled water have been intensified. Reflecting on the security of energy,water,and carbon resources and their interconnections in management is paramount for energy security and the climate resilience of the power system. In the future,the power sector needs to accelerate the construction of water conservation and water recycling facilities,promote efficient cooling and water-saving technologies,and strengthen wastewater and recycled water utilization.

In 2023,the Average Price of International Crude Oil Price Will Fall and the Uncertainty of Short-term Price Will Rise

Prof. Lu-Tao Zhao,the corresponding author of the report entitled "International Crude Oil Price Analysis and Forecasting in 2023",believed that the global economic recovery in 2023 would be more divergent,with demand growth in emerging economies showing resilience and pessimistic expectations of recession reflected more in crude oil demand in developed economies such as Europe and the US. OPEC+ will maintain its production cut plan,the US crude oil production increase capacity is limited,the export of Russian oil is restricted,and the crude oil supply will be relatively restrained. The dollar index will fall back,net longs will rebound,and the geopolitical risk premium dominated by the Russia-Ukraine conflict will amplify the oil price oscillation range and increase the volatility risk of the crude oil market. In summary,the supply and demand of the international crude oil market are tight,geopolitical factors continue to disturb the market,and the uncertainty of short-term oil prices will rise in 2023. The average price of Brent and WTI crude oil is estimated to be in the range of $82-92 per barrel and $77-87 per barrel.

Further enlarge the industry coverage of China's national carbon market,and make better use of the carbon market to reduce the costs of emission reduction

Prof. Ke Wang,the major author of the report "Reviews of China's Carbon Market and Prospects of its Optimal Rolling Out Plan (2023)" pointed out that as China's carbon market enters its second performance cycle in 2022,the pilot carbon markets and national carbon market are making steady progress. The development of the pilot carbon markets is relatively stable with few fluctuations in trading volume compared with that in 2021. The national carbon market has been operating steadily,and the carbon price has increased by 60% compared with that in 2021. Domestic enterprises respond positively to the carbon market,and the whole society pays close attention to the construction of carbon market. The report suggested that in the next phase,considering the emission abatement potentials and the readiness for participating in the carbon market,China's national carbon market should preferentially include the following sectors: cement,glass,pulp,chemical material,nitrogenous fertilizer,and aluminum smelting.

Accelerate the planning and layout of CCUS pipeline network to promote the development of CCUS clusters

Prof. Yi-Ming Wei,the major author of the report "Layout Planning and Outlook of CCUS Pipeline Networks in China",pointed out that CCUS technology has shown a new trend of industrialization and cluster demonstration. Pipeline transportation will become the primary choice for CO2 transportation in future large-scale CCUS demonstrations. CCUS technology will play an essential role in achieving national carbon neutrality targets,with peak CO2 transport demand expected to reach 654~1,536 million tons of CO2 and an urgent need to develop shared infrastructure. With coal power plants considered as carbon emission clusters,a total of more than 17,000 km of CO2 transportation pipelines need to be built nationwide. The Songliao Basin,Ordos Basin and Junggar Basin are the key areas for deploying CCUS pipeline network facilities. We suggest strengthening the top-level design of CCUS pipeline networks,formulating regulations and industry guidelines for CO2 pipeline transportation,exploring CO2 transportation management models and pricing mechanisms,introducing incentive policies for pipeline construction and operation,and accelerating infrastructure construction for CCUS clusters in the future.

Enhance climate resilience of the economic system and promote the balanced and cooperative development among regions

Assoc. Prof. Xiao-Chen Yuan,the major author of the report "The Regional Economic Impacts of Global Warming",pointed out that climate change will significantly affect the sustainable development of global economy and exacerbate the economic inequalities between and within countries. Global cooperative emission reduction will help protect the development rights and interests of low-income regions. Facing the challenge of global warming,the international community needs to spare no effort to achieve the 2℃ limiting target and build a global climate governance system that is fair,equitable,cooperative and beneficial to all. To achieve the balanced development among regions,the financial assistance and technical support should be provided to the less developed areas to mitigate and adapt to climate change. There needs to be locally-tailored responses to diverse climate risks,and it is critical to improve the economic resilience to effectively reduce the potential damage of climate change.

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