• Energy Research

Abstract Surface facility costs are a significant component of the development costs that account for most of the shale gas development input. In conducting feasibility studies for shale gas development projects, particularly during the preliminary feasibility study stages, better estimation techniques for surface facility costs can help quickly and accurately estimate the input required to unlock shale gas investment opportunities. After investigating the salient characteristics of shale gas surface facilities, this study develops a new estimation approach for shale gas surface facility costs that combines the advantages of considering terrain variance and the law of declining costs. The results of an example in China indicate that this new technique can significantly improve the accuracy of estimating surface facility costs associated with shale gas development. Furthermore, this study can significantly improve the evaluations of the economic viability of shale gas development projects, thereby reducing investment risks and enhancing investment opportunities.

Because of its resource potential and clean burning advantages, the development of shale gas can significantly increase the supply of cleaner energy while offering the associated benefits. To foster shale gas development, many policy incentives have been introduced in China. However, the current incentives have not been sufficiently aggressive, and the shale gas industry has been slow to develop. Existing policies thus need to be further improved. To provide effective support for decision makers in China, a technical and economic evaluation is performed in this study to explore the profitability of shale gas production in pilot zones. The results show that shale gas production is subeconomic under the current technical and economic conditions. Based on this evaluation, a policy analysis is conducted to investigate the profitability improvement offered by the major policies available in China to elucidate a path toward improving incentive policies. The results indicate that policy instruments related to gas prices, financial subsidies, corporate income taxes or combinations thereof could be used as priority options to improve policy incentives. Based on these results, recommendations are presented to improve the current incentive polices aimed at accelerating shale gas development.

Abstract The life-cycle analysis (LCA) is conducted with a combination of real-time fuel consumption rate data for diesel/liquefied natural gas (LNG) heavy-duty vehicles (HDVs) in China, actual provincial diesel/LNG HDV population data, and a life-cycle inventory database for the Tsinghua-LCA Model (TLCAM) specified for the context of China. The results indicate that direct energy consumption and the life-cycle energy use (MJ) of an LNG HDV are approximately 7.4% and 6.2% higher than that of a comparable diesel HDV, whereas an approximate 8.0% reduction in the life cycle of GHG emissions is estimated if diesel HDVs are replaced with LNG HDVs in China. Due to the increasing use of LNG as an HDV fuel in China (i.e., approximately 4.6 billion cubic metres of natural gas in 2015), the accumulated diesel fuel substituted with LNG was approximately 16 million tons, which generated a GHG emission reduction of 6 million tons of CO 2 equivalent in the HDV fleet from 2006 to 2015. Given that the HDV fleet contributed approximately 6.1% of all GHG emissions in China in 2015, growing the LNG HDV population can increase GHG emission reduction by an approximate range of 6.5–9.1 million tons of CO 2 equivalent by 2020.

Distributed-solar-photovoltaic (PV) generation is a key component of a new energy system aimed at carbon peaking and carbon neutrality. This paper establishes a policy-analysis framework for distributed-solar-PV generation based on a technical- and economic-evaluation model. Given that the resource endowment is becoming lower and the raw material costs are becoming higher, the profitability of the deployment of distributed-solar-PV-generation projects in China is generally becoming much worse. Some distributed-PV-generation projects are even becoming unprofitable. This will not be helpful for the sustainable development of distributed-PV generation, which will play a vital role in attaining the goal of carbon neutrality. Based on the established model for techno-economic evaluation, a systematic policy analysis is performed to identify the effect of possible policy instruments such as financial policies on improving the economic profitability of distributed-PV-development in China. The results indicate that policy instruments related to preferential financing, green certificate, tax incentives and combinations thereof are available for priority measures aimed at optimizing incentive policies for enhancing the economic viability of distributed-PV deployment in China. Based on these findings, recommendations are proposed to optimize the currently available policy instruments for accelerating the sustainable development of the distributed-PV industry towards a carbon-neutral future.

Abstract Although there have been discussions regarding the commercial prospect of shale gas in China, no quantitative and convincing analysis regarding its economic viability has been reported. This research aims to explore the future of the shale gas industry in China using a single-well model. This model is established with the DCF (Discounted cash flow) method aiming at getting an average or representative reflection of the economic viability of shale gas. In the model based on data mainly from pilot areas in Sichuan Basin, three scenarios are conducted to discuss the current economy, the short-term prospect, and the future of the shale gas industry. Under the current technological and economic conditions, China's shale gas resources are not worth an investment. However, in the near future, several sweet-spots are promising, particularly with the expectation of higher gas prices and lower drilling and completion costs (D&C costs). Although the sweet-spots are promising, it is difficult to achieve the goal of large-scale development according to the known information if mainly relying on current policy, unless there are sufficient sweet-spots. Hence, we hold a cautiously optimistic attitude towards the future of the shale gas industry. We suggest that the government should spend more on supporting resource surveys and exploration in the initial stages. After identifying the resource status, a more comprehensive development plan with systemic policies conformed to the resource status is warranted, including encouragement of technical innovations, a system for mature shale gas technical service markets, and a market-oriented price.

Abstract For orderly and sustainable development, petroleum resources should be planned scientifically. Based on the discount cash flow (DCF) method, we propose a new approach for the comprehensive grading of petroleum reserves in China because existing reserve classification methods are unable to support the formulation of exploitation planning. This approach combines five factors: economic value, technological progress, subsidy policy, reserve scale and resource risk. Examples show that this approach can be used to grade natural gas resources rapidly and effectively, which is helpful for providing effective guidance for the scientific development of gas resources.

Shale gas, due to its clean-burning and efficient nature, is becoming an increasingly promising alternative energy resource. It is commonly held that promoting shale gas development will gradually play a significant role in meeting the energy needs of economic and social development as well as reducing harm to the environment. Given the significant implications, many countries are pursuing shale gas opportunities. However, numerous concerns have been raised about the economics of shale gas development, as it is difficult to evaluate. Accurately evaluating the economic viability of shale gas development to reduce investment risks and increase investment opportunity is the key issue that needs to be urgently addressed. This paper presents a systematic review and examination of the technical and economic evaluation techniques for the development of shale gas to provide an overview of their current status. Over time, some progress has been made in existing technical–economic evaluation techniques. It is worth noting that these techniques need to be further improved to more precisely assess the economic feasibility of developing shale gas for assisting investment decisions effectively. For this reason, various potentially useful ideas and approaches are presented to propose some potential improvement in evaluation techniques for shale gas development, which may materialize in possible future trends.

Abstract Globally, crop straw is a rich resource and further establishment of its use as an energy source is an important aspect in developing the circular economy. Projects in this vein can bring benefits such as improving energy access and living conditions as well as boosting the local economy and employment opportunities in rural communities. This paper presents a detailed case study on the production of bio-natural gas (BNG) from corn straw in China, using Life Cycle Analysis (LCA) to assess energy consumption and greenhouse gas (GHG) emissions, conducting economic analysis, and analyzing operation management models. The “Nongbaomu” business model (whereby professional personnel assist farmers in the management of straw collection, bundling, storage and transportation) and the “Mutual Offsetting in Kind” business model (whereby farmers can buy a quota of the project’s BNG products at a lower price in return for selling straw to the project) can ensure the acquisition of straw by the BNG project at stable prices and high quality. Because the main product (BNG) replaces refined oil products used by automobiles and the byproduct (organic fertilizer) replaces traditional fertilizer (produced using coal), the project offers the potential for significant decreases (up to 80%) in life cycle GHG emissions and fossil fuel use. Benefited from the relatively high natural gas prices in the project location and applicable government subsidies, our studied case was found to be economically viable. The findings in this study are also likely to be relevant to other countries where governments should develop industrial policies that support the development of rural distributed energy, and introduce and implement appropriate subsidies to allow BNG to compete in the traditional natural gas market. Although, enterprises are responsible for selecting an effective business models and the most appropriate technological pathway, governments should also identify the ways in which they can support businesses to make these choices.

Due to the large-scale utilization of high-carbon fossil energy, considerable amounts of critical air pollutants (CAPs) and greenhouse gas (GHG) have been emitted, which has led to increasingly serious global climate change and local air pollution problems. Given that climate change and air pollution have the same source, energy systems, the rational development and use of energy for collaborative governance should be emphasized to solve these problems in parallel. This paper presents a multi-dimensional, multi-perspective and achievable analysis framework to quantitatively evaluate the emission reduction effects of energy countermeasures aimed at tackling climate change and governing air pollution in support of sustainable development. As a typical developing country pursuing sustainable development, China is taken as an example to demonstrate an application of the proposed framework to assess the emission reduction effects of energy countermeasures issued for tackling climate change and governing air pollution on CAPs and GHG. The results indicate that the key energy actions proposed in this paper would result in emission reductions of approximately 6 million tons (Mt) of CAPs and 575 Mt of GHG in 2016. By 2020 and 2030, emission reductions of 12 Mt of CAPs and 1094 Mt of GHG and of 21 Mt of CAPs and 1975 Mt of GHG, respectively, will be achieved. The proposed framework can effectively help China identify the emissions reduction effect of a given energy countermeasure and support the development of policy describing the next steps for tackling climate change and haze pollution. The proposed framework in this paper is also beneficial for countries similar to China in their efforts to simultaneously address climate change and improve air quality.