Diversifying China’s urban heating systems will reduce risk of carbon lock-in

Since its implementation in 2017, China’s clean heating policy has considerably improved air quality.  However, the share of non-fossil sources in China’s urban district heating systems remains low.   According to a Princeton-led study, the diversification and decarbonization of heat sources for district heating systems will be crucial for  China to reach its carbon neutrality goal by 2060.  

In China, district heating systems are widely used to distribute heat across cities via insulated pipes from central locations. District heating systems have the ability to integrate diverse heating sources, making them a promising way to decarbonize heating.  However, the opportunities to decarbonize district heating sources have been largely untapped to date.  In 2020, fossil fuels accounted for 90% of global district heating production, which contributed about  4% of global carbon emissions.  

Furthermore, new coal-fired combined heat and power (CHP) plants are being built in China as cost-efficient alternatives to polluting coal technologies.  CHP plants have been viewed as environmentally advantageous because they utilize waste heat from power plants for district heating.  However, because of the need for heat in winter, this approach may delay decarbonization as it will be difficult to decommission coal fired power plants that are providing heat needed for cities.  Thus, continued development and operation of CHP plants will  slow the expansion of low-carbon heating sources, including industrial waste and air/ground-source heat powered by decarbonized electricity, thus resulting in carbon “lock-in.”   

“Newly built CHP units may continue to operate for decades, not only locking in carbon emissions from district heating but also reducing the power sector's ability to fully decarbonize,” says lead author and C-PREE research associate Dr. Shangwei Liu.  “During the 5-6 month heating season in northern China, CHP units must generate electricity based on heat demand, making them difficult to decommission. This hinders the integration of wind and solar power, increasing the risk of curtailing these renewable sources.”

Compiling an infrastructure database of over 1,000 power and industrial plants in northern China, Liu, Prof. Denise Mauzerall, and their research team examined the cost and emissions implications of near-term (2020-2030) district heating investment scenarios based on the assessment of 15 district heating technologies. 

The researchers looked at three hypothetical investment scenarios: a high-coal scenario that assumes “business as usual” practices that rely heavily on the construction of new coal CHP plants; a low-coal scenario that assumes the full implementation of clean heating policies and the extensive integration of industrial waste and ground-source heat; and a mid-coal scenario that assumes a combination of the high and low-coal strategies.  

Under the high-coal scenario, CHP power plants would cumulatively lock-in almost 19,000 terra-watt hours (TWh) of coal-fired electricity and produce about 30 Gt of carbon dioxide emissions from 2020 to 2060.  For context, this would be approximately 50% of China’s coal-fired electricity budget that is compatible with the global climate target of 1.5 °C and approximately 30% of the 2 °C target.  

“Right now, CHP plants make up about 9% of China’s total coal-fired electricity generation, and they’re inflexible,” explains Liu. “If more CHP plants are built and overall coal-fired electricity generation goes down, the share of these inflexible sources could rise to maybe 20% or 30% of total coal power generation. This would be a big problem for integrating renewables and decarbonizing the grid.”

Under the low-coal scenario, electric technologies, including waste heat recovery with electric heat pumps and air/ground-source heat pumps, will meet ~34% of total district heating demand in 2030.  Such a substantial electrification will require a significant expansion of clean power infrastructure, especially during the heating season.  However, utilization of such low-carbon sources of heat will be critical for decarbonization in China. 

“Strategic low-carbon district heating technologies will be needed for China to peak carbon emissions by 2030 and reach carbon neutrality by 2060,” explains Prof. Denise Mauzerall, a faculty member at the Princeton School of Public and International Affairs and the Department of Civil and Environmental Engineering.  “ Our findings indicate the importance of the government’s recent proposals to decarbonize district heating. These efforts should be immediately prioritized to avoid long term carbon lock-in.”

The paper, “Diversifying heat sources in China’s urban district heating systems will reduce risk of carbon lock-in,” was co-authored by Shangwei Liu (Princeton School of Public and International Affairs, Princeton University), Yang Guo (Princeton School of Public and International Affairs, Princeton University), Fabian Wagner (Energy, Climate and Environment Program, International Institute for Applied Systems Analysis (IIASA)), Hongxun Liu (School of Economics and Finance, Xi’an Jiaotong University), Ryna Yiyun Cui (Center for Global Sustainability, School of Public Policy, University of Maryland, College Park), and Denise Mauzerall (School of Public and International Affairs and the Department of Civil and Environmental Engineering, Princeton University). The paper appeared in Nature Energy on July 1st, 2024.