Sector coupling leading to low-carbon production of power and chemicals in China

Abstract

The global surface temperature had increased by about 1 °C relative to the 1850–1900 period by the end of the 2010s, leaving limited safe operating space and thus a more stringent need to combat climate change to accomplish the Paris Agreement. As one of the world's major greenhouse gas emitters, China has reaffirmed its commitment to emission reduction with the announcement of the carbon neutrality goal in 2020. A fundamental transformation of the current energy structure is necessary, considering that the power sector is a major contributor to national emission. Moreover, China dominates the global methanol and ammonia markets. The nexus between the electricity sector and chemical sector, represented by methanol and ammonia, is considered a promising direction for future decarbonization. This study investigates the cost-optimal transition pathway of the electricity-chemical nexus in China. A bi-level adaptive optimization framework consisting of an upper-level capacity expansion model and a lower-level annual operation model is developed. High-resolution results show that carbon neutrality can be achieved for the co-supply of electricity, methanol and ammonia in China by 2060 through a systematic shift towards combined deployment of low-carbon and negative emission technologies. Sector coupling significantly improves the effectiveness of the transition. The power sector decarbonizes chemical production via green hydrogen, reducing carbon intensities of methanol and ammonia from 3.5 kg CO₂-eq kg⁻¹ to 1.6 kg CO₂-eq kg⁻¹ and 4.8 kg CO₂-eq kg⁻¹ to 1.1 kg CO₂-eq kg⁻¹, respectively. Meanwhile, sector coupling accelerates technology learning by at most 4% in the capital cost of solar photovoltaics, increases renewable penetration by nearly 5% in primary electricity generation, and reduces the power curtailment rate to below 5% by 2060. Green methanol and ammonia, as well as power transmission, all play a role as energy carriers in the future energy system. While grid transmission contributes to balancing the spatially uneven distribution of renewable resources, the equivalent energy transmission via green chemicals complements the former leveraging its relatively light dependence on infrastructure and high flexibility in operation scheduling. According to the analysis of this study, an optimized inter-sectorial integration provides a feasible and promising roadmap to realize carbon neutrality in both the power and chemical sectors.