Developing High-Efficiency, Low-Carbon, Clean Coal in China

By Ni Weidou
Academician, Chinese Academy of Engineering, Professor, Department of Thermal Engineering, Tsinghua University
Song Shizhong
Ph.D. Candidate, Department of Thermal Engineering, Tsinghua University
Wang Minghua
Manager, Shenhua Science and Technology Research Institute Co., Ltd

In the last few decades, China has dramatically expanded access to energy and, as a result, has achieved nearly universal electrification. Although this accomplishment is notable, China’s energy mix is facing several pressing issues with important domestic and global implications.

China is coal-rich and, for this reason, continues to rely on coal for the majority of its primary energy (over 70%), resulting in cost, reliability, and energy security benefits. However, coal resources are being consumed rapidly. China has built, and is continuing to grow, massive industries that hinge on the availability of coal; therefore, coal conservation through more efficient utilization is in the nation’s best interest.

China has achieved near full electrification in recent years, but the country’s energy strategy is being revised.

China has achieved near full electrification in recent years, but the country’s energy strategy is being revised.

As with any country, energy security is an important issue for China. With few oil reserves, China relies on imports for a large percentage of its oil, a fact that will be difficult to change as China’s oil consumption continues to rise. Approximately 200 million tonnes of oil are produced domestically each year; experts have stated that this amount is a suitable volume for China’s oil production and larger volumes could hinder future drilling operations.1 China’s annual oil consumption has reached 450 million tonnes, which means that China must rely on imports for more than half of its oil.

In addition to national resource conservation and energy security issues, the environmental impact of China’s energy production and utilization has become an increasingly pronounced global concern. One of the most problematic issues is the poor air quality in China’s urban centers, which can be primarily attributed to two main factors: direct coal combustion without emissions controls and emissions from the combustion of transportation fuels.

The coal-fired power plants being built in China today are larger and more efficient than those of the past. However, many plants still operate at low efficiency and/or have minimal or no emission controls. In addition, direct combustion of coal in industrial applications or for household heating adds to the pollution. These factors contribute to the release of SO2, NOX, mercury and other heavy metals, and particulate matter (especially fine particulate matter such as PM2.5).

The burning of transportation fuels is another key contributor to air pollution. The gasoline and diesel produced by China’s oil refining industry have always had a relatively high sulfur content, which leads to increased production of particulate matter (including PM2.5).

Another environmental concern is climate change. If the future rise in global temperatures is to be limited to 2°C, some experts have projected that global CO2 emissions in 2050 would need to be about 50% lower than those in 1990.2 China has overtaken the U.S. as the world’s largest CO2 emitter with about seven billion tonnes released each year, which means that China’s actions are pivotal to achieving success in mitigating climate change. For this reason, China is under tremendous international pressure to reduce its emissions.

Even with developed countries committed to reducing their emissions by 80%, developing countries would still need to bring down their overall emissions to 36% below 2005 levels. Coal combustion and burning transportation fuels are the main sources of CO2 emissions in China. Although China has strengthened efforts on energy conservation and the development of nuclear and renewable energy, China’s CO2 emissions are expected to continue increasing; China must also be practical about reducing emissions as it remains a developing country. Therefore, China should be proactive about how best to address emissions reductions with solutions that can be realistically implemented.

While air pollution and climate change are very real concerns, China’s energy mix and infrastructure cannot be drastically modified in the short term, so strategies to improve the efficiency of coal utilization and improve transportation fuel quality have become an important topic.

Optimized approaches to coal utilization in a high-efficiency, low-carbon, cleaner manner, including producing cleaner transportation fuels from coal, could be the solution to the myriad concerns facing China’s energy industry. Although there are many approaches to cleaner and more efficient coal utilization, we believe the most valuable option that addresses all the problems explained is gasification of coal to produce chemicals, fuels, power (i.e., polygeneration), and eventually carbon capture, utilization, and storage (CCUS).

The Shanghai Waigaoqiao No. 3 power plant is one of the many high-efficiency power plants built in China in recent years.

The Shanghai Waigaoqiao No. 3 power plant is one of the many high-efficiency power plants built in China in recent years.

Approaches To Coal’s Role in High-Efficiency, Low-Carbon, Clean Energy

Several clean and efficient coal conversion methods are currently under development or already available.

Carbon Capture, Utilization, and Storage

Ultimately, the lowest-carbon use of coal is tied to capturing and storing CO2. China’s CCUS strategies should be implemented after considering the impact to China’s economy, energy infrastructure, and also the unique opportunities possible to China because it is still growing. We believe China should develop its own technologies and not simply follow the paths chosen by other nations. China’s CCUS strategies have potential; the key challenge is how best to coordinate and manage overall efforts.

The costs associated with CCUS are, in part, tied to the cost of the CO2 capture, which can vary dramatically between different coal utilization options. In terms of power generation, there are two main focus areas for clean coal technology development in China. The first is high-efficiency supercritical and ultra-supercritical coal-fired power plants and the other is gasification [for power production this entails integrated gasification combined cycle (IGCC)].

High-Efficiency Power Plants

China’s state-of-the-art high-efficiency power plants are some of the best in the world; these plants produce less CO2 compared to less efficient subcritical plants and are an important first step in reducing CO2 emissions.

An example of one such plant is Shanghai Waigaoqiao No. 3 power plant. At 75–81% capacity this plant has an average coal consumption rate of 276 g/kWh (including desulfurization and denitrification—an actual annual efficiency of 44.5%). This compares favorably with China’s current average coal consumption for power generation, 330 g/kWh, as well as with the world’s most efficient power plant, the 400-MW Nordjylland Power Station No. 3 in Denmark, with double reheat and cold seawater cooling units. At a capacity of 75%, the coal consumption rate at Nordjylland is 288 g/kWh.

China’s 600°C ultra-supercritical plants are constructed using expensive imported materials that account for 50% of the cost of a 1000-MW boiler. Increases in temperature and pressure would require even higher-standard materials. Furthermore, in direct coal combustion, collecting CO2 from the flue gas comes at a relatively high cost; much more research and development is needed to bring down costs.

Therefore, even though the development of high-efficiency coal-fired power plants is vital and will assuredly continue, notable challenges still exist and we believe this should not be the only option pursued by China.

Approaches Made Possible Through Gasification

Compared to high-efficiency coal-fired power plants, IGCC is at an early stage of development and, thus, may offer greater potential for improvements in terms of power generation efficiency. As IGCC also has unique advantages in terms of capturing emissions and can be coupled with polygeneration to reduce construction costs, it is worth further development.

Capture of emissions from a gasification system, including IGCC power plants, differs because it occurs upstream of power generation at a higher concentration and/or pressure. For a conventional power plant, CO2 capture will reduce the plant’s efficiency by about 11%; for an IGCC power plant, the efficiency loss for CO2 capture is less, about 6–7%. Although the efficiency is high and the capture of emissions is simpler, there is a substantial upfront investment for IGCC, RMB12,000/kWh (US$1900/kWh).

Thanks to many years of demonstration and commercial use, the reliability of IGCC plants has been gradually increasing. Still, in addition to the costs, another major issue with IGCC plants is that most such plants are not suitable for variable load operation.

For the sole purpose of power generation, gasification is not economically competitive in China and, in our opinion, therefore not currently a suitable solution for widespread deployment. Even so, with the aspiration of bringing down costs, some demonstration and deployment of IGCC is proceeding in China. For instance, the Huaneng Group has built and operated a 265-MW IGCC power plant in Tianjin under the GreenGen project.

Another important clean coal technology that employs gasification is polygeneration, which can be used to combine coal-to-chemicals/fuels and IGCC. In a polygeneration process, coal can be combined with wind, solar, biomass, etc., in a variety of configurations to produce a wide array of products (including chemicals, fuels, electricity, etc.). Of course, one potential product of polygeneration systems could also be low-sulfur transportation fuels—leading to energy security and environmental benefits. Importantly, polygeneration technology does not require major technical breakthroughs. It is based on existing, proven technologies and thus has much potential to advance the clean and efficient utilization of coal, making it an important direction for development.

Polygeneration allows for plants to be highly integrated and for the overall energy and materials flow to be optimized. With a single-product gasification process, the coal savings for parallel systems at the same facility is minimal. However, integrated serial systems at a polygeneration facility with multiple products can save a significant amount of coal. In fact, the efficiency of an integrated serial system can reach 45.5% without the CO shift. The water consumption per unit power produced for polygeneration systems is also lower than that of conventional power plants.

As the technology advances, the efficiency of polygeneration technologies can be further enhanced. For example, the efficiency of gasification systems with high-temperature syngas cleanup can be raised to 49.3%. When ionic membrane oxygen separation technology is employed, the system efficiency can be raised to 50.1%. For 1700°C-class gas turbines efficiency can reach 53%. Finally, coal-water slurry preheating technology gasification systems can offer efficiencies of 57.3%. Overall, coal-based polygeneration systems have tremendous potential for using coal cleanly and efficiently, particularly when power and chemicals are both produced.

If China does not expand outside only the traditional technological approaches to coal utilization (i.e., direct combustion), we believe this could lead to a series of problems related to the environment and greenhouse gas emissions. Therefore, from this point forward we believe China’s modernized energy development strategies must emphasize the deployment of polygeneration, which could offer energy efficiency, energy security, and environmental benefits.

Pressing Needs Under a Strong Polygeneration Energy Strategy

Under China’s current energy constraints and challenges, the synergetic use of coal with other energy sources is needed. We believe this integration is the key to low-carbon development in China and also to utilizing different energy sources in the most appropriate way possible. Polygeneration offers unique opportunities to use coal more efficiently, integrate coal energy systems with alternative energy sources, and dramatically reduce CO2 emissions (see Figure 1). In order to achieve better synergy, a smart energy network must be established, which will allow the integration of information technology within energy systems to optimize the flow of energy in China.

Figure 1. Coal can be integrated with renewable energy sources through gasification; in this example methanol can be produced with a CO2 stream ready for CCUS.

Figure 1. Coal can be integrated with renewable energy sources through gasification; in this example methanol can be produced with a CO2 stream ready for CCUS.

Polygeneration with Chemical Products

Considering the high costs of IGCC power generation, when taking into account the future requirements for controlling emissions, including SO2, NOX, particulate matter, and mercury, as well as CO2, the best approach today is to reduce costs through chemical product polygeneration.

China has recently built several hundred gigawatts’ worth of pulverized coal supercritical and ultra-supercritical generating units. These high-efficiency plants can be refitted with CO2 capture in the future. CCUS can also be applied to polygeneration facilities, which offer the lowest-cost option for CO2 capture and could be used to support demonstrations of CO2 utilization and storage in the near term. As it takes time for an energy process and systems to develop and mature, if the polygeneration model is not promoted now, the delay could mean paying a higher price in the future.

In terms of energy security, the liquid fuels produced by coal-based polygeneration, particularly methanol and dimethyl ether, are excellent coal-based alternatives for transportation fuels and can help alleviate China’s oil shortage with much-needed low-sulfur fuels. At the same time, methanol can be used to produce polyethylene and polypropylene, an example of using coal-to-chemicals to replace a portion of conventional petrochemicals—again reducing oil imports.

China has already mastered the leading polygeneration technologies including large-scale coal gasification, which has been successfully demonstrated in industrial applications. For example, the Yankuang Group’s IGCC and methanol polygeneration unit in Shandong is a global first-of-a-kind and has demonstrated long-term, stable operation. This system operates with an efficiency of up to 57.16%, which is 3.14 percentage points higher than has been achieved by independent coal-to-methanol and IGCC systems in China.3 Its power conversion efficiency is as high as 39.5%. As long as the various sectors in China (coal, chemical, and power) are able to break the barriers to cooperation, along with international cooperation, we can tap the potential of polygeneration to improve energy efficiency and reduce emissions.

Synergy with Renewables

China’s wind power capacity ranks first in the world, but about 30% of the wind turbines installed in China are off-grid. Even some of the on-grid wind farms are restricted in their power generation for various reasons, which results in wasted energy.

China now looks to find a way to deploy wind on a larger scale without adversely impacting the overall energy served by other sources. One strategy worth exploring is increased synergy between wind energy and the rapidly developing coal-to-chemicals as well as the proposed polygeneration sector. In China, remote areas are often rich in wind and coal; this remoteness poses challenges related to coal transportation as well as power transmission, but offers opportunities for synergetic energy utilization.

An example of a potential solution to using remote resources, including clean energy, is taking advantage of synergy between wind power and methanol production. The basis of such a concept is to use off-grid wind power to carry out electrolysis of water (i.e., breaking down water molecules to produce oxygen and hydrogen). The oxygen can be supplied to a gasifier and the hydrogen can be added to carbon-rich syngas produced by a coal gasifier. The ratio of H2 to CO can thus be adjusted to the appropriate level for methanol production. Compared to conventional coal-based methanol production systems, this integrated system eliminates the need for an expensive and energy-intensive air separation unit, which greatly reduces the amount of gas conversion. With the same amount of coal, the synergetic solution produces twice the amount of methanol. Most of the carbon molecules from the coal are used in the methanol products, thus significantly reducing CO2 emissions and thereby achieving the best overall results in the use of energy and resources. This is an example of a solution for the problems of wind energy application and that of substantial CO2 emissions.

Recently, many large cities have been eager to obtain more clean energy, leading many areas that are rich in coal resources (particularly the remote areas of Xinjiang in Western China) and large corporations to turn their attention to a new industrial chain for synthetic natural gas (SNG). Although the energy efficiency of converting coal to SNG is only about 60%, long gas pipelines are more efficient than transporting coal over long distances. In terms of end application, since it is a clean, gaseous fuel, it can be used in a variety of advanced energy systems, technologies, and equipment (such as distributed energy and combined heating, cooling, and power production) for more efficient applications. In this way, the full industry chain may reap the benefits of improved overall energy efficiency and reduced CO2 emissions. However, the key issue regarding the emission and treatment of CO2 generated from converting coal to SNG remains. Similar to the example with the methanol plant, if wind can be used to produce the oxygen and hydrogen from the electrolysis of water, the amount of SNG produced per unit coal could be multiplied, thus significantly reducing CO2 emissions.

Looking at the energy system as a whole, this type of synergy is worth in-depth research to resolve issues surrounding essential technical questions. Testing should take place as soon as possible, and from there, demonstration and deployment should be promoted to minimize the end cost of meeting energy security, energy efficiency, and environmental objectives.

CO2 Emission Reductions from the Coal-to-Chemicals Industry

China should pave its own way according to the country’s actual situation and reconsider how to reduce its CO2 emissions in phases from this point forward. China is currently making great efforts to develop the coal-to-chemicals sector (e.g., methanol, dimethyl ether, methanol-to-olefins [MTO], methanol-to-propylene [MTP], direct coal liquefaction, and indirect coal liquefaction). The CO2 released during these processes is already highly concentrated and pressurized and today most of this capture-ready CO2 is released directly into the atmosphere. China emits more than 40 million tonnes of CO2 from methanol production alone. Therefore, reducing CO2 emissions in China should begin with the coal-to-chemicals sector. We believe China should establish supportive policies such as carbon taxes and subsidies, and gain experience in CO2 capture from this process (chemical and physical applications, transportation, storage, etc.). The knowledge gained from studying CO2 emissions reductions in China’s coal-to-chemicals sector could be directly applied to polygeneration systems.


Considering the future of cleaner energy in China, coal-fueled polygeneration as a product should be demonstrated, with gradual advancement toward large-scale development, after which CCUS should be implemented according to CO2 reduction requirements.

As explained, collecting CO2 from conventional power plant flue gas requires a tremendous amount of energy resources and investment. We believe China must also conduct research and small-scale demos in this area, but further observation is needed before large-scale commercial implementation.

Coal will remain a driving force in China’s future energy mix. It is difficult to find suitable alternatives. Through the gasification of coal (or petroleum coke) and subsequent chemical synthesis, the polygeneration of electricity, liquid fuels, chemicals for products, heating, syngas, etc., can be achieved. In addition, synergetic integration of coal with renewable energy can help to meet overall energy requirements, alleviate liquid fuel shortages, and reduce coal combustion emissions and other energy-related issues simultaneously. From a technical perspective, polygeneration has been demonstrated, including the economic benefits and environmental capabilities, and thus carries great strategic significance for China and the world.



  1. Ministry of Land and Resources. (2011). Dynamic evaluation of national oil and gas resources 2010. (In Chinese)
  2. Meinshausen, M., et al. (2009). Greenhouse-gas emission targets for limiting global warming to 2°C. Nature, 458 (7242), 1158–1162.
  3. Ni, W., & Li, Z.  (2011). Polygeneration energy systems based on coal gasification. [Monograph]. Tsinghua University Press.
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