Demand for Storage and Import of Natural Gas in China until 2060: Simulation with a Dynamic Model

Zhihua Chen, Hui Wang, Tongxia Li and Ieongcheng Si
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Zhihua Chen: The Belt and Road School, Beijing Normal University, Beijing 100875, China
Hui Wang: The Belt and Road School, Beijing Normal University, Beijing 100875, China
Tongxia Li: The Belt and Road School, Beijing Normal University, Beijing 100875, China
Ieongcheng Si: The Belt and Road School, Beijing Normal University, Beijing 100875, China

Sustainability, 2021, vol. 13, issue 15, 1-19

Abstract: China has been reforming its domestic natural gas market in recent years, while construction of storage systems is lagging behind. As natural gas accounts for an increasing proportion due to the goal of carbon neutrality, large-scale gas storage appears to be necessary to satisfy the needs for gas peak shaving and national strategic security. Additionally, the domestic gas production in China cannot meet consumption demands, and imports will play a significant role on the supply side. This paper developed a system dynamics (SD) model and applied it to simulate gas market behaviors and estimated China’s gas storage capabilities and import demands over the next 40 years. To achieve carbon neutrality, it is necessary for China to make great progress in its energy intensity and improve its energy structure, which have a great impact on natural gas consumption. Thus, alternative scenarios were defined to discuss the changes in the gas market with different gas storage goals and environmental constraints. The results show that under low and medium carbon price scenarios, natural gas demand will continue to grow in the next 40 years, but it will be difficult to achieve the goal of carbon neutrality. Under the high carbon price scenario, natural gas consumption will grow rapidly and reach a peak in approximately 2040, after which renewable energy will play a more important role to help achieve carbon neutrality. At the peak time, China’s gas storage demand will be 205.5 billion cubic meters (bcm) and import demand will reach 635.4 bcm, accounting for 72.8% of total consumption. We also identified the contradiction between the estimated storage capability, import demand and infrastructure planning. There will be a gap of 28.1–69.3 bcm between the planned storage capacity and simulated demand by 2030, while import facilities may partly strand assets. Finally, we provided some policy recommendations for constructing gas storage and import management and operation systems.

Keywords: gas storage and import; gas supply security; system dynamics; carbon neutrality (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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