Supply-side—demand-side optimization and cost—environment tradeoffs for China's coal and electricity system

Abstract Motivated by 1980s energy shortages, the World Bank and the Chinese State Planning Commission developed a strategic-level, network-based investment-planning model of China's coal and electricity delivery system. Transport investments were optimized alongside alternative investments that reduce transport needs, such as coal washing, minemouth power plants, long-distance transmission and hydro and nuclear power. Later, we enhanced the model by adding investment variables for improving energy efficiency. We found that energy demands in the year 2000 can be satisfied with less cost and pollution than in the supply-side-only results. Multiobjective analysis estimates the national cost of controlling ash and sulfur both with and without energy conservation and/or carbon restrictions. Policy issues for demand-side investments are discussed.