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1ADecisionModelforEnergyResourceSelectioninChinaBingWang1,2,DundarF.Kocaoglu1,DaimU.Tugrul1*,JitingYang11PortlandStateUniversity,Dept.ofEngineeringandTechnologyManagement,Portland,OR97207-0751USA2NetworkEducationSchool,BeijingUniversityofPosts&Telecommunications,Beijing,100088,ChinaAbstractThispaperevaluatescoal,petroleum,naturalgas,nuclearenergyandrenewableenergyresourcesasenergyalternativesforChinathroughuseofahierarchicaldecisionmodel.Theresultsindicatethatalthoughcoalisstillthemajorpreferredenergyalternative,itisfollowedcloselybyrenewableenergy.Thesensitivityanalysisindicatesthatthemostcriticalcriterionforenergyselectionisthecurrentenergyinfrastructure.Ahierarchicaldecisionmodelisused,andexpertjudgmentsarequantified,toevaluatethealternatives.Criteriausedfortheevaluationsareavailability,currentenergyinfrastructure,price,safety,environmentalimpactsandsocialimpacts.*Correspondingauthortugrul@etm.pdx.edu;(503)7254582(phone);(503)7254667(fax)Keywords:Evaluation,HierarchicalDecisionModel,China,EnergyAlternatives1.IntroductionandBackgroundThispaperreviewsChina’senergyalternatives,whichincludecoal,petroleum,naturalgas,nuclearenergyandrenewableenergy.Hierarchicaldecisionmodeling(HDM)withsensitivityanalysis(SA)isusedforratingandselectingenergyresources(ChenandKocaoglu,2008).HDM,developedbyKocaoglu(1983),isbasedonthesameconceptasAHP(Saaty,1980)butusesdifferentpairwisecomparisonscalesandjudgmentquantificationtechniques.ChenandKocaoglu(2008)developedacomprehensivealgorithmtoanalyzethesensitivityofhierarchicaldecisionmodels,includingallvariantsoftheanalytichierarchyprocess,tosingleandmultiplechangesinthelocalcontribution2matricesatanylevelofthedecisionhierarchy.GholamnedzahandSaaty(1982)usedanAHPmodelforevaluationofdifferentenergysourcesfortheUnitedStates.TheauthorsofthispaperusethesameconcepttodevelopanenergymodelforChinaandextenditbyusingtheHDMSAalgorithmforfurtheranalysisofChina’sdynamicresourcecircumstances.SimilarbutlimitedandbasicmodelsweredevelopedinGreeceandKorea(Leeetal..,2007,2008a,b;Chatzimouratidisetal..,2007,2008).ThehierarchicaldecisionmodelusedinthispaperforChina’senergyresourceselectionisdepictedinFigure1.Figure1.TheHierarchicalDecisionModelforEnergyResourceSelectioninChina.Thelogicofthismodelisexplainedinthemethodologysection.TheCentralGovernmentofChinapublishedacomprehensiveprogramonenergysavingsandemissioneliminationonJune3,2007(XinhuaNewsAgency).Thisprogrampointedoutthat,“TheenergyconsumptionfortheGDPofevery10,000RMBwillbereducedfrom122milliontce(tonsofcoalequivalent)tolessthan100milliontce,whichisequalabouta20%reduction.Themainpollutingemissionwillbedecreasedby10%,whichmeansthattheemissionofSO2willbereducedfrom25.49milliontonsin2005to22.95milliontonsin2010.Chemicaloxygendemandwillbereducedfrom14.14tonsto12.73tons.Thetreatmentrateofdomesticsewagewon’tbelessthan70%.EnergyResourcesSelectionSafetyEnvironmentalImpactPriceAvailabilityAvailabilityCurrentEnergyInfrastructureSocialImpactsCoalPetroleumNaturalGasNuclearEnergyRenewableEnergyMissionCriteriaSubcriteriaAlternatives3Thecomprehensiveutilizationrateofindustrialsolidwastewillbeabove60%.”SeveralstudieshighlighttheenergychallengesandneedforevaluationofrenewableenergysourcesasalternativesforenergyinChina(Zhaoetal.,2009;Yuetal..,2009;Yang,2009;Yuanetal..,2009;Andrews-Speed,2009).Althoughasignificantnumberofstudiesexplorethesechallenges,priorstudieseitheridentifiedthechallengesthatChinaisfacingregardingpoliciesaroundrenewableenergy(Wangetal..,2009)orperformedsingledimensionalanalysessuchaslookingatCO2emissions(Zhidong,2009).Shen’s(2004)researchforecastsenergyconsumption,analyzesseveralelementsrelatedtoenergyproductionandconsumptionstructure,andmakespolicysuggestionsforenergydevelopmentinChina.Itanalyzesenergystorage,productionandconsumptioninChinasystematically.Coalrepresentsalmost67%oftheenergyconsumptioninChina.Petroleumisbelow25%,naturalgas2.7%,hydroelectric5.6%,andnuclearelectric0.6%.Thisconsumptionstructurehasobviousdifferenceswiththeenergyconsumptionstructureoftherestoftheworld.AccordingtotheYearbookofChineseStatistics2007publishedbytheNationalBureauofStatisticsofChina,theenergyproductionstructureofChinain2006isasshowninTable1.Accordingtothesamesource,from1978to2006theproportionofcoalenergyproductionincreasedby9%,theproportionofoilenergyproductiondecreasedby50%,naturalgasenergyproportionincreasedby21%,andtheproportionofnuclear/hydro/windenergyincreasedby155%.ThereasonforthechangeintheenergystructureisthatChinahasanabundanceofcoal,butarelativelylessamountofpetroleumandnaturalgas.Chinaisalsotryingtoimprovetheportionofrenewableenergyresourcesandnuclearenergy.Table1TheProductionStructureofChina’sEnergy(2006)EnergyGrossProduction(in10thousandstce)CoalOilNaturalGasHydroNuclearWindEnergy2210.5676.7%11.9%3.5%7.9%2.ResearchMethodologyInviewoftheenvironmentalconcerns,Chinamustreconsidertheselectionofenergyresources.ThemainquestioniswhichenergytypesChinashouldinvestinforgainingthebestutility?Theevaluationoftheenergyresourcealternativeswillbeacriticalissue.Hi