Optimization Layout of Coal Production Capacity and Reserve Capacity in China under the "Dual Carbon" Target

Given the characteristics of China's fossil energy resource endowment and the instability of renewable energy, coal has been entrusted with the mission of providing a safety net for energy supply, undertaking the "triple" safety net tasks of covering for fossil energy imports, fluctuations in the output of renewable energy, and unexpected surges in energy consumption. Under the "dual carbon" target, the uncertainties in the total energy demand, the peak shaving demand for renewable energy, and the import of fossil energy have increased, leading to a significant rise in the uncertainty of coal production demand and a substantial increase in the difficulty of ensuring coal supply as a safety net. The 20th National Congress of the Communist Party of China emphasized "actively and steadily advancing carbon peaking and carbon neutrality", which further requires the coal industry to actively adapt to the new changes in coal demand brought about by the systemic transformation of the economy and society under the "dual carbon" target, and to steadily adjust and optimize the capacity and supply mode of coal production to ensure stable and secure energy supply. This has created an even more urgent need for an optimized layout of coal production capacity. However, the direction of the fluctuation in coal production demand under the "dual carbon" target is uncertain. Sometimes, a rapid and significant increase is needed, and at other times, a rapid and significant reduction is required. Not only is it necessary to flexibly optimize the conventional coal production capacity scheduled according to plans, but also to allocate a certain scale of coal reserve capacity that can be adjusted over a wide range at low cost. This reserve capacity can be quickly activated for production when needed and maintained at low cost when not needed, ensuring the dynamic balance between coal supply and demand. Therefore, optimizing the layout of coal production capacity and coal reserve capacity is the primary issue to be addressed in ensuring the role of coal as a safety net under the "dual carbon" target. In response to the new situation of increasing frequency and amplitude of fluctuations in China's coal production demand under the "dual carbon" target, it is required to flexibly optimize conventional coal production capacity and allocate coal reserve capacity of appropriate scale. This paper clarifies the positioning of coal capacity and reserve capacity, and puts forward the optimal layout method of coal capacity and reserve capacity; Based on the principle of minimum cost and maximum growth rate of total factor productivity of provincial coal production capacity optimization, an optimal distribution model of coal production capacity and reserve capacity under dual-carbon target based on multi-objective dynamic programming was constructed. The reliability of the model was tested based on panel data from 1990 to 2020. The model was used to quantify the overall scale demand and regional distribution of coal production capacity and reserve capacity at each time point, aiming to meet the predicted value of coal production demand and fluctuation amplitude during the realization of "dual carbon" target. The results show: 1) The overall demand for coal production capacity exhibits a trend of initial increase followed by a gradual decline, peaking around 2030 at approximately 6,060.2 billion tons per annum (t/a). This figure is projected to decrease to 5,464.8 billion t/a by 2035, further declining to 4,687.7 billion t/a in 2040 and reaching 3,174.3 billion t/a by 2050. By 2060, it is expected to fall further to approximately 2,087.5 billion t/a.; The regional distribution of coal production capacity is transferred and concentrated from the east to the central and western regions, the coal production capacity of Shanxi, Inner Mongolia, Guizhou, Shaanxi and Xinjiang and their proportion in the national total production capacity are as follows: 5,0553 million t/a (83.5%) in 2030, 4,668.7 million t/a (85.5%) in 2035, 4,109.9 million t/a (87.7%) in 2040, 2,899.6 billion t/a (91.4%)in 2050, and in 2060, 1,921.6 billion t/a (92.0%); 2) The demand for the overall scale of coal reserve capacity exhibits a trend of initially increasing and subsequently decreasing, peaking around 2030 at 742.7 million t/a. This figure is projected to decline to 703.4 million t/a by 2035, further decreasing to 674.7 million t/a in 2040, and ultimately reaching 553.2 million t/a by 2050. By 2060, it is expected to decrease further to 438.4 million t/a.; The regional distribution of coal reserve capacity has gradually increased from the east to the central and western regions, the coal reserve capacity and its proportion in the total reserve capacity of Shanxi, Inner Mongolia, Guizhou, Shaanxi and Xinjiang are as follows: 657.1 million t/a (88.5%) in 2030, 627.1 million t/a (89.1%) in 2035, 601.9 million t/a (89.2%) in 2040, 477.1 million t/a (85.1%)in 2050 and in 2060, 379.9 million t/a (86.7%). It is suggested that in the process of steadily advancing the "dual carbon" target, the development order of coal exploitation and utilization should be scientifically regulated, the adjustment rhythm of coal production capacity should be objectively and flexibly grasped to ensure the coal supply needed for economic and social development; the construction of coal reserve capacity should be rationally planned to enhance the flexible supply capacity of coal, so as to ensure the stable and secure supply of national energy. In particular, the construction of coal reserve capacity should be advanced mainly through production reserve coal mines and supplemented by dedicated reserve coal mines. In the main coal production areas in the west and north, reserve capacity should be built through increasing the production capacity of existing mines or building new ones, with enterprises taking on the reserve responsibility and the government providing appropriate compensation. In the central and eastern regions that are net importers of coal, resource-depleted coal mines should be transformed into reserve capacity through intelligent upgrading, with the government as the main responsible party and the operation entrusted to enterprises to address regional and seasonal supply shortages.