Energy is essential for the development of a city. The energy structure of China, dominated by coal, has caused serious problems, such as resource depletion, environmental pollution, and climate change. These problems have posed severe challenges to the sustainable development of mega—cities such as Shanghai. In order to ensure security of energy supply and alleviate the corresponding environmental pollution, these cities should effectively restructure their energy supply. This paper quantitatively analyzed the future energy consumption demand in Shanghai and its effects on environmental quality based on the MARKAL model with the aim of providing theoretical support for the government decision regarding energy policy, energy technology, adjustment of energy supply structure, etc. Different scenarios have been set up in light of the natural gas distributed supply system, clean and efficient coal-fired power technologies, energy-saving of industrial boilers technologies, Integrated Gasification Combined Cycle (advanced power generation technology), and wind power technologies. The results obtained by the MARKAL model show that total consumption of the whole society energy in Shanghai will reach 143 572 700 tons of standard coal in 2015, and 199 645 800 tons of standard coal in 2020. Thus, the future demand for energy consumption is huge astronomical, with about an average annual growth rate of 4%. The consumption of coal and other primary energy could decline by improving the energy efficiency and increasing renewable energy use, which would reduce pollutants emissions. At the same time, Shanghai should continue research on carbon dioxide emissions technology and its application in response to climate change.

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