For a country with so many place names referring to ancient hot springs, China has not really exploited its geothermal energy. Hydro, wind and solar power are the renewable sources of energy that have got the attention and investment, and in solar’s case the hype. Geothermal heat pumps were installed at some of the venues at the 2008 Beijing Olympics, part of showcasing of China’s emerging green technologies, but otherwise a few geothermal plants on the Tibetan plateau providing electricity for Lhasa (the largest of which, at Yangbajain, is seen in the photograph above) and a handful of small urban district heating systems elsewhere in the country are about it.
China has just 26 megaWatts of installed geothermal capacity. It has 45 gigaWatts of installed wind power. To understand how tiny a slither of China’s energy production geothermal represents, consider that less than one-tenth of one percent of China’s energy needs are met by solar and geothermal power, and solar has almost 40 times as much installed capacity as geothermal.
Such is Beijing’s desire to develop green technologies to meet both the country’s voracious demands for evermore energy and such is its aspiration to create a low-carbon economy weaned off polluting coal and imported oil, that even the most hitherto neglected renewable energy sources are being reexamined. Geothermal is a cheap, clean and efficient source of renewable energy, though the initial investment required is high. China also has an abundance of it. Its 12 geothermal basins are estimated to contain the equivalent of 853 billion tonnes of coal, according to the Ministry of Land and Resources.
China has increased the growth targets under the current five year plan for all its sources of renewable energy since the Fukushima nuclear disaster in Japan and consequent pause in its own nuclear-power development. It now aims to quadruple its geothermal energy capacity to 100 megaWatts by 2015, up from an original target of 60 megaWatts. Guan Fengjun, director of the ministry’s Department of Geological Environment, reckons that by then the use of geothermal power will supply 1.7% of China’s electric power generation and save 69 million tonnes of coal from having to be dug out of the ground. A commensurate amount of pollution will be kept out of the air.
To hit that target, the most populous nation on earth is turning for help to one of the smallest. Iceland has long experience with geothermal and the best geothermal engineers and technology. It first generated electricity from geothermal shortly after World War 1 and started using it to replace coal and oil for space and water heating after World War II. Geothermal now meets more than half of Iceland’s total power needs (hydro supplies virtually all of the rest). It heats nine out of ten Icelandic homes. Iceland’s capital, Reykjavik, keeps its streets free of ice and snow year round using geothermal heated water piped under the pavement. The country’s farmers grow tomatoes, bananas and other fruits barely 200 miles from the Arctic Circle in geothermal heated greenhouses.
China wants to use that expertise to develop large-scale district heating systems of its own. These would provide residential and commercial users with cheap, clean and efficient centralized space and water heating. Low temperature geothermal energy, suitable for direct use such as space heating and in industrial and agricultural processing such as fish farming and greenhouse market gardening, is spread widely across the country. The higher temperature basins required for electric power generation are concentrated in Tibet, Yunnan and Guangdong. The lower temperature basins are the shallower of the two and thus cheaper and easier to drill.
Five years ago, Enex China, a joint venture of three Icelandic firms, started pilot district space heating projects in Xianyang in Shaanxi and in Baoding in Hebei. Last year, Geysir Green Engergy (GGE), a private equity firm, struck a five year, $10 billion dollar deal with Sinopec Star Petroleum Co., a subsidiary of the state-owned energy giant, to enhance those projects and develop new ones in Beijing and Tianjin. One of the first fruits of that came in August when Enex China, in which GGE is a shareholder, and its local Chinese partner, Shaanxi Geothermal Energy Development Corp. (CGCO), committed a further $50 million of investment in Xianyang. The Xian satellite town is becoming the poster child for China’s geothermal push, and has been dubbed the ‘Reykjavik of the East’. The plan is to make it the world’s biggest geothermal district heating system, serving 500,000 people.
Geothermal drilling and pumping requires specific technical expertise. China has started sending engineers to Iceland to study the technology. It has already sent more students than any other country to attend a course on geothermal energy that the U.N. has run in Iceland for 30 years.
Ragnar Baldursson, the deputy head of mission at Iceland’s embassy in Beijing, says he hopes the cooperation between the two countries will eventually blossom in to joint Icelandic-Chinese export projects. (He expands on this and Iceland’s geothermal assistance to China more broadly in this TV interview.) Icelandic geothermal firms are already undertaking projects in India, East Africa, Central America, the U.S. and Europe. China’s capital could open more doors for them where Chinese state-owned enterprises already have a foothold.
Beijing makes no secret of the fact that it turned to renewable energy not only out of a desire to improve its environment and increase its energy security but also to gain global market share in green technologies, which it has designated as one of its nationally championed industries. China’s massive domestic market gives its companies a head start. They already have global leadership in wind and solar and are a growing force in hydro. No reason that they shouldn’t follow suit in geothermal.
Footnote: Baldursson is a Sinofile who has translated the Analects of Confucius into Icelandic and is working on a translation of Daodejing, the core text of Taoism. As a philosophy student at Beijing University in the 1970s he was a fellow student of Huang Nubo, the Chinese real estate developer who is seeking to develop a controversial luxury eco-resort in northeast Iceland. Earlier this year the two trekked to the North Pole. Hjorleifur Sveinbjornsson, another fellow student at Beijing University, husband of a former Icelandic foreign minister and now Huang’s representative in Iceland, was also on the trip. Before taking up his post in Beijing, Baldursson was his country’s senior Arctic official at the Arctic Council. China also has interests in proposed Arctic shipping lanes that would cross the North Pole to connect the Pacific and North Atlantic, opening a direct sea lane between China and Western Europe–and significantly enhancing Iceland’s position as strategic partner for Beijing.