Tag Archives: renewable energy

China Will Rebalance The World’s Energy

Wind turbines in Xinjiang, 2005. Photo credit: Chris Lim. Licenced under Creative Commons

ACROSS THE MORE heavily industrialised provinces, factories and plants are being ordered to shut down or limit production during the winter months. This is both to curtail excess industrial production and also to curb seasonal smog, a byproduct of China being the world’s largest consumer of coal, which provides 65% of its energy.

The newly published annual outlook from the International Energy Agency (IEA) brings a glimmer of a silver lining to that particular dark cloud. China, it says, will remain a ‘towering presence’ in coal markets, but it believes coal use peaked in 2013 and is set to decline by almost 15% over the period to 2040.

China burnt 2.75 billion tonnes of coal in 2013, more than the rest of the world put together.

It is no secret that Beijing sees pollution as a potential political problem and that it is keen for China to go green. Lian Weiliang, deputy head of the National Development and Reform Commission, said earlier this week that the country was ahead of pace in its goal to cut coal capacity by 500 million tonnes within three to five years of 2016, while the Ministry of Industry and Information Technology forecast that environmental protection equipment manufacturing would be a 1 trillion-yuan ($150 billion) industry by 2020.

The new era will be about energy policy where the focus is on electricity, natural gas and cleaner, high-efficiency and digital technologies, not an energy system dominated by coal and a legacy of serious environmental problems, giving rise to almost 2 million premature deaths each year from poor air quality.

The switch will also flow from rebalancing the economy from a development model based on heavy industry, infrastructure development and the export of manufactured goods to one driven by higher-value-added manufacturing, services and domestic consumption.

Signs of the new era are there to be seen. Energy demand growth slowed markedly from an average of 8% per year from 2000 to 2012 to less than 2% per year since 2012. Official plans call for it to slow further to an average of 1% per year to 2040.

Energy efficiency regulation is a large part of the explanation. Without new efficiency measures, the IEA reckons, end-use consumption in 2040 would be 40% higher.

Nonetheless, such is the compounding effect of economic growth that by 2040, per-capita energy consumption in China will exceed that of the European Union and electricity demand for cooling alone in China will exceed the total electricity demand of Japan today.

The IEA reckons that China will need to add the equivalent of today’s United States power system to its electricity infrastructure to meet the demand expected by 2040. Such will be the scale of China’s clean energy deployment, technology exports and outward investment that it will play a huge role in determining global energy trends and in particular provide the momentum behind the low-carbon transition.

“When China changes, everything changes”, as the IEA says.

The agency lays out the future thus:

One-third of the world’s new wind power and solar PV is installed in China … and China also accounts for more than 40% of global investment in electric vehicles. China provides a quarter of the projected rise in global gas demand and its projected imports of 280 billion cubic metres in 2040 are second only to those of the European Union, making China a lynchpin of global gas trade. China overtakes the United States as the largest oil consumer around 2030, and its net imports reach 13 million barrels per day in 2040. But stringent fuel-efficiency measures for cars and trucks, and a shift which sees one-in-four cars being electric by 2040, means that China is no longer the main driving force behind global oil use – demand growth is larger in India post-2025.

China will also continue to lead a gradual rise in nuclear output, overtaking the United States by 2030 to become the largest producer of nuclear-based electricity.

The shift to a more services-oriented economy and a cleaner energy mix will take a decade to have its effects on the skies above. The IEA projects carbon dioxide emissions will plateau at only slightly above current level by 2030 before starting to fall back.

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It Is An Ill Wind That Blow’s China’s Nuclear Industry No Good

CHINA’S STATE-OWNED heavy engineering firms are getting a liking for European renewables. China General Nuclear (CGN) Corp. has beaten out several rivals to acquire a controlling stake in three U.K. wind farms being sold by the French utility EDF.

This follows China Three Gorges Corporation acquisition of wind-generation capacity in Spain and Portugal to add to that it has in Pakistan. The State Administration of Foreign Exchange (SAFE), which also supervises CGN, owns 49% of the portfolio of wind assets belonging to the Norwegian state owned electricity company, Statkraft. This stake is held through SAFE’s U.K. investment arm, Ginko Tree Investment.

CGN, which generates more than half of China’s nuclear energy and was known as the China Guangdong Nuclear Power Group until last year, paid an estimated $157 million for 80% of the three wind farms. EDF will retain the remaining 20% and continue to operate the facilities.

The three farms, all in eastern or north eastern England, are CGN’s first significant acquisition of onshore wind generating capacity outside China. It has a small interest in an Australian wind farm but set up a subsidiary earlier this year to acquire off- and onshore wind farms and solar projects in Europe. The U.K. government runs a subsidy scheme that requires energy utilities to buy a certain amount of electricity generated by renewables, which makes U.K. projects an attractive investment.

The generating capacity that CGN will be acquiring is relatively modest at 72 megawatts, sufficient to serve only 40,000 homes. By way of comparison, the group has installed generating capacity of some 7 gigawatts of solar, hydro and wind power in China plus 11.6 gigawatts of nuclear power.

Not that China’s nuclear companies are turning their back on nuclear despite industry’s post-Fukushima hiatus. CGN has another 3.9 gigawatts of capacity under construction in China and is involved in the negotiations over Hinkley Point C, a new $40 billion nuclear power plant EDF is planning to build in the west of England. That would be the first nuclear power plant built in Britain in a generation. CGN and China National Nuclear Corporation also want to build another nuclear plant in eastern England that would controversially use a Chinese built reactor.

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Hot Springs Eternal: China, Iceland And Geothermal Energy

Yangbajain geothermal power station, Damxung,Tibet, April 18, 2011. Yangbajain, China's largest geothermal power station, has generated 2.5 billion KWs of electricity since it was built in 1977.

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.

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China’s Green Leap Forward

China has a goal of meeting 15% of its energy consumption from non-fossil fuels by 2020, and the five-year plan that starts next year calls for a large expansion of hydropower for electricity generation. The World Bank, in a policy note on the Great Green Leap Forward, says China needs to do four things to hit its goal:

Develop hydropower faster. Hydropower rehabilitation and more rapid and environmentally and socially sound development could achieve the target at a lower cost because hydropower is already competitive with coal. Developing hydropower more quickly would allow for increasing the renewable energy target above the envisaged government target without increasing the incremental cost of the program.

Improve the performance of wind power rapidly. China’s experience has been less than optimal in planning wind farm, operational integration and coordination between developers and grid operators. This considerably reduced the performance of the wind program. If not addressed adequately, the high level of inefficiencies could increase the cost to the nation of the envisaged wind program, which could become prohibitive.

Promote trade. With trade, provinces could achieve their mandated targets. Renewable energy transactions would amount to about 360 terawatt-hours, 42 percent of the total of the envisaged government target. And more important, trade would reduce the discounted cost of the envisaged renewable energy target by about 56-72 percent.

Develop green electricity scheme(s). Green electricity has been well studied in China and piloted in Shanghai municipality. Deploying green electricity schemes at the national and regional levels should be considered among the options to pay for the incremental cost resulting from the development of renewable energy.

All in all, an off-to-a-good start report with some could-do-betters, particularly with wind power, where approaching a third of the power generated is off-grid, and much, much still to be done.

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Bali High

China is a polluted place but getting less so. That according to Germanwatch, a German environment watchdog that releases an annual ranking of the most environmentally friendly industrialized and developing countries.

Its latest annual Climate Change Performance Index, which covers 56 countries that account for 90% of global carbon dioxide emissions and was released at the U.N. conference on climate change now going on in Bali, puts China at 40th, up four places from last year. For the record, the U.S. and Saudi Arabia are at the bottom of the list.

China’s advance up the ranking has caused some surprise. The report’s explanation:

It can be explained by its recently strong domestic and international engagement for renewable energy, the new climate protection regulations in the transport sector and its nowadays relatively constructive role in the UN climate negotiations.

China’s ranking also owes more to promise than performance. It scores highly on the policy-making component in the Index’s methodology, offsetting to some extent the drag of a poor trends score. Beijing has set a target of generating 10% of its energy from renewable sources by 2010, ordered some industries to cut consumption by 20% and is encouraging the countries vast bureaucracy to stop driving gas-guzzling cars. (A breakdown of China’s score is here.)

This is driven in part by old-fashioned concerns of energy security and worsening droughts, floods and air quality, with the internal political fears that raises for the government.

But China is also winning praise at the Bali conference for the constructive role it is playing in contrast to its past stance. It has taken the lead among developing countries in calling for rich nations to speed up the transfer of cleaner technologies to help shift away from fossil fuels, and for developing nations not to have hard emission-cut targets imposed on them.

As a successor to the decade-old Kyoto agreement is taking shape, China is looking the gloablist and the U.S. the obstructionist.

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