Green Hops: Cold Snap, Renewables Boost, Water Woes

A news round up of energy and environment news in China over the past 4 weeks or so, sans analysis.

Avalanche

Northern China was swept with a harsh cold snap that over northern China over the weekend.  Beijing, for its part, experienced its largest snowfall in six decades, a lowest temperatures in four decades (at minus 16 degrees Centigrade!!!).  The cold surge has created an unwelcome spike in energy demand at a time where energy demand is already taking on an upward trend as the national economy shows signs of recovering lost ground.  The heavy snow has also disrupted food transportation logistics, creating a squeeze in vegetable supply in urban centers and upward pressure on food prices.  The only consolation out of this white mess is that Beijing meteorological authorities have publicly acknowledged that climate change may be the cause of such extreme weather events, providing further testimony that the Chinese bureaucracy really “gets it” when it comes to the urgency of the climate issue.

Renewables

The Standing Committee of the National People’s Congress has approved an amendment to the Renewable Energy Law of 2006 that clarifies rules, already in existence in the original 2006 law, that require grid companies to purchase all the power produced by renewable energy generators. Power enterprises refusing to buy power produced by renewable energy generators would be fined up to an amount double that of the economic loss of the renewable energy company. The amended law also clarifies how renewable energy projects will be financed by requiring the government to set up a special fund to be managed by the State Council for renewable energy research, financing of rural clean energy projects, building of independent power systems in remote areas and islands, and building of information networks to exploit renewable energy.  A good Chinese piece that elaborates on the nuances of the amendments can be found here.  The full text of the amended renewable energy law in Chinese is available here.

The National Development and Reform Commission (NDRC) has released a detailed list of renewable energy projects receiving government subsidies in the first half of 2009.

China has climbed up the wind installation rankings one position surpassing Spain.  After adding about 8 GW of installed capacity in 2009, its approximately 20 GW now ranks it third in the world (Chinese only) behind the United States and Germany.

Seambiotic, an Israeli developer and grower of marine microalgae for the nutraceuticals and biofuel industries using flue gas from electric power plants, has partnered with two subsidiaries of China Guodian Corporation to establish a Chinese joint venture for the commercial cultivation of microalgae.  The first of several commercial farms will be 12 hectares in size and is expected to cost $10 million.  The farm will be situated in Penglai, utilizing carbon dioxide from the Penglai power station; it is planned to become operational during 2010.

Water Woes

Beijing residential water prices will be hiked from 3.7 RMB/cubic meter to 4 RMB/cubic meter, while water resource fees and sewage treatment fees will rise by 0.16 and 0.14 RMB respectively.  In the past month, two important reports on water have been released.  One by McKinsey earlier this month that looks at .  Another report by Hong Kong-based Civic Exchange looks at the water security challenges of the Pearl River Delta region, and warns thats water solutions must move away from supply-side only management to “total water management.”

Shifting away from water supply to the other end of the pipe–water treatment–the situation is not better.  A senior official from the NDRC recently observed that one in four Chinese cities and seven out of 10 counties are without a sewage-treatment plant; not a good predicament when you are both the world’s biggest discharger of wastewater as well as the one with the fastest-growing discharge levels.  Low fees for water treatment that do not create the incentives for investment in water treatment facilities is cited as the reason:

The residential wastewater treatment fee in 36 major cities was only 0.7 yuan per cubic meter, on average, as of 2008, less than the national average cost of 1.1 yuan, not including the cost for pipe construction and sludge disposal, according to Cao Changqing, head of the NDRC’s Department of Pricing. He suggested that the situation has restricted the development of the wastewater-treatment industry.

A diesel spill from a rupture pipeline belonging to state-owned China National  Petroleum Corp contaminated two tributaries to the Yellow River.  Besides affecting drinking water supply, it disrupted hydropower production as well.

Island Protection

An island protection law is in the cards.  The Standing Committee of the National People’s Congress endorsed a law that will protect coastal ecosystems of China’s 17,000 islands and small isles by limiting coastal reclamation to quarry stone or sand, construction projects, tree felling, tourism activities and activities that threaten coral reefs. The State Oceanic Administration would be in charge of implementing and enforcing this law.

Macro-Policies

Alternative energy will be listed as a “key industry” listed in the Twelfth Five-Year Plan (2011 to 2015) for economic development, according to an official from the Ministry of Industry and Information Technology.  In addition, the following six areas will serve as focal points of environmental protection expenditures by the central government in the Twelfth Five-year plan, according to Assistant Finance Minister Zhu Guangyao:

1.  industrial restructuring, elimination of backward production capacity, particularly the closure of small cement plants, small paper mills, small steel plants high-polluting enterprises.
2.
Supporting enterprises to carry out greater efforts in energy-saving and pollution control.
3.  S
upporting the development of new and renewable energy, including in rural areas the use of biogas and biomass energy.
4.  Strengthening the construction of ecological economy, especially the “three rivers” and “three lakes” of pollution control projects.
5.  Speeding up the construction of pollution monitoring center, including monitoring mechanisms, monitoring systems, strengthening of capacity-building.
6.  Promoting grasslands and the ecological environment restoration.

Notably, Mr. Zhu referenced environmental taxation as an important source of revenue to finance these efforts, although he acknowleged that the implementation of such taxes  is still some time off.

The National Bureau of Statistics revised China’s 2008 GDP growth by 0.6 percentage points to 9.6 percent.  One of the implications of such a revision is that is that energy intensity (i.e. energy consumed per unit of GDP produced) reductions declined by 5.2 percent, significantly more than the previously-reported 4.6 percent.  This increases the odds that China will hit is 2010 target of a 20 percent reduction in energy intensity from 2005 levels.

Autos

The central government is mulling new government procurement policies to increase the proportion of Chinese-made vehicles purchased by governments to more than half.  While a cynic may deem this to be no more than a protectionist move, this in effect represents a positive gain for overall fleet fuel efficiency given that domestic makers tend to make smaller, more efficient cars.

But how much of an environmental gain to efficient cars get when the absolute numbers of cars just go up, up and up.  Case in point–Beijing, which now reportedly has  4 million cars.   To put that figure in context, consider that:

It wasn’t until 1997 that the number of vehicles finally reached 1 million.  Then it took five years to hit the 2-million mark in 2003 – two years after China’s accession to the World Trade Organization. Four years later, it hit 3 million. Now, after just two short years, the number has breached 4 million.

Meanwhile, Chana Auto has apparently released China’s first pure-electric vehicle.

http://www.china5e.com/show.php?contentid=67042

Rail

The rapacious growth in automobiles call for an urgent need for public mass transit–Cities are responding, with 22 of them just garnering approval to build subway lines for a total investment of 882 billion yuan ($129 billion).

The world’s fastest land journey (peaking at 394 km/h) openeed, linking Wuhan to Guangdong with 1068 km of high speed rail.

Trees

As part of its commitments to combat climate change, China pledged to  China’s domestic forestry activities have often been lauded.  In recent months, they announced they would increase forest coverage by another 40 million hectares by 2020.  They also claim that tree-planiting efforts from 1980 to 2005 have resulted in a sequestration of carbon dioxide emissions equivalent to 5 billion tons, and have reportedly met their national 20 percent forest coverage by 2010 target ahead of schedule.  But what is often glossed over in this litany of domestic successes is the culpability of China’s timber industry for illegal logging overseas.e

China’s State Forestry Administration will initiate a pilot project with a group of companies to verify whether its timber products have been logged legally. The new system, once established, will verify imports from China’s major timber importing countries that include Russia, countries in Africa and Southeast Asia, as well as those in South America.

Coal

A new record for efficiency in the thermal combustion of coal has been established, with Shanghai WaiGaoQiao Power Company  claiming that its largest plant in Shanghai achieved an efficiency of 282 grams of coal combuster per kilowatt-hour of power produced (Chinese only), beating the previous record set in 2008 of 287 g/kwh.  To put these numbers in context, the national average is 339 g/kwh, and the world average is 330 g/kwh, while some of the more advances ultra-supercritical power plants achieve an efficiency of 300 g/kwh.

In another move to enhance coal security, China appears to have lowered import tariffs on coal.  Not exactly a move that will facilitate a move away from a coal-dominated energy structure.  However, this would be somewhat offset by a 5 to 10% increase in domestic coal prices (Chinese only) as part of the NDRC’s ongoing efforts to phase in electricity price reform.

LNG

A $40 billion LNG supply deal between Australia’s Woodside and PetroChina fell through as a deadline to reach agreement on further cooperation came and went without agreement.  This setback was offset by the opening of a Central Asia-China natural gas pipeline.  But China still wants more LNG, remarked (Chinese only) Zhang Guobao, chief of the National Energy Administration.

Grid

China’s State Grid will invest at least 200 billion yuan ($29.4 billion) in 2010 alone (Chinese only) on building out grid infrastructure.  Over the next twenty years, State Grid may invest 400 billion yuan ($59 billion) (Chinese only) as part of its three-stage plan to build national smart grid. Meanwhile, China continues to make world-leading advances in the high voltage transmission sector.  A 1300 km high voltage DC transmission grid wire from Yunnan to Guangdong provinces in Southern China was successfully stepped up from 0 to 800kv (Chinese only) by China Southern Grid Company.

Over the course of 2009, the State Grid company completed 11successful tests on 1,000 kv ultra-high voltage AC lines (Chinese only) for a total “live time” of 143 days.

The State Grid is in talks with Duke Energy of North Carolina to team up to build high voltage transmission lines in the United States.

Energy Tragedies

The ugly side of energy development continues to plague China.   There are a few more coal mining disasters to report–the ones I came across are in Shanxi, Yunnan and Hunan.  In Guangdong, a battery plant was shut after it was found that 40 children in surrounding areas had high levels of lead in their blood.  Remarkably, a battery plant in Jiangsu province was also closed when 51 children were found with excessive blood lead levels.

Photo Credit:  Xinhua via People’s Daily

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