By Julian Wong Jan.22.2013
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Green Hops: Aniline Spill; 50 GW Renewables Target; Nukes Resume

“Green Hops,” our periodic newsy updates of energy and environmental developments concerning China resumes.  Anora Wang and Jenny Tang contributed research and summaries to this edition.

Hundreds of workers were mobilized to clean up an aniline-affected site in Shanxi province on Jan. 8.
Source: China.org.cn

In this edition:
1. WATER: Aniline leak in Shanxi on Dec. 31 affects neighboring province.
2. ENERGY POLICY:    National Energy Conference targets almost 50GW of renewables to be added in 2013
3. AIR: National policy to scale up coal-fired plant denitrification tariff
4. COAL:  Eradication of coal-electricity dual-pricing system affects market
5. NUCLEAR: China resumes nuclear ambitions with “fourth generation” technology
6. SOLAR: Chinese Gov Vows $2B in subsidies as Overcapacity Plagues Industry
7. NATURAL GAS: Conoco Hunts for Shale Gas in China
8. NATURAL GAS:  More reserves found as successful exploration tenders announced
9. INVESTMENT: Brazil Taps China’s State Grid for Energy Project
10. GRID: China’s Electrical Grid Freeze UP
11. WATER: Danjiakou City economy suffering due to water pollution control
12. WATER: Beijing Tap Water getting worse, Expert says
13. WATER: Nestle Taps China Water Thirst as West Spurns Plastic
14. GOVERNANCE:  88 Environmental impact assessment agencies penalized by MEP
15. RAIL:  NDRC approves 840 bln yuan in metro lines
16. CARBON EMISSIONS:  Carbon intensity drops 3.5% in 2012; but 2011 witnessed record level emissions in first ever GHG bulletin

1. WATER: Aniline leak in Shanxi on Dec. 31 affects neighboring province.
The other big pollution story in the past month aside from “airpocalypse” concerned a chemical plant in Changzhi Cit, Shanxi Province that was reported to have leaked 38.7 tons of aniline into Zhanghe River (漳河) from a broken industrial pipeline on January 5th.  The leak was believed to have begun no later than Dec. 31 when workers discovered the situation.  Leaked aniline traveled along the Zhanghe River and reached reservoirs in neighboring cities including Handan, a city in Hebei Province with over 1 million residents.  Handan shut down part of its municipal water supply system on Jan. 5th and at least 15% of city population was still under impact on Jan. 6th.  Areas in Henan Province were also affected, as Zhanghe River is a tri-provincial major stream that flows through Shanxi, Hebei, and Henan.  30 tons of aniline were contained at nearby reservoirs after the leak was reported. [People's Daily] [Xinhua] [China.org.cn] [Sina English]

2. ENERGY POLICY:    National Energy Conference targets almost 50GW of renewables to be added in 2013
On January 7 and 8, a National Energy Conference hosted by the National Energy Administration (NEA) was held at Beijing setting national energy policy and development targets for the year of 2013.  Directors of the National Reform & Development Committee (NRDC) and NEA spoke at the conference and set policy directions in eight aspects: (1)    To increase domestic energy supply and to ensure overall stable energy supply throughout the year by promoting coal, shale gas, coal bed methane, and/or other unconventional oil and gas resources; (2) to develop new and renewable energy, and to install additional 21GW of hydropower, 18GW of wind and 10GW of solar photovoltaics, all this year; (3) to control total energy consumption by establishing long-term mechanism to adjust consumption structure; (4) to strengthen energy technological innovation, and to promote localization of key equipment manufacturing through major national scientific and technology projects; (5) to deepen reforms of national energy institutions, and to materialize the top-down, overarching planning of reforms with a clear roadmap, timetable, and overall reform scheme; (6) to promote international energy cooperation and actively participate in global energy governance; (7) to accelerate implementation of energy projects concerning public well-being, particularly people with little access to electricity; and (8)  to improve management of the energy sector in implementing energy planning, formulating industry policies, laws, and standards. [Gov.cn] [Xinhua] [China5e]

3. AIR: National policy to scale up coal-fired plant denitrification tariff
NRDC recently announced policy to scale-up its coal-fired denitration subsidy pilot program.   All coal-fired generating units nation-wide will receive a 8 yuan subsidy  for every 1000 Kwh of generation capacity in which they implement denitrification treatment processes.  The  pilot policy was originally implemented in fourteen provinces including Beijing, Shanghai, Gansu and Ningxia since November 2011 and eligible coal-fire units were subsidized at the same rate.  Statistics show that national nitrogen oxides emission decreased 0.24% in the first six months of 2012 (on year-on-year basis); average denitrification efficiency reached 40.3% and increased 16.1% comparing to 2010.
[Ditan360.com]

4. COAL:  Eradication of coal-electricity dual-pricing system affects market
State Council announced in the last week of 2012 that coal-electricity “dual-pricing system” would be phased out starting Jan. 1, 2013.  Coal-fired plants may not purchase coal at a favorable price pre-negotiated at beginning of each year through government mediated fixed price contracts, but will instead have to turn to the open market to purchase coal.  The discontinuation of the decade-old macro-control policy is consistent with the governments general push towards the “marketization” of the energy economy and is expected to have a significant impact in a market that previously saw up to 60% of coal-fired power run on coal procured through negotiated fixed contracts.  [State Council] [Reuters CN] [Time-Weekly] [China5e]

Schematic of planed HTGR nuclear units. Source: HazardEx)

5. NUCLEAR: China resumes nuclear ambitions with “fourth generation” technology
After a 20-month “freeze” period of nuclear construction in China, multiple nuclear power projects resumed along the east coast.  The State Council in November 2012 officially cleared the pause of nuclear, which is partially in response to the 2011 triple meltdown tragedy of Fukushima.  Shortly after the green light, a $475 million nuclear project by Huaneng that will be the world’s first commercial nuclear power plant with fourth generation features was announced. Located in Shidao Bay in the city of Rongcheng, Shandong province, the builder Shandong Shidao Bay Nuclear Power designed the 200 MW high temperature gas cooled reactor (HTGR) demonstration plant with the ability to automatically shut down in dangerous situations without danger to the core (also known as “passive nuclear safety”).   Some of its other benefits include lower outlet temperature, and higher generation efficiency compared to other reactors. The launching of this plant was originally scheduled for 2011, however public panic from the Fukushima plant that March delayed the procedures.   Nuclear projects in Jiangsu, Guangdong and Fujian have also resumed while the State Nuclear Power Technology Company (SNPTC) anticipates additional 5 GW of additional AP1000 third-generation pressurized water reactor nuclear power units to be installed.[People's Daily] [Xinhua English] [Xinhua Chinese]

6. SOLAR: Chinese Gov Vows $2B in subsidies as Overcapacity Plagues Industry
In December 2012, China’s Ministry of Finance has allocated an additional 7 billion RMB ($1.1 billion) to subsidize solar projects. This sum likely includes 1.82 million RMB of subsidies for 126 rooftop solar projects announced separately.  Combined with the 6 billion RMB given during the first half of 2012, a total of $2 billion has been given to generate 5.2 GW of solar energy. [Forbes] [China Daily]  The subsidy announcements coincide with the rampant overcapacity throughout the PV supply chain that has forced over 350 companies in China to completely stop operating last year.  While in 2011 there is a significant new influx of companies caused the number of Solar PV related companies to increase from 807 to 907, in 2012 nearly 300 of those companies declared bankruptcy, reducing the number to 704. In addition, 180 manufacturers organization are going dormant until supply and demand dynamics are rebalanced, leaving there to be only 524 manufacturers that are currently operating.  [PV Tech]

7. NATURAL GAS: Conoco Hunts for Shale Gas in China
In December ConocoPhillips signed an agreement with China Petrochemical Corp (Sinopec) to study shale gas exploration in the Sichuan Basin. This is the third official international oil company into China’s Shale-gas industry, following Royal Dutch Shell signing with PetroChina in 2009 and Chevron with Sinopec in 2011. With the Chinese government hoping to rapidly increase its shale-gas output, ConocoPhillips will drill two wells in a 3,900 square-kilometer area in the Qijiang Block in southwestern Sichuan province. No financial details were disclosed. [Wall Street Journal]

8. NATURAL GAS:  More reserves found as successful exploration tenders announced
Results of the second round of bidding on coal bed methane exploration rights are also published and successful tenders will soon be finalized in deals with Ministry of Land and Resources [China5e].  Just as well, because another 25 trillion cubic meters of exploitable shale gas has been located at Sichuan, Xinjiang, Chongqing, Guizhou, Hubei, Hunan, and Shaanxi [China5e].

9. INVESTMENT: Brazil Taps China’s State Grid for Energy Project
State Grid Corp. of China was chosen by the Brazilian government to build a 91- million reais ($438 million) power transmission project that calls for roughly a total of 9,931 kilometers, or 6,170 miles, of transmission lines. The longest single transmission line is planned to span 967 kilometers, or 600 miles. State Grid has been eyeing Brazil as a market because of its higher returns compared to similar projects done in China, which is highly regulated. The company hopes to at least quadruple its overseas assets from $8 billion to $30 billion by 2020. The chief executive, Cai Hongxian, plan to invest $5 billion in Brazil over the next five years with a main focus on transmission and generation.  [Wall Street Journal]

10. GRID: China’s electrical grid freeze up
The coldest winter in 28 years froze up some parts of the power grid in Southern China, but the overall electricity supply remains unaffected, says State Electricity Regulatory Commission.  The frozen grid occurred mostly in Hunan and Jiangxi provinces, Chongqing Municipality, Guanxi Zhuang Autonomous Region, Yunnan and Guizhou Province. In January 5th,  155 transmission lines operated by State Grid Corporation has been frozen and by January 6th, 199 power lines have been covered in ice.  [Powergrid International]

11. WATER: Danjiakou City economy suffering due to water pollution control
The Danjiankou Reservoir and its headwaters are affected by the world’s largest water diversion project that is designed to transfer relatively clean water from the Han River—a tributary of the Yantze River—downstream to the northern regions. This headwater region spans some of the poorest counties and cities in China and influences a population of about 10 million. Pollution control has shut down about 1,000 polluting firms, which results in tens of thousands of people losing their jobs due to environmental protection. Danjiankou city, for example, had its economic ranking drop from being one of the top 20 to 41st after factories were shut down and citizens were forced to emigrate.  [Xinhua]

12. WATER: Beijing tap water getting worse, watchgroup says
While Beijing Waterworks Group, the organization that is responsible for the water supply  insists that that tap water is safe and meets the national water quality standard, although it acknowledges and agrees with the Beijing Healthcare Association agree on is that “the city’s water has gotten more polluted in recent years.” Recently, the amount of nitrate has risen from 2mg/L to 5mg/L in over a period of six years.  In addition, reservoirs that used to be a drinking water source such as the Granting Reservoir are now becoming backup sources due to pollution. [China Daily] [Beijing Waterworks Group]

13. WATER: Nestle taps China water thirst as West spurns plastic
China is a rapidly growing bottled water market, as Nestle’s water business in China grew 27% in 2012. Sale of bottled water in China is projected to climb to $16 billion in 2017 from the $9 billion in 2012. Twelve years ago in 2000, sales totaled t only $1 billion. Currently China is Nestle’s eighth-biggest water market, and head of China’s Nestle Waters Gilles Duc projected that the country is “probably moving up one or two places each year”. About half the water Nestle sells in China are five-gallon (18.9 liter) jugs that are mostly delivered to homes via electric tricycles. Demand will continue to increase as as 7-% of China’s lakes and rivers have been polluted and people no longer rely on boiling as a preferred sanitation method. [Bloomberg]

Protestors hold a flyer that says, “Oppose forgery of environmental impact assessments.” Source: China5e

14. GOVERNANCE:  88 Environmental impact assessment agencies penalized by MEP
On Jan. 5th, Ministry of Environmental Protection (MEP) released a list of 88 environmental impact assessment (EIA) agencies that would be penalized for audit quality, management, staffing, and forgery problems.  Two agencies for forging EIA reports or providing false data were disqualified, another two were ordered to rectify within six months.  Eight agencies including the renowned Chinese Academy of Meteorological Sciences were degraded or mandated to reduce services range for inadequate staffing of EIA professionals.  26 agencies including three universities received warnings for violation of regulations or producing reports of poor quality. [China5e] The penalty from MEP is believed to have reflected the general lack of credibility and public trust of EIA agencies in China [China5e].

15. RAIL:  NDRC approves 840 bln yuan in metro lines
The National Development and Reform Commission has curiously approved 840 billion yuan worth of construction of subway and light rail lines in 23 cities over the last four months, reports Caixin, despite a parallel story from the same publication that the economics of metro lines are not quite panning out.  [Caixin 1] [Caixin 2]

16. CARBON EMISSIONS:  Carbon intensity drops 3.5% in 2012; but 2011 witnessed record level emissions in first every GHG bulletinSu Wei, China’s chief climate negotiator, announced that China’s carbon intensity declined by 3.5% in 2012.  But not so fast – days after Su Wei’s announcement, the China Meteorological Administration (CMA) released the first ever greenhouse gas bulletin that showed 2011 saw a record level of greenhouse gas emissions.  CMA said that 2012 data was not yet available under its bulletin.  [RTCC] [Xinhua]

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