I was on Worldfocus radio last night with Rashid Kang of Greenpeace China for a general discussion moderated by Martin Savidge on China’s ambitions to green its economy (the other shade of green). Listen here:
Rashid and I explored the following issues:
- how China is greening rapidly and developing many alternative energy programs — from the world’s most efficient coal power plants to vast wind power fields and solar water heating technology
- implications of China’s growing automobile market
- why nuclear power could be the wrong alternative energy solution for China
- how food security affects China’s alternative energy strategy
- what is potentially, as I called it, “the holy grail of renewables” — energy storage
- and, why there are no climate change skeptics in China, but why China can’t go green overnight
Lesson to budding radio interviewees…always be cognizant of Read the full story
As expected, the U.S.-China presidential summit in Beijing yielded an agreement on clean energy and climate change that focused on collaboration rather than emissions target setting (see my comments in Time.com and China Daily). Here’s a run-down on what this cooperation entails, in a piece published simultaneously at Climate Progress with my colleague Andrew Light.
“Very exciting day here in Beijing. There’s enormous interest in both governments in working together to fight climate change. The package announced today is far-reaching and can make a real difference in cutting emissions.” - David Sandalow, Assistant Secretary of Energy for Policy and International Affairs
Today, a comprehensive plan for U.S.-China cooperation on clean energy and climate change was announced in Beijing by President Barack Obama and President Hu Jintao. The overall plan is much more ambitious in scope and depth than we had anticipated and contains directives to create various institutions and programs addressing a wide array of cooperation on clean-energy technologies and capacity building, including very important efforts on helping China build a robust, transparent and accurate inventory of their greenhouse gas emissions.
These efforts include cooperation in the following areas:
1. Greenhouse Gas Inventory. A memorandum of cooperation between the U.S. Environmental Protection Agency and China’s National Development and Reform Commission sets out avenues for collaboration on capacity building in climate change, with an initial focus on helping China to develop a robust, transparent and accurate greenhouse gas emissions inventory.
2. Joint Clean Energy Research Center. Originally announced this July, more details were provided on the joint center that will “facilitate joint research and development of clean energy technologies by teams of scientists and engineers from the United States and China, as well as serve as a clearinghouse to help researchers in each country.” Financial support from public and private sources of at least $150 million over five years, split evenly between the two countries, will be provided. The Center’s research will initially focus on building energy efficiency, clean coal including carbon capture and storage, and clean vehicles. (Factsheet)
3. Electric Vehicles. Those initiative will “include joint standards development, demon Read the full story
Updated Sep 30: Reactions from U.S. legislators and Chinese translation of main blog piece.
President Hu Jintao (pictured right) of China announced that China will build on existing domestic climate change policies as embodied in its National Climate Change Programme and current Five Year Plan to step up its efforts on energy efficiency, development of low-carbon energy such as renewables and nuclear, and increase of forestry cover. [For a transcript of President Hu's speech, click here]
Most noteworthy was president Hu’s introduction of a new goal to reduce carbon dioxide emissions per unit of gross domestic product from 2005 levels by 2020 by a “notable margin.” No specific numbers were provided, but this should not be surprising as such a far-reaching national policy must undergo various necessary legislative steps before it can become domestically binding. However, China’s willingness to translate its existing domestic energy conservation goals, often discussed in terms of amount of energy consumed, into a metric that is consistent with the language of international climate policy, i.e. carbon emissions, is the clearest signal yet that China is willing to take on responsibilities that are commensurate with its resources and global emissions impact.
This policy has at least three important implications. First, it would undoubtedly set China on a path to slow down its carbon emissions growth. How quickly such a deceleration leads to a peaking of China’s total emissions depends on the specific carbon intensity targets, but senior Chinese officials have recently given public assurance of China’s desire to peak its emissions “as early as possible.”
Second, a shift of focus from energy intensity to carbon intensity will help accelerate China’s transition to a low-carbon economy. The current energy intensity standard does not distinguish between energy derived from high-carbon fossil fuels and low-carbon renewables or nuclear. By framing China’s efficiency goals in terms of carbon emissions, low-carbon sources of energy will be favoured. A carbon intensity policy would thus not only encourage more efficient use of fossil fuels, as the current energy intensity goal does, but also amplify China’s already ambitious targets on renewable energy deployment.
Third, the policy implicitly commits China to measure, report and verify (MRV) carbon emissions on an ongoing basis. It remains to be seen whether Read the full story
Today’s Green Hops, focusing on energy supply, is a continuation of yesterday’s.
Two important macro-policy documents are in the works. CELB reports that the comprehensive Energy Law may be passed in 2010 (though this Chinese clipping suggests it may be as early as this year), and that the 12th Five-Year Plan for Energy (2011-2015) is in draft mode. Nuclear, wind and hydro seem to bet the alternative energy sources of choice. This alternative energy review by China Daily, in its “Mixed Energy Forecast” seems to similarly suggest the short shrift given to solar. How unimaginative. I’m sure the solar industry would have something to say about that. In fact, it has (see solar section below).
Before turning to the knitty-gritty of the green and brown energy news developments over the past weeks, I would like to highlight a sage piece of advice from CELB, that recognizes that China is still in many ways, but especially economic development, very much a “Rule by Plan” rather than “Rule of Law” society: Read the full story
In the wake of more bad (good if you are for green) news in China’s auto sales trends, GLF is observing an increasingly resonant cacophony of green washing in the auto sector…
Haifei Automobile Group joins the electric vehicle race and sets its sights on launching the Haifei Saibo electric vehicle in the U.S. markets later this year. Lithium-phosphate battery maker China BAK is getting government support for R&D. GreentechMedia debates if the U.S. will move from Arab oil dependence to Asian car battery dependence. Another angle is if both the U.S. and Asia moves towards South American lithium dependence.
Beiqi Foton Motor (SHSE: 600166) established China’s first manufacturing and R&D base for new energy vehicles in Beijing. The base covers an area of 1,000 mu (around 66.67 hectares), with a total investment of Read the full story
Energy Price Reforms
NDRC announced that it would be removing price caps on coal from next year in a move towards a more market-driven price mechanism. This move comes at an opportune time when coal prices have dropped by 30 to 40% since the summer, but GLF points out an earlier post (see finding #4) on a recent MIT coal report that suggests the upstream coal industry has already moved towards a de facto market price system. Although the NDRC move “is a step in the right direction,” Huang Shengchu, president of Beijing-based China Coal Information Institute says in this interview that government macro-control is still needed to protect the rights of various coal stakeholdres in their contractual dealings with each other, accerlarate industry consolidation of the many small and inefficient mines and to set up a coal price index.
Separately, the proposed auto fuel price reform kicked in earlier than expected. So it turns out that the answer to our confusion (see earlier post) of how the government proposed to hike up taxes and keep fuel prices even was that they would adjust the base fuel price downward, predicated on Read the full story
GLF has been traveling and getting a little caught up on side projects, but let’s play some catchup. Let’s pick things up with two specific appointments by President-elect Obama which have implications for U.S.-China energy relations–one being the 1997 Nobel Prize Laureate Dr. Steve Chu of Lawrence Berkeley Labs (LBL) as the new Secretary of Energy, and the other being Dr. John Holdren, physicist and energy technology policy professor at Harvard and Director of the Woods Hole Research Center (whom yours truly had the pleasure of meeting in the copy room as a policy intern there way back in 2003) as the White House science & technology adviser.
Besides being a director of LBL, Dr. Chu (pictured right) is also a professor of physics and molecular and cell biology at Read the full story
China is not going to solve its energy problem if it does not solve is water problem (see previous post on “China’s Water Torture“). It is as simple as that.
The fact is, the exploitation of just about every energy resource (including renewables, but especially fossil fuel) requires water. Conversely, the purification of water for drinking requires energy, and some purification methods, such as desalination, require a lot of it.
Click to enlarge. Source: “Energy Demands on Water Resources” a December 2006 report by the Sandia National Labs to the U.S. Congress on the interdependency of water and energy that remains the definitive report on the topic.
In energy resource and water scarce China, the energy-water nexus, or watergy, is a twin threat. Power production in China has to compete with agriculture, industries, and environmental flows for an already scarce resource. China relies heavily on coal for electricity, is pushing hydro power and nuclear as major alternative sources of energy. Coal-to-liquids (CTL or coal liquefaction) has also been cited as a way to reduce China’s dependence on oil imports. According to the Pacific Institute, there have been Read the full story
More on the Green Olympics. Just one more day to the opening ceremonies! In our last post, we examined some of the stopgap measures that Beijing embarked on to deliver on its Green Olympics promises. Louis Schwartz, one of my favorite commentators on China’s clean tech scene, provides some juicy details of the kinds of renewable energy systems being deployed in the Olympic venues. He ends his article with a thought which must be on every green observer’s mind:
As is so often the case in China, the Summer Olympics in Beijing present two contradictory views of China’s environmental and energy stewardship. Will China’s future development realize the promise of the enlightened environmental and energy infrastructure now on display at the Olympic venues or will the Olympic Village turn out to have been just a Potemkin Village? Stay tuned.
Environmental exchanges launched. Shanghai and Beijing plan to launch exchanges that will facilitate the trade of emission credits, once regulatory approvals are granted. China Environmental Law Blog provides a good breakdown on what the respective exchanges hope to achieve.
Receiving less media attention are Changsha’s (of Hunan province) efforts to engage in emissions trading. Reuters reports that Changsha has drawn up a plan to assign credits for “dust, carbon dioxide and chemical oxygen demand (COD)” with the view of facilitating the trade of those credits “as early as next year.”
New energy body starts work. The newly approved China National Energy Administration (NEAR) has begun operations. Ominously, one of the NEA’s first pronouncements was to project that nuclear power will constitute 5% of China’s total power generating capacity by 2020, one percentage point more than was originally projected by a 2007 national nuclear energy plan.
Siemens sees green in China. Siemens, the German industrial conglomerate, expects more than 50% of its growth in China to come from the environmental sector. “More than half of our 1 billion euro mid-term investment in China until 2010 will go into energy-saving and environmentally friendly technologies and solutions,” said Richard Hausmann, president and CEO of Siemens China, to China Daily. And why not? GE’s doing it.
Siemens Energy will deliver the first two of five coal gasifiers to Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG), a subsidiary of Shenhua Group, China’s largest coal supplier. The coal gasifiers, each with a thermal capacity of 500MW, are destined for the Ningxia coal-to-polypropylene (NCPP) plant in Ningxia Province in northwest China. As Green Car Congress explains:
In the gasification process hard coal, lignite and other substances such as biomass, petcoke and refinery residues will be converted to syngas, and environmental pollutants such as sulfur and carbon dioxide subsequently removed. The syngas can then be used for power generation in integrated gasification combined cycle (IGCC) plants or as a raw material in the chemical industry, for example in the production of synthetic fuels.
Click here for a power point presentation on Siemen’s coal gasification technhologies.
New EE rule for fixed-asset projects. Such projects by Siemens should have no problems meeting a new regulation proposed by the government to condition the approval of fixed-asset projects by meeting specific energy efficiency criteria. The new regulation is drafted in line with China’s Energy Conservation Law, which took effect on April 1 and has received good coverage by China Environmental Law Blog.
The Green Leap Forward joins the people of China and the rest of the world in these few days of mourning over the victims of the Sichuan earthquake (see all the coverage on China Daily here). We also join arms with our brothers and sisters in Myanmar who are dealing a horrific natural catastrophe of their own.
For those of you who would like to donate to the China quake relief efforts, CNReviews provides a pretty comprehensive relief and donation guide. Google has also set up a useful interactive earthquake relief site.
The claim on human lives in China, some 35,000 by now, in addition to the 225,000 injured and more missing, has shook the nation and comes in the wake of a tumultuous year so far—the ice storms in the southern provinces earlier this year and the clashes in Tibet in March.
The economic effects of the quake, so far, seem to be slight. The energy impact, on the other hand, may be a little more far-reaching.
According to a BusinessWeek article:
Sichuan is a major onshore gas producer and the country’s largest hydropower generating region. The quake’s destruction has affected natural-gas exploration and production and has hit hydropower operations hard. Sichuan’s electricity grid is running at 76% of pre-earthquake levels, with 27 power stations shuttered, China’s State Power Grip announced on its Web site on May 19.
China can ill-afford severe disruptions to the gas and hydro industries, which are vital to fueling the country’s double-digit GDP growth. Sichuan supplied some 27% of the country’s national gas production in 2007. While natural gas still only accounts for 3% of the national energy mix, Beijing plans to raise that proportion to 10% by 2020, with Sichuan’s rich reserves playing a key role in that expansion.
The International Business Times substantiates the BusinessWeek report:
The area subjected to the quake produces about 22 percent of China’s natural gas supplies and contains many coal mines and hydro-electric dams which generated about 62 percent of the provinces total electricity production. Many of the 396 power stations on the river system and their dams were damaged. Several major reservoirs are being drained to prevent their dams from failing. Beijing ordered coal mines, oil and gas wells, and chemical plants affected by the quake to shut down until the situation could be assessed. Twenty-two coal mines in Sichuan, Chongqing and Gansu provinces were affected by the quake.
Loss of significant amounts of natural gas, coal, and electricity production for an indefinite period suggests that China will have to step up imports of coal and oil products. Already some 700,000 barrels of emergency fuel supplies have been dispatched to the area.
The IBT report goes on to suggest that world energy prices will be under pressure during the summer as China imports more oil to prepare for the Olympics and the support recovery from the earthquake. Already, the state-owned oil company PetroChina is halting petroleum exports based on “robust domestic demand” and the central government has acted to release oil from its state reserves.
This other report tells of a spike in nonferrous metal prices, especially zinc, after the quake.
Dongfang Turbine Badly Hit
The operations of Dongfang Turbine, China’s largest steam turbine producer, were virtually wiped out. According to BusinessWeek, Dongfang, which produces 30% of China’s locally made turbines, estimates direct losses from the earthquake will reach $1 billion. Its parent company, Dongfang Electric Corp., has seen its stock price plummet as the steam turbine business accounted for 20% of its operating revenues in 2007.
Incidentally, Dongfang Turbine is also the third largest domestic manufacturer of wind turbines. Although some reports suggest that facilities for its wind turbine business was unaffected (e.g. South China Morning Post:”The company said the earthquake had little impact on other production facilities, including those that made hydroelectric turbine generators, steam-power generators, power station boilers, wind power and nuclear power equipment and engine generators.”), an industry source has told me that most of their wind business’ senior engineers have unfortunately perished and one their a wind components factory was badly damaged. The quantifiable impact to its overall business, or wind industry in general, is unknown at this time.
Assessing the Dam-age
The impact on the region’s dams and hydropower are potentially even more serious. According to BusinessWeek:
On May 14, the Water Resources Ministry announced that 391 dams were believed badly damaged. “There are major safety issues right now with the reservoirs, hydropower stations, and lakes in the earthquake zone,” Minister Chen Lei said in a statement released on the ministry’s Web site. “The area has numerous reservoirs and lots of damage, and the extent of the danger is unknown.”
Unlisted SinoHydro, China’s largest hydro company, has announced that close to 100 of its employees have died, 500 have been injured, and 10,000 made homeless following the quake. Estimated property damage: almost $250 million, with $330 million needed for reconstruction, the company says.
Even more alarming is the possibility of one of China’s earthquake-weakened dams or reservoirs bursting…Even before the quake, Beijing had admitted there are major flaws in many of the country’s 87,000 dams. “Roughly 37,000 dams across the country are in a dangerous state,” [Ministry of] Water Resources deputy minister Jiao Yong said earlier this year, noting that many had been built decades ago.
In the wake of the earthquake, the New York Times reports that the military has been dispatched to shore up weakened infrastructure, such as the almost 400 dams damaged or weakened in the region that pose a public safety threat. One such dam is Zipingpu Dam, up the river from the earthquake-hit city of Dujiangyan, is featured in this video:
This piece by TreeHugger, while recognizing that the Sichuan quake was a result of natural geologic forces, calls for a careful look at the ability of large dam projects, such as the Three Gorges Dam, to trigger earthquakes of their own. See also this this piece by China Economic Review.
Nuclear Facilities Unaffected?
There are reportedly a few nuclear facilities in the quake zone, including two nuclear fuel production sites and two atomic weapons sites in Sichuan province, where the quake struck, between 40 and 90 miles from the epicentre. The official word, according to a senior military official, is that all nuclear facilities are safe…but western experts are monitoring the situation closely.
Regardless, the quake does put a dent on Sichuan’s nuclear ambitions.
Carbon Credit Crunch?
In terms of the carbon markets, it is feared that some 5% of the country’s carbon credits supply could be reduced as a result of the quake, as clean development mechanism projects totaling some 15 million tons worth of carbon lie within a 150 km radius of the epicenter.
However, this reduction in supply may be more than offset by an impending fall in demand for carbon credits, as the World Bank warns.
It is an understatement that to say that China’s building codes are not always followed. The large number of school buildings that collapsed have attracted attention to the systemic failure of meeting prescribed building codes, prompting the promise of governmental action. But it should come as no surprise that the need to “build things faster and cheaper”, especially in the rural areas, have come at the sacrifice of a few things, such as regulatory compliance.
An op-ed in the China Daily urges governments to see the massive rebuilding needs in the wake of the earthquake as an opportunity to incorporate higher levels of energy efficiency and environmental standards, in the wake of an impending construction boom that could otherwise have derailing environmental consequences.
It is hard to imagine that amidst the chaotic frenzy to restore a sense of normalcy across the region, that such far sighted considerations will be given much weight over the immediate needs of those affected. When the dust settles, however, there will be an opportunity to consider, and not without international cooperation, what it means to rebuild a more sustainable set of infrastructure.