Clear The Air Energy Blog Rotating Header Image

October, 2008:

Incandescent Light Bulbs May Be Banned

Cheung Chi-fai – SCMP – Updated on Oct 16, 2008

Funding carbon audits in buildings and a possible ban on incandescent light bulbs were among measures heralded by the chief executive to combat climate change and develop a low-carbon economy.

“We will enhance energy efficiency, use clean fuels, rely less on fossil fuel, and promote a low-carbon economy – an economy based on low energy consumption and low pollution,” Donald Tsang Yam-kuen said.

Up to HK$450 million will be reserved under the Environment and Conservation Fund to partially subsidise building owners to conduct energy and carbon audits for their public space and carry out related improvement works. The subsidy details would be later worked out by the fund.

The government will also consider following overseas practice in banning incandescent light bulbs and study the feasibility of controlling outdoor light pollution by law. The mandatory energy labelling scheme for electrical appliances will also be extended to cover washing machines and dehumidifiers.

District cooling will be adopted for the Kai Tak development that will cost HK$1.4 billion to build but bring about an annual energy saving of 85 million kilowatt-hours and a reduction of 60,000 tonnes of carbon dioxide each year.

Friends of the Earth environmental affairs manager Hahn Chu Hon-keung welcomed the measures but questioned where they would lead. “The lack of a timetable and energy saving targets means the government is not yet committed,” he said.

Greenpeace campaign manager Edward Chan Yue-fai said the government should ban incandescent bulbs immediately.

Meanwhile, WWF Hong Kong welcomed an earlier announced move to ban commercial fishing in marine parks. The green group’s director of conservation, Andy Cornish, described the ban as a “historic event” for marine conservation. But the group said more substantial gains could be achieved by designating the Soko Islands as marine parks.

HK Aims To Raise Proportion Of Clean Fuels To 50% At Power Plants

Thomson Financial News – 15 October 2008

The government aims to increase the proportion of clean fuels in the power generation sector to 50 % of generated output to combat pollution, Hong Kong Chief Executive Donald Tsang said.

‘As electricity generation is a major source of pollution in Hong Kong, I pay special attention to ways of reducing coal-fired power generation and promoting the wider use of clean fuels while maintaining secure supplies of energy,’ he said.

He noted in his annual policy address that 28 % of electricity generated by power plants in Hong Kong comes from gas-fired facilities at present.

‘To improve air quality and address the challenges posed by global warming, we will actively explore ways to gradually increase the use of clean energy by, for example, increasing the proportion of natural gas for local electricity generation to 50 percent,’ he said.

Tsang did not provide a specific timeframe for achieving the objective.

The Challenge Of Ensuring Hong Kong’s Energy Supply

Andrew Brandler, Oct 10, 2008 – SCMP

Chief Executive Donald Tsang Yam-kuen’s recent energy deal with Beijing, securing gas and nuclear power supplies for Hong Kong for the next 20 years, is a landmark in the development of the city’s energy policy.

We at CLP Power had been consistently advised for many years that Hong Kong would need to look after its own energy needs as Beijing wrestled with the very real challenge of securing reliable power for the fast-growing mainland cities and provinces. So this deal represents a new, critical development in Hong Kong’s energy policy. This was immediately followed by the Hong Kong government’s statement that the liquefied natural gas terminal project that CLP Power had proposed would not be approved.

CLP Power welcomes Beijing’s support for long-term energy supply. The task ahead is to turn good news into good results and complete the deal on behalf of the Hong Kong people – to secure sufficient gas at the best possible price, and in time for us to replace our declining supplies from the Yacheng gas field in the South China Sea.

It is a measure of Beijing’s good faith in this deal that we have immediately been able to begin detailed discussions with counterparts at the National Development and Reform Commission. But even with this fast start, we are going to face an acute time challenge to make adequate quantities of gas available by 2013.

Hong Kong needs new gas supplies in place then if our Black Point Power Station is to continue providing a significant portion of our power supply, reduce our reliance on coal and enable us to meet lower environmental emissions targets.

As the Yacheng supplies deplete, the deal opens the way to draw gas from three sources: from new gas fields planned to be developed in the South China Sea; from the second east-west gas pipeline bringing gas from Turkmenistan; and, from an LNG terminal to be located on the mainland.

None of these three sources is in place today. However, let us be very clear: Hong Kong’s needs are so substantial that we will need not one or two of these sources to be brought on stream, but all three.

Black Point will be using about 3.4 billion cubic metres of natural gas a year by 2013. In the following decade, as demand for electricity steadily rises and as Hong Kong progressively tightens caps on emissions from local sources, consumption will potentially rise to as high as 6 billion cubic metres by around 2023.

To meet this need, we have been advised that 2 billion cubic metres was planned to come from several new, but smaller, gas fields in the South China Sea to replace Yacheng. If the second west-east gas pipeline can be extended to Hong Kong, we would be able to draw 1 billion cubic metres from this source. With the planned volumes of gas from these two sources, a significant amount of gas will almost certainly need to be sourced from the new LNG terminal in the Pearl River Delta.

Our government’s decision to reject our proposal to build an LNG terminal on South Soko Island means we lose a four-year head start, and face a challenging timetable, as an appropriate mainland site needs to be found and approved, which will involve a rigorous Environmental Impact Assessment.

If we are to meet our targets to ensure power supply reliability over the coming decade, I can’t overemphasise the critical importance of government support and, where necessary, leadership, all the way to completion.

The Memorandum of Understanding is a starting point for meaningful cross-border collaboration in the power sector.

Its implementation and a successful outcome for Hong Kong will depend on the effective collaboration by mainland enterprises with CLP Power, encouraged, enabled and stewarded by our government and the mainland authorities. CLP Power will play its full part.

Andrew Brandler is CEO of CLP Holdings (SEHK: 0002) Limited

City Of Far Too Much Light

Updated on Oct 10, 2008 – SCMP

At night in Hong Kong, it is difficult to see the stars in the sky because of the street lamps, and bright shop and neon lights.

It is no wonder that the city at night is a sight that attracts tourists from around the world. But while it might be a magnet for visitors, do we ever think about the serious environmental problems we cause by light pollution?

I know residents in some neighbourhoods complain that strong exterior lighting at night is so bad that it affects their health, because they have difficulty sleeping.

It also affect birds, because they become disorientated.

Light pollution is a problem that the government has to deal with. It is not as if this is something new.

Regulations should be put in place to try and reduce light pollution and give residents and animals some protection. It could limit the number of shops that can have lights on at night and inspect premises to ensure the rules are adhered to. It could also impose a limit on the intensity of lights, so they are not so strong. The government should also try and educate people so they become more aware of the problems that can be caused by light pollution.

Harina Fong, Wong Tai Sin

Raising The Bar

Updated on Oct 09, 2008 – SCMP

In return for receiving assistance, Hong Kong has a responsibility to return the favour. As the most economically advanced city in China, it should be a high environmental achiever. In exchange for receiving some of the natural gas the mainland desperately needs, under a new memorandum, Hong Kong should commit itself to an aggressive low-carbon programme to help meet national goals.

So far, the Tsang administration has only focused on the benefits we accrue – lower tariffs and cleaner air. Hong Kong should appreciate that, despite all Beijing’s efforts to secure energy supplies, there will still be a shortage of cleaner fuels to power development.

Since the late 1990s, China has been building a network of natural-gas arteries. Today, there are around 24,000km of pipelines; by 2010, this figure should increase to 36,000km. From now, until 2020, we will see the rapid development of China’s natural-gas industry.

Yet, the mainland will continue to have inadequate supplies. The shortfall will have to be met through imports via land pipelines from Central Asia, as well as liquefied natural gas imports from elsewhere.

Hong Kong needs to view Beijing’s willingness to give us some of its natural gas in the context of the country’s overall energy profile. Energy is a finite global commodity, and its supply and demand affect us all. Policymakers in Hong Kong need to do their best not just to secure supplies but also to conserve energy and use it efficiently.

For example, Hong Kong undoubtedly has the capacity to substantially improve the energy efficiency of buildings. It can also use demand-side tools to get the electricity companies to find innovative ways to work with customers, so that reducing consumption and improving efficiency are rewarded financially. The utilities should be allowed to earn more from energy savings, and customers can also benefit by paying less. Currently, the schemes of control have weak demand-side incentives.

The government had said it has an open-market energy policy and is paving the way for the possible opening up of the electricity market. And it will look into enhanced interconnection between the two power companies’ grids. The administration sees this as a way to promote competition in the future, as well as possibly opening up the electricity market to others.

What might this mean? Will the government consider a compulsory purchase to buy the grids, in the public interest? There may well be good reason for the power grid to be a public asset, like the airwaves. Anyone who generates power could then use the grid.

Does the government see a future in distributed power – that is, on-site, decentralised power generation that can reduce transmission loss and increase supply security? Imagine buildings generating their own power using renewable technologies, and only tapping into the grid occasionally.

A low-carbon economy will probably involve all these efforts, and more. It is time for Hong Kong to show real appreciation for Beijing’s generosity.

As the nation’s most developed city, Hong Kong should be best placed to align its regulatory, management, financial and technological capacities to define how a city can grow but emit a lot less carbon and other pollutants.

With traditional financial services in a bad state, it is also a good time to test new ideas. For example, now that projects in Hong Kong can earn carbon credits, under the Kyoto Protocol’s clean development mechanism, what advantage can be gained from that?

So, it will be disappointing if the chief executive gives us another “business as usual” policy address next week that ignores environmental needs and the consequences of climate change.

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange.

Government Gave Power Plant Right To Pollute More

SCMP – Friday October 8 2004

China Light and Power omits certain details in the letter from Daisy Chan (‘CLP has made significant cuts in emissions’, October 6).

Compare the CLP-ExxonMobil coal power plant at Castle Peak to Hong Kong Electric’s most recent Lamma Island coal plant (built in 1997). You will see that CLP has been given the right by Secretary for Labour and Economic Development Stephen Ip Shu-kwan to generate twice the amount of one pollutant (particulates), three times another (nitrogen oxides) and 10 times a third (sulphur dioxide) as the Hong Kong Electric plant.

Moreover, the actual emissions from the Castle Peak plant are kept secret by the government at the request of CLP. At any time since 1997, CLP could have spent a fraction of its profits to clean up this plant, but it has instead waited for seven years – and now it has sent a letter to Mr Ip asking that it be allowed to earn 15 per cent profit on its investment to clean up the sulphur dioxide. This is unconscionable. The Star Ferry only asks seven per cent profit for its shareholders.

And the real question is why Mr Ip has allowed CLP to force us to suffer for seven years when the technology has existed for more than 10 years to reduce the sulphur dioxide by more than 90 per cent.

The public is not allowed to see or have an opinion on CLP’s letter. We believe that we are entitled to know what profits Mr Ip thinks are acceptable to CLP and that he will be hard-pressed to justify more than a seven per cent return for the shareholders of CLP-ExxonMobil, the single biggest polluter in Hong Kong.


Causeway Bay Mall Voted City’s Worst Light-pollution Landmark

Joyce Ng – Updated on Oct 06, 2008 – SCMP

A shopping mall at a busy corner in Causeway Bay has been named the most polluting city landmark in a campaign seeking to enhance public awareness of light pollution.

An online poll, organised by the green group Friends of the Earth, recorded 347 of 639 voters picking Windsor House on Great George Street as a “ridiculous” light spot.

More than 60 spotlights were illuminating billboards with 10,000 lux of light, the group found. The intensity was 20 times as high as required for an office environment.

Voters said the spotlights were scorching and hurt the eyes, and chased away customers instead of attracting them.

The green group will hold a protest in front of the building at 7pm on Friday. It calls for participants to wear sunglasses, bring an umbrella and put on sunscreen.

“We are not opposing advertising, but half of the lights should be enough to serve the purpose and it saves energy,” said Hahn Chu Hon-keung, the group’s environmental affairs manager.

Windsor House representatives were unavailable for comment.

Among the other 11 spots nominated by voters as polluting sources, the Prada store in Central and a sign for a non-existent Tse Sui Luen Jewellery Shop in Jordan rank second and third on the list, getting 98 and 41 votes. The jewellery-shop sign, an illegal structure, was still present even though the government has issued a removal notice.

Some of the sites were still lit after midnight when there were no shoppers. Residents have to hang a cloth over their windows to block the light.

Official figures show complaints about light pollution rising. The Environmental Protection Department has received 27 complaints in the first six months of this year, compared with 40 in all of last year.

There are no environmental regulations controlling light pollution, but outdoor advertising lights are regulated for safety reasons.

Some countries have rules to adjust the direction of light to avoid disturbing residents, Mr Chu said.

“I’ve seen a jewellery shop reducing its light sign’s flash frequency after residents complained. This shows the situation is adjustable.”

China Takes Gold in Methanol Fuel

Greg Dolan, Journal of Energy Security, Monday, 06 October 2008

In 2007, China firmly established itself as the driver of the global methanol industry. The country became the world’s largest methanol producer and consumer. China also leads the world in the use of methanol as an alternative transportation fuel blending nearly one billion gallons of methanol in gasoline. Taxi and bus fleets are running on high methanol blends (M-85 to M-100), and retail pumps sell low level blends (M-15 or less) in many parts of the country. At the same time, China is developing production capacity for dimethyl ether (DME) – using coal-based methanol as a feedstock – for markets as a blendstock with liquid petroleum gas (LPG) used for home heating and cooking and as a diesel substitute for buses.

Chinese Premier Wen Jiabao recently visited a methanol plant in landlocked Ningxia Hui Autonomous Region in northwest China where he urged workers to work hard to build up an industrial base that meets the standards of scientific development. Shenghua Group’s Wu Xiuzhang told China’s Xinhua news agency that the country’s methanol and DME industry is developing by “leaps and bounds” and may lead to overcapacity. China’s methanol production capacity has grown from 6.16 million tons in 2003 to an expected 20.6 million tons in 2008, with actual anticipated output of 13 million tons. By 2010, China’s methanol production capacity could reach 37.24 million tons. To put this in perspective, total world production capacity excluding China is expected to be roughly 40 million tons this year (about 13.3 billion gallons or 50 billion liters).

DME production has also increased from 32,200 tons in 2002 to 1 million tons in 2007. Wu cautioned that “The methanol fuel gas [has] not reached the standard for auto use, and there is still a long way to go for DME to substitute LPG. Under such circumstances, we must not ignore the overcapacity issue.” Research and Markets, an international research firm, reports that demands for methanol fuel as M-15 and other downstream products will increase China’s consumption of methanol at an annual average growth rate of 16.6% between 2008 and 2012, which will help sustain high methanol prices in the country.

For more than a decade, provincial leaders in coal producing provinces (Xinjian, Shanxi, Shaanxi, Henan, Inner Mongolia, Beijing Shi, Hebei, Anhui, Guangdong and Sichuan) have been developing methanol fuel demonstration programs. These efforts have involved methanol producers, automakers, and academic institutions. In September 2006, eight leaders provided a report to the Chinese President Hu Jintao entitled “Suggestion on Promoting Methanol Fuels to Replace Gasoline and Diesel Fuel.” President Hu approved this “Suggestion” and directed the powerful National Development and Reform Commission (NDRC) to explore the use of methanol fuels. The NDRC now considers coal-based methanol to be a strategic transportation fuel and has directed the development of national methanol fuel blending standards.

Those provinces in their “official” trial stage have already adopted their own methanol fuel specification to allow the demonstration of methanol vehicles. Today, methanol sells for roughly RMB$2,500 (US$350) per metric ton, while wholesale gasoline costs nearly three as much at RMB$7,000 (US$965) per metric ton, which encourages the “unofficial” use of low level methanol fuel blends even in parts of the country that do not have a methanol fuel specification. According to Mark Berggren, Managing Director of Methanol Market Services Asia, 2.71 million metric tons (nearly one billion gallons) of methanol was blended with gasoline in China last year, with an additional 800,000 metric tons of methanol fuel demand growth expected in 2008.

“In the U.S., corn ethanol may be king, but in China where pure economics matter most, methanol is the dominant alternative fuel,” said Methanol Institute President & CEO John Lynn. “With millions of miles of experience in using methanol in cars, trucks and buses, China is showing the rest of the world how clean transportation fuels can be made from coal.”

China has over 200 methanol plants, with a total production capacity in 2007 reaching over 14 million metric tons (4.7 billion gallons). Many of these are smaller plants that are closing as larger, world-scale facilities are built. While demand for tradition methanol markets (formaldehyde, acetic acid, MTBE which is a gasoline additive) are increasing at double-digit rates, the tremendous growth in new capacity will make available large volumes of methanol for fuel markets. If just 5% of China’s cars used M-85 or M-100 fuel and another 15% use M-15, China would displace 13 million tons of gasoline (4 billion gallons) and significantly reduce its dependence on imported oil.

In 2007, China’s imported 47% of its oil, and this year the country passed Japan to become the world’s second largest oil importing nation only behind the United States. As Prof. Ni Weidou of the Tsinghua University-BP Clean Energy Research and Education Center told Interfax-China, “The clock is ticking, and China needs to start adopting alternative fuels now in order to lessen its dependency.” Last year, China banned the use of grain for ethanol production to ensure food supplies. China does have the world’s third largest coal reserves – 126 billion short tons – behind the United States and Russia. China is now the world’s largest coal producer and consumer, and has begun a strategic shift to produce chemicals and fuels from coal rather than oil or natural gas.

The production of methanol from coal gasification is a mature technology. In the United States, Eastman Chemical produces methanol from coal gasification at a plant in Kingsport, Tennessee that was built with support from the U.S. Department of Energy (DoE). Based on this experience, the U.S. DoE estimates that methanol can be produced from coal for as little as 50¢ per gallon. In China, production costs from coal are generally RMB$800-1,200 per metric ton of methanol (US$110-165/metric ton, or 33¢ to 50¢ per gallon). In addition, coke furnaces in China generate 80 billion cubic meters of waste gas each year, enough to produce 40 million metric tons of methanol, and significantly reduce pollution in the coal-producing regions. Coal-bed methane deposits of 30,000-35,000 billion cubic meters in China represent another significant energy resource as well as a hidden danger that claims miner’s lives each year. Just 1000 cubic meters of coal-bed methanol can produce one metric ton of methanol.

China’s automotive industry is already stepping up to meet this challenge. The country’s fastest growing independent automaker, Chery Automobile, has recently completed demonstration work on 20 methanol flexible-fuel vehicles – capable of operating on methanol or gasoline – now ready for full-scale production. Shanghai Maple Automobile has announced plans to build 2,000 methanol cars in 2008. Chang’an has introduced the methanol-fueled BenBen car. Greely Automotive has put its Haifeng methanol car into production. Shanghai-based Huapa Automotive has built a number of methanol fueled cars. Shanghai Automotive Industry Corporation, one of the big 3 automakers in China, is developing a number of methanol-fueled cars. In addition, a number of smaller companies are converting large numbers of cars to methanol operation.

In December 2007, a delegation of Methanol Institute (MI) members meet with the officials responsible for establishing methanol fuel standards in China. The standards work is headed by the Shanghai Internal Combustion Engine Research Institute, which has more than 50 years of engine research and development experience. The methanol standard work is part of China’s 863 alternative energy initiative. In March 2007, China’s Committee on Standardization requested three methanol standards, as follows:

  • High Proportion –This is a M-70 to M-85 (high methanol content) standard. A draft is currently circulating with a number of experts in China, and is expected to be presented in final form to the NDRC by the end of 2008.
  • M-15 – Expected to be completed by June 2009. The 15% methanol component also would include an additive/co-solvent.
  • Convertible Methanol Fuel – Also expected to be completed by June 2009. This is an M-100 standard that would set the specifications for neat methanol to be used as a gasoline blendstock at the M-15 level.

Methanol has a long history as a vehicle fuel in China, but over the last two years the nation has put an intensified focus on methanol. China is now ready to move from the demonstration of methanol fueled vehicles to large-scale commercial deployment. Mr. Rong Junfeng, a senior official with China Petroleum and Chemical Corporation recently told Xinhua News Service, “The standards will surely facilitate supervision over the current methanol market, and will define the way of methanol development in the future.”

The MI delegation also visited three cities in Shanxi Province, touring bus and taxi fleet depots and fueling facilities. Mr. Peng Zhigui, who runs the provincial methanol fuel office in Taiyuan and is a former Vice Governor of Shanxi Province, recently told the Financial Times, “Shanxi is doing the best job in China in promoting the use of methanol as a fuel. Our aim is to solve the problem of China’s oil shortage. We are creating a new kind of energy.” Shanxi currently has 3 million metric tons of methanol production capacity, with another 5 million metric tons under construction. With plans to add an additional 20 million metric tons, Shanxi anticipates reaching as much as 28 million metric tons of coal-based methanol production in the next five years.

Shanxi Province includes 11 cities with a total population of 33 million people. The Shanxi Provincial government provides subsidies to taxi and bus fleet operators to convert their vehicles to M-100 operation. There are now 200 buses and 1,000 taxis operating on M-100 throughout Shanxi. The city of Changzhi operates 80 buses on M-100, out of a total fleet of 500 buses. Each bus has a 200-liter fuel tank, which provides a range of 400 kilometers on methanol. There is a diesel pre-heater on the bus to warm the methanol and assist with cold starts. When the MI delegates spoke with one of the bus drivers, he was very enthusiastic about the methanol fuel.

In Jinzhong, 110 taxis operate on M-100, out of a total fleet of 300 taxis. There are plans to convert the entire fleet to M-100 operation. There is a coke-based 40,000 metric ton methanol plant in Jinzhong that provides fuel for the taxi fleet and consumer purchases of M-15 fuel. M-15 was first used in 2003 in four cities, and is now sold in all 11 cities across the province, in stations operated by PetroChina and Sinopec.

On October 13-16, 2008, Shanxi will showcase their methanol program by hosting the 17th International Symposium on Alcohol Fuels being held at Taiyuan University. The organizers anticipate over 200 international delegates representing government, industry and academia. They are also planning a technical tour to a fueling station and a methanol production plant, and will feature a methanol vehicle exposition.

In December 2004, the China Association of Alcohol and Ether Clean Fuels and Automobiles was formed by the China Petroleum and Chemicals Association and the China Association of Automobile Manufacturers. A non-profit organization that advocates for the use of methanol, ethanol and dimethyl ether fuels, the association has over 100 members representing methanol producers, fuel retailers, automakers, academic institutions and governmental agencies. On December 1, 2007, the Methanol Institute signed a Memorandum of Understanding to develop a framework for a cooperative relationship between the two organizations during a ceremony held in Shanghai, China. The agreement calls for a broad exchange of information between the two associations to help expand the market for methanol as a transportation fuel.

The signing ceremony was held during the Chinese Association’s Annual Meeting, which drew well over 200 attendees. During the ceremony, MI’s John Lynn stated, “While much of the early work on methanol fuel use was conducted in the United States and Europe, China has now picked up the baton and is leading this race. This is not a sprint or a marathon. The finish line will not be reached tomorrow, but it is not a decade away either… Methanol can answer many of the energy security issues we all face. We are confident that today’s agreement brings us an important step closer to the finish line.”

Gregory Dolan is Vice President for Communications and Policy at the Methanol Institute, which serves as the trade association for the global methanol industry.

Businesses Need To Join China’s Green Revolution

Oct 05, 2008 – SCMP

The mainland may be at the beginning of a transformation to a low-carbon economy. In reality, it does not have a choice. People may see little evidence of this at the moment when they stroll down the streets of major mainland cities. For example, Beijing’s infamous smog, which disappeared temporarily during the Olympics, soon returned. Temporary measures to improve air quality ended with the Paralympics and the old polluting ways have come back. But in the top echelon of government there is growing awareness of the environmental catastrophe that awaits the nation unless its turbocharged growth engine can change from high-carbon to low-carbon.

John Ashton, a senior British official on climate change policy, was in Hong Kong last week to talk about this change in mindset not only among mainland officials but among entrepreneurs. He also warns that Hong Kong investors may be missing out on the business potential. Mr Ashton said mainland businesses know they will eventually pay heavy penalities for polluting practices. So, for them, the issue becomes one of controlling business risks. As part of this trend, the Guangdong and Hong Kong governments are co-operating on the use of cleaner energy and have signed a deal to secure 20 years’ gas supply to encourage power companies to switch from coal to gas, Hong Kong’s environment secretary, Edward Yau Tang-wah, said yesterday. This is welcome, but the government and local businesses should promote environmentalism not only as a green cause, but as a business opportunity for green infrastructure and technology and for carbon trading.

On the mainland, it is not just a business issue. The political legitimacy of the central government and authorities in the rich provinces has rested on economic growth and the improvements it brings to people’s lives. That will be under threat unless officials can reverse the terrible environmental damage that has resulted. This is why Guangdong Communist Party chief Wang Yang harps on so much about low-carbon production as part of his “mind liberation” programme for cadres. It is time our city’s businesses joined China’s green revolution.

China Can Forge Ahead In Developing Renewable Energy

Green power

Michael Richardson – Updated on Oct 03, 2008 – SCMP

The latest tally of greenhouse gas emissions blamed for warming the world shows that China has emerged as the top polluter, ahead of the United States, by an increasingly big margin. Released last week, the scientific findings of the Global Carbon Project show that, last year, more than half the world ‘s emissions came from the high-growth economies of developing countries, led by China and India, and that this share is rising because emissions from developed economies are growing less fast.

The project’s Australia-based executive director, Pep Canadell, said that China alone accounted for 60 per cent of the emissions growth last year. This was due to its heavy reliance on coal for generating electricity and oil for transport fuel. Yet the world’s most populous nation is also a global leader in harnessing renewable energy, particularly hydro, wind, solar and biomass power.

As recession and the credit crisis in the west crimp lending and investment in relatively expensive alternative energy, can China seize the initiative and keep funding its drive to become less dependent on fossil fuels? This assumes, of course, that China’s banking system will remain immune from the contagion afflicting the US and Europe. If normal lending continues and business can take advantage of incentives put in place by the government, China could forge ahead of competitors in developing renewable power. This would strengthen its energy security and international efforts to prevent disastrous climate change.

China invested more than US$10 billion in new renewable energy capacity last year, second only to Germany, according to the Worldwatch Institute in Washington. Most of the money was for small hydropower projects, solar hot water and wind power. Meanwhile, annual investment in large hydropower schemes continues at a somewhat lower level. A renewable energy law, effective from the start of 2006, requires power grid operators in China to buy electricity from registered producers of renewable energy. It also offers tax incentives and subsidies to promote investment in the sector.

China gets 8 per cent of its energy and 17 per cent of its electricity from renewables – shares that will rise to 15 per cent and 21 per cent, respectively, by 2020, if the government’s target is met. The European Union, which wants to be the world’s pace-setter in combating climate change, is aiming for a somewhat more ambitious target of getting 20 per cent of its energy from renewable sources by 2020.

China is not alone in the developing world in seeking a more sustainable energy future. As a group, developing countries have more than 40 per cent of the world’s renewable power capacity, over 70 per cent of solar hot-water capacity and 45 per cent of biofuels production.

In China, wind power is the fastest-expanding technology for generating electricity. With many onshore turbines working, the first offshore wind farm started in November.

China is also a manufacturing powerhouse for solar photovoltaic energy, third only to Japan and Germany. It is the world’s largest market for solar hot water, with nearly two-thirds of global capacity. More than 10 per cent of Chinese households rely on the sun to heat their water. When Chinese firms turn to exporting, the lower costs of their units – some seven times less than in Europe – could reshape global supply and demand.

However, Steve Sawyer, secretary general of the Global Wind Energy Council, says Beijing’s efforts to rein in rash lending and curb inflation are hurting financing for wind power projects in China and may prevent it from emerging as the world’s fastest-growing wind energy market.

A report last year from consultants Frost & Sullivan cautioned that China’s wind and biomass industries were not nearly as developed as their western counterparts. As a result, they had “less experience in installing, maintaining and servicing renewable facilities”, wrote analyst Linda Yan. A key restraint on growth of China’s renewable energy markets was a lack of homegrown technology and dependence on imported equipment, she added.

Even if Beijing meets its renewable energy target for 2020, it will rely heavily on fossil fuels. That is a problem not only for China but also for the world – it is expected to overtake the US soon after 2010 as the world’s top energy-consuming nation.

Michael Richardson is an energy and security analyst at the Institute of Southeast Asian Studies in Singapore.