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Carbon Emissions

UPDATE 1-CLP expects A$245 mln carbon-related impairment loss

HONG KONG Dec 13 (Reuters) – Regional power utility CLP Holdings Ltd said it will write down the value of carbon-emitting assets in Australia, resulting in an expected impairment loss of A$245 million ($247.13 million) due to a new carbon tax law.

Australia’s parliament last month passed landmark legislation to impose a A$23 per tonne tax on carbon emissions for 500 of the nation’s biggest polluters across mining, energy and heavy manufacturing from mid-2012.

Hong Kong-based CLP said in a statement on Tuesday that it had completed a study on the impact of the legislation on its Australian unit TRUenergy, and would have to write down the value of the unit’s coal facility in Yallourn, Victoria, by A$350 million, the company said in a statement.

The writedown would result in a loss that would be recognised in its books this year, it said.

“No further writedowns within the TRUenergy portfolio are required as a result of the passing of the Clean Energy legislation,” the company said.

Analysts had expected a writedown of as much as $772 million because of the new law.

“The new carbon tax in Australia will significantly impact the long-term profitability of this plant,” said CLSA analyst Rajesh Panjwani in a report released on Monday, adding that the coal facility accounted for 17 percent of the power utility’s net worth.

TRUenergy is one of Australia’s largest integrated energy companies, providing gas and electricity to more than 2.5 million households and business customers. TRUenergy owns and operates a 5,469 megawatt (MW) portfolio of electricity generation facilities.

Analysts expect the Australian carbon legislation to have a limited impact on the company in the near term, as the new law allows CLP to claim up to A$1.5 billion in cash compensation and free carbon permits, which could boost earnings at TRUenergy by 15 percent yearly before interest, taxes, depreciation and amortisation (EBITDA) from 2013 to 2015.

But there would be less predictability after the first three years as Australia ended the cash incentive and introduced a carbon-trading scheme under which the market would determine the price of carbon, said analysts. ($1 = 0.9914 Australian dollars) (Editing by Chris Lewis)

New Australia carbon laws to hit CLP

Reuters in Hong Kong 
12:54pm, Nov 08, 2011

Hong Kong-based regional power utility CLP Holdings (SEHK: 0002) said on Tuesday that its this year results will likely be hurt by Australia’s newly passed carbon law.

“As a consequence, the financial results of CLP Holdings for this year are expected to be adversely impacted,” CLP, which has big investment in Australia’s power generation industry, said in a filing with the Hong Kong stock exchange.

Australia’s parliament passed landmark laws to impose a price on carbon emissions on Tuesday in one of the biggest economic reforms in a decade, giving new impetus to December global climate talks in South Africa.

The scheme’s impact will be felt right across the economy, from miners to LNG producers, airlines and steelmakers and is aimed at making companies more energy efficient and push power generation towards gas and renewables.

Shares of CLP were trading at HK$70.90 at midday on Tuesday, up 0.07 per cent

Wind Energy Does Little to Reduce CO2 Emissions

Here is an important article regarding wind energy not reducing CO2 on grids. The article is based on 2 studies using measured, real-time operations data of the Colorado, Texas and Irish grids, all with significant wind penetration. The studies show increases of CO2/kWh due to adding wind energy to electric grids.

For some years wind turbines were presented to the public as renewable energy producers that would reduce the CO2 emissions from fossil plants, because less fossil fuels would be burnt, while making the US less dependent on energy imports from unstable regions.

Wind turbine vendors, project developers, financiers, trade organizations, etc., popularized wind energy as saving the planet from global warming with PR campaigns that claimed there would be significant CO2 reductions/kWh, that capital costs/MW would decrease, and that wind energy costs/kWh would be at grid parity in the near future.

Apparently many people, including many legislators and the US president, believed it all, because a fear-driven, heavily-subsidized, multi-billion dollar build-out of wind turbine facilities occurred.

End December 2010 installed capacity: total US 41400 MW; top 5 states: Texas 10085 Mw, Iowa 3675 MW, California 3177 MW, Minnesota 2192 MW, Washington 2104 MW. Estimated capital cost about $70 billion, mostly during the past 10 years.

US 2010 wind energy production: 2.3% of total production, or 94,650 GWh

It may take another 10 years to install the next 40,000 MW and have 4.6% wind energy. However, there may not be sufficient capital, because the US fiscal and monetary conditions are not favorable.

After skepticism was expressed by power systems engineers in the US, the UK, Denmark, the Netherlands, etc., about claims regarding CO2 reductions/kWh due to wind energy for at least the past five years, several studies were performed which have accurately quantified the CO2 reductions/kWh based on measured operations data of the grids of Colorado, Texas and Ireland, all with significant wind energy penetration.

ERCOT of Texas, Public Service of Colorado, and EirGrid of Ireland are three grid operators that publish 1/4-hour or 1-hour operations data of relevant parameters that can be used to analyze the effects of wind energy on the operations of the other plants (coal, nuclear, hydro, gas) on their grids.


The Bentek study of the Colorado and Texas grids, based on measured hourly (in case of Colorado) and 1/4-hourly (in case of Texas) power plant operations data of fuel consumption and CO2, NOx and SOx emissions, proved that wind energy on the grid needs to be:

– balanced with energy from other plants, preferably quick-ramping CCGTs and OCGTs, to ensure grid stability and,

– that this balancing produces more CO2/kWh, more NOx/kWh, and more SOx/kWh (from coal plants on the grid), and uses more fuel/kWh with wind energy on the grid than without.

The balancing plants, usually consisting of quick-ramping gas turbines or hydro plants, would need to ramp down when wind energy surges and ramp up when wind energy ebbs to ensure a near-perfect balance of supply and demand is maintained on the grid. The balance needs to be maintained to minimize excessive frequency and voltage deviations from target values to avoid brownouts and blackouts and to avoid overloads.

The balancing plants would need to operate at a percent of rated output to be able to ramp up and down. Such operation is very inefficient for gas turbines and ramping up and down at a percent of rated output is even less efficient. This results in significantly increased Btus/kWh and increased CO2 and NOx emissions/kWh.

When coal plants are used as wind energy balancing plants, as is the case with Colorado and Texas, the rapid up and down ramping at part-load causes their combustion systems (designed for optimum, steady operation near rated output) to become unstable, and because the up and down ramping causes the chemical composition of the flue gas to vary, the scrubber-based air pollution control systems (designed for optimum, steady operation near rated output) also become unstable as the required stoichiometric chemical ratios cannot be maintained in a timely manner. The up and down ramping increases wear and rear of equipment and shortens useful service lives, just as with a car.


Public Service of Colorado, PSCO, owns insufficient gas-fired CCGT capacity for balancing wind energy on its grid. As a result PSCO is attempting to use its own coal plants for balancing for which they were not designed and for which they are highly unsuitable. The results have been significantly increased pollution and CO2, NOx and SOx emissions/kWh.

The heat rate of a coal plant operated near rated output it is about 10,500 Btu/kWh for power delivered to the grid. It is lowest near rated output and highest at very low outputs. If a plant is rapidly ramped up and down in balancing mode at a percent of rated output, its heat rate rises. See Pages 26, 28, 35, 41 of the Bentek study.

On Page 28, the top graph covering all PSCO coal plants shows small heat rate changes with wind power outputs during 2006. The bottom graph shows greater heat rate changes with wind power outputs during 2008, because during the 2006-2008 period 775 MW of wind facilities was added. For the individual PSCO plants doing most of the balancing, the heat rate changes are much higher.

On Page 26, during a coal plant ramp down of 30% from a steady operating state to comply with the state must-take mandate, the heat rate rose at much as 38%.

On Page 35, during coal and gas plant ramp downs, the Area Control Error, ACE, shows significant instability when wind power output increased from 200 to 800 MW in 3.5 hours and decreased to 200 MW during the next 1.5 hours. The design ramp rates, MW per minute, of some plants were exceeded.

On Page 41, during coal plant balancing across the PSCO system due to a wind event, emissions, reported to the EPA for every hour, showed increased emissions of 70,141 pounds of SOX (23% of total PSCO coal emissions); 72,658 pounds of NOX (27%) and 1,297 tons of CO2 (2%) than if the wind event had been absent.

Those increases of CO, CO2, NOX, SOX and particulate per kWh are due to instabilities of the combustion process during balancing; the combustion process can ramp up and down, but slowly. As the varying concentration of the constituents in the flue gases enter the air quality control system, it cannot vary its chemical stoichiometric ratios quickly enough to remove the SOX below EPA-required values. These instabilities persist well beyond each significant wind event.

PSCO does not release 1/4-hourly wind power generation data; its “proprietary”. Such information is critical for any accurate analysis and comparison of alternatives to reduce such emissions. PSCO deliberately withholding such information is inexcusable and harms progress regarding global warming.


The Texas grid in mostly independent from the rest of the US grids; the grid is operated by ERCOT. The grid has the following capacity mix: Gas 44,368 MW (58%), Coal 17,530 MW (23%), Wind 9,410 MW (12% – end 2009), Nuclear 5,091 MW (7%). Generation in 2009 was about 300 TWh. By fuel type: Coal 111.4 TWh, Gas CCGT 98.9 TWh, Gas OCGT 29.4 TWh, Nuclear 41.3 TWh, Wind 18.7 TWh.  Summer peak of 63,400 MW is high due to air conditioning demand.

Wind provides 5 to 8% of the average generation overall, depending on the season. Its night contribution rises from 6% (summer) to 10% (spring). Texas capacity CF = 18.7 TWh/yr/{(9,410 + 7,118)/2) MW x 8,760 hr/yr)} = 0.258. Texas has excellent winds and should have a statewide CF of 0.30 or greater. Explanations for the low CF likely are:

– grid operator ERCOT requires significant curtailment of wind energy to stabilize the grid.

– vendors, developers and financiers of wind power facilities, eager to cash in on subsidies before deadlines, installed some wind turbine facilities before adequate transmission capacity was installed to transmit their wind output to urban areas.

Much of the gas-fired capacity consists of CCGTs that are owned by IPPs (independent power producers) which sell their power to utilities under PPAs (power purchase agreements). That capacity is not utility-owned and therefore not available for balancing to accommodate the output of more than 10,000 MW of wind power facilities. Instead, utilities are attempting to use coal plants for balancing for which they were not designed. The results have been significantly increased pollution and CO2 emissions.

Unlike PSCO, ERCOT requires reporting of fuel consumption by fuel type and power generation by technology type every 15 minutes. The 2007, 2008, 2009 data shows rising amplitude and frequency of balancing operations as wind energy penetration increased. In 2009, the same coal plants were cycled up to 300 MW/cycle about 1,307 times (up from 779 in 2007) and more than 1,000 MW/cycle about 284 times (up from 63 in 2007). The only change? Increased wind energy penetration.

On Page 69:  The ERCOT balancing of plants to accommodate wind energy produced results similar to the PSCO system; increased balancing resulted in significantly more SOX and NOX emissions than if wind energy had been absent. Any CO2 emission reductions were minimal at best, due to the significantly degraded heat rates of the balancing plants. See websites.


A new report by Dr. Fred Udo, a Dutch engineer, describes his analysis of the CO2 emissions of the Irish electric grid, managed by EirGrid, which posts on its website 1/4-hour operations data of total electricity demand, wind energy and CO2 emissions on the Irish grid. Analysis of the data proves wind energy reduces the CO2 emissions by just a few percent.

For example:

During April 2011, 12% wind energy on the Irish grid reduces its CO2/kWh by 4%,

During April 1st and 2nd, 28% reduces it by 1%,

During April 3rd and 4th, 34% reduces it by 6%,

During April 4th, 5th and 6th, 30% reduces it by 3%,

The above reductions are not anywhere near to what is claimed by the PR of wind energy proponents.

The above variations of the CO2 percentages are largely due to the heat rates, Btu/kWh, of the combination of CCGTs and OCGTs selected by the grid operator during wind energy balancing. See website.

The fit lines of the scatter diagrams of CO2 intensity, gram/kWh, versus wind energy penetration, %, show increasing CO2/kWh as wind energy increases. Where the fit line intersects the Y-axis is the lowest CO2/kWh, i.e., no wind energy.

This appears entirely reasonable to power engineers who know the more their power generators are ramped up and down the less efficient they become. This means greater wind energy penetration produces greater up and down ramping amplitudes of wind energy to be compensated for by balancing plants and more balancing plant capacity is required to be in part-load, up/down ramping mode, which increases their CO2/kWh, and, according to the scatter diagrams of the Dr. Fred Udo report, the CO2/kWh of the entire grid.

Just as a car, if operated at 20 mph, then accelerated to 50 mph and back down again a few hundred times during a 24-hour trip would use more gas and pollute more, so would the balancing CCGTs and OCGTs, except gas turbines have even greater degradations of heat rates, Btu/kWh, when operating at part-load AND ramping than gasoline engines. The extra fuel consumed and CO2 emitted are so much that they mostly offset the fuel savings and CO2 reduction due to wind energy, according to analysis of the EirGrid data posted on its website

Note: Paste this URL in the left field of your browser window to access the site.

The following is a direct quote from the site of EirGrid:

“EirGrid, with the support of the Sustainable Energy Authority of Ireland, has developed together the following methodology for calculating CO2 Emissions.

The rate of carbon emissions is calculated in real time by using the generators MW output, the individual heat rate curves for each power station and the calorific values for each type of fuel used.

The heat rate curves are used to determine the efficiency at which a generator burns fuel at any given time.

The fuel calorific values are then used to calculate the rate of carbon emissions for the fuel being burned by the generator“

The heat rate degradation due to ramping down the fossil-fired plants with wind energy surges and ramping up with wind energy ebbs is not accounted for in the above calculation method; i.e., the gridwide CO2 emissions posted on the EirGrid website are understated, i.e., the above small reductions of CO2/kWh will likely disappear, or become increases.

This is devastating news for wind energy proponents who have been claiming more and more wind reduces CO2/kWh more and more, exactly opposite of the results of Dr. Fred Udo’s analysis of the EirGrid real time, 1/4-hour operations data.

Wind proponents made their claims without any substantiation based on 1/4-hour operations data. They could not have, because such data has been available only during the past 2-3 years.

The above results has very significant policy implications regarding the continued promotion of wind energy through various subsidizing schemes.

The above is only part of the story. The other part is capital costs.


The total capital cost of the wind turbine facilities (onshore about $2,000/kW, offshore about $4,200/kW), PLUS the capital cost of the new quick-ramping balancing plants required at higher wind energy penetrations (many grids do not have enough of such capacity), PLUS the capital cost of extensive grid modifications, including new HVDC lines on 80 to 135 foot-tall steel structures to transmit the wind energy from windy areas to population centers is about 2 to 3 times greater than the total capital cost of a capacity of 60% efficient CCGTs (about $1,250/kW) that would produce, in base-loaded mode, near rated output, the same quantity of energy, use about the same quantity of fuel/kWh and emit about the same quantity of CO2/kWh than the above (wind energy + balancing energy) combination, but do it at a much lower cost/kWh (see next paragraph), AND at minimal transmission system changes (the new CCGT plants would be located at or near the same sites as existing coal plants), AND at minimal impacts on quality of life (noise and infrasound, visuals, social unrest, psychological), property values and the environment.

See websites.

The US Energy Information Administration projects levelized production costs (national averages, excluding subsidies) of NEW plants coming on line in 2016 as follows (2009$) :

Offshore wind $0.243/kWh, PV solar $0.211/kWh (higher in marginal solar areas, such as New England), Onshore wind $0.096/kWh (higher in marginal wind areas with greater capital and O&M costs, such as on ridge lines in New England), Conventional coal (base-loaded) $0.095/kWh, Advanced CCGT (base-loaded) $0.0631/kWh.…


The above begs the question: If wind energy reduces CO2 by so very little/kWh, or not at all, or increases it, AND requires so much capital/MW to implement, AND produces energy at such a high cost/kWh, AND has such huge adverse impacts on quality of life (noise and infrasound, visuals, social unrest, psychological), property values and the environment, why are we, as a nation, making ourselves even less efficient relative to our competitors by this slavish, lemming-like pursuit of expensive wind energy?

Could it be that the Wall Street elites see the 30% federal cash grants, accelerated write-offs, generous feed-in tariffs and renewable energy credits as major tax shelters and long-term income streams for their high-income clients, all at the expense of the Main Street economy?

Wind energy proponents often use Denmark as the model to emulate. However, Denmark is in the fortunate position of having a large capacity of hydro plants of Norway and Sweden available for balancing wind energy; i.e., other grids with little or no hydro plants cannot use Denmark as a model.

Wind energy reduces the quality of life, health and psychological well-being of people who live near wind turbines. During the past 5 years, Denmark has stopped adding to its ONSHORE wind turbines for exactly these reasons.

Due to demonstrations by the Danes during at least the past 5 years, the government finally decided in August 2010 that any future wind turbines will be OFFSHORE and beyond the horizon. That is a huge admission on part of the Danish government. i.e., wind turbines near people have become an anathema in Denmark. A similar development is shaping up in the Netherlands.


The below article describes an economically and environmentally more attractive alternative to wind energy that is based on 60% efficient CCGTs.

The new “GE FlexEfficiency 50″ plant has a capacity of 510 MW and a 61% efficiency at rated output. Its design is based on a unit that has performed utility-scale power generation for decades. The plant fits on about a 10-acre site; i.e., minimal visual impact.

It is quick-starting: from a cold start, it reaches its rated output in about one hour. Its average efficiency is about 60% from rated output to 87% of rated output (444 MW) and about 58% to 40% of rated output (204 MW). It can be ramped at 50 MW/minute. CCGTs are usually not operated at less than 40% of rated output because of very high heat rates, Btu/kWh.

The GE unit is designed to efficiently produce electric energy in base-loaded mode and in daily-demand-following mode which implies 365 cycles per year.

Its high ramp rate enables it to also function as a balancing plant to accommodate the variable energy from wind turbine and solar facilities. However, such use would significantly increase wear and tear and shorten the useful service life of the units, because they would have to ramp up and down hundreds of times per day to follow the wind surges and ebbs.

See websites.

About Willem Post Willem Post, BSME New Jersey Institute of Technology, MSME Rensselaer Polytechnic Institute, MBA, University of Connecticut. P.E. Connecticut. Consulting Engineer and Project Manager. Performed feasibility studies, wrote master plans, evaluated and performed designs for incineration systems, air pollution control systems, utility and industrial power plants, and integrated energy systems for campus-style building complexes. Currently specializing in energy efficiency of buildings and building systems.

Battle to cut emissions likely to be fragmented

World Energy Council chief says regional trading platforms are most effective option

South China Morning Post – 29 August 2011

Global efforts to cut greenhouse gas emissions using market mechanisms are likely to see the formation of regional emission-trading platforms that will converge over time, according to World Energy Council secretary general Christoph Frei.

And a carbon tax, although quicker and easier to implement, was still a politically challenging way for governments to meet their emission reduction goals, Frei said.

World leaders are to meet in Durban, South Africa, in three months to negotiate a way forward and come up with solutions to fight climate change caused by rising emissions of greenhouse effect-causing gases from human economic activities.

A key issue to be discussed will be an alternative framework for countries to cement their commitments to emission reduction. The Kyoto Protocol, signed in 1997 and which binds some nations to emission reduction targets, is set to expire next year. Talks in Cancun, Mexico, last year yielded only a broad framework, with no binding agreement on emission cuts.

While pressure is high on politicians to iron out a global emissions deal soon, Frei, a Swiss national, said it would be a tall order and that a more fragmented system would be more likely in the short term.

“The most likely scenario is that regional trading platforms will be formed instead of a global one, out of sheer effectiveness,” he said.

But then such platforms were likely to slowly converge, he added.

Frei said that as some 80 per cent of the world’s greenhouse gas was emitted by the energy industry, it sorely needed clarity on future financial burdens stemming from their emissions, as well as incentives on their reductions.

“If we don’t have security for our investments, we will have a big problem,” he said.

Under the Kyoto Protocol, companies that exceed their emission quotas are allowed to offset their excess by “buying” credits from other emitters that are more efficient in cutting emissions. As it is more cost-effective to cut emissions in developed nations, companies there tend to be the buyers and those in developing ones are usually sellers.

China and other developing countries are exempt from the emission limits. The United States opposed that exemption and has never ratified the treaty.

Europeans, the main buyers of the credits, have set up a sophisticated carbon credits trading platform, drawing experience from the US trading of sulphur dioxide emissions.

Given that more countries will voluntarily commit to carbon emissions reduction, Frei sees the establishment of national or regional exchanges for the trading of emission credits.

“Emissions trading is the most effective way, theoretically, to deal with emissions reduction,” he said. “The government does not decide on the winners and losers, they are decided by the market.”

Although carbon tax, another popular way to incentivise the reduction of emissions, is simple, transparent, and more predictable compared to emissions trading, he said taxes were never popular.

Mainland dams accused of carbon credit scams

smokestackLast updated: April 7, 2010

Source: South China Morning Post

Environmental lobby group International Rivers has condemned the emergence of trade in fake carbon credits and says the biggest source is hydroelectric power projects on the mainland.

Under what is known as the Clean Development Mechanism (CDM) of the Kyoto Protocol, industrialised countries can support projects that decrease emissions in developing countries and then use the resulting emission reduction credits towards their own reduction targets.

But International Rivers says the CDM is “failing miserably and is undermining the effectiveness of the Kyoto Protocol” because most of the emission reduction credits are fake and come from projects that do not reduce emissions.

It says hydropower projects constitute a quarter of all projects in the CDM pipeline, and 67 per cent of these, or about 700 projects, are on the mainland.

However, International Rivers says there has been no substantial jump in hydropower development to match the large number of supposedly new projects applying to generate CDM credits.

The CDM recently withheld approval of carbon credits from numerous mainland dams and wind farms.

Controversy over the Chinese dams recently led the European Climate Exchange (ECX), the world’s leading market for trading carbon credits, to renew its ban on large hydropower Certified Emission Reductions (CERs), which are carbon credits issued by the CDM executive board.

The European Union is the biggest buyer of CERs, while China sells 70 per cent of the world’s CERs.

Dams built before applications are made for carbon credits are deemed not to contribute to reducing carbon emissions and thus should not qualify to sell carbon credits. Such dams are called “business-as-usual” in the industry jargon.

“There are blatant cases of hydro plants being business-as-usual, whereas other hydro projects seem to really require CDM credits,” Axel Michaelowa, a founding partner of the CDM consultancy Perspectives and a researcher at the University of Zurich, Switzerland, said.

The accuracy of assessments of the eligibility of mainland dams for carbon credits is distorted by questionable data, Michaelowa said.

“Many hydro plants in China use an artificially low utilisation rate for the calculation of their profitability. The regulators have also discovered some hydro projects reported a very low electricity tariff, lower than coal power plants and other hydro projects in the same province.

“Such projects are now increasingly being rejected.”

At a meeting of the CDM executive board in February, 38 mainland dams failed to get carbon credits. The board also decided to review 36 wind projects in China, Katy Yan, a campaign assistant with International Rivers, wrote in her blog.

“These 74 projects hope to produce almost 38 million carbon credits by 2013,” worth about US$600 million, she said.

“The problem is very serious,” Patrick McCully, executive director of International Rivers, said. “Dams are the largest single project type in the CDM. Almost all are likely projects that would have been built anyway regardless of receiving credits, meaning that any credits they generate are fake.”

A World Commission on Dams report has set guidelines that determine whether a dam qualifies to sell carbon credits.

By March 6, 16.32 million CERs had been issued for 132 dams, and China accounted for 71.52 per cent of the 653 large hydropower projects in the world that have been registered or are seeking registration under the CDM to sell CERs, according to International Rivers. A large hydropower project is defined as one with a capacity of more than 15 megawatts.

On March 24, ECX announced it would renew its ban, imposed in 2008, on contracts with large hydro CERs, ECX market development director Sara Stahl said. “We have always excluded large hydro because it’s a grey area,” she said.

Two types of carbon credits are traded on the exchange: CERs and EU allowances, which are carbon credits issued under the EU Emissions Trading Scheme. Since trading at ECX began in 2005, trading of carbon credits and related instruments has soared.

Last year, the value of ECX’s trades surged 82 per cent year on year to €68 billion (HK$708.4 billion).

ECX’s renewal of its ban on large hydro CERs came about after discussions with its members, which include more than 100 large multinational companies, this year, Stahl said. “We felt there were some legitimate criticisms,” she said. “Companies are nervous about it.”

Michaelowa said there was concern that some Chinese dams had required the resettlement of the local population without proper compensation and about whether large hydro plants are sustainable.

In December 2008, an International Rivers press release alleged that German utility RWE, one of the biggest carbon dioxide emitters in Europe, planned to buy carbon credits from the Xiaoxi dam in Hunan – which failed to meet World Commission on Dams guidelines – and that would be a breach of EU law.

On a site visit, International Rivers found 7,500 people had been evicted to make way for the Xiaoxi dam without proper compensation, which violated the World Commission on Dams guidelines. Xiaoxi is one of at least 11 Chinese large hydropower projects from which RWE was buying credits. TUV SUD of Germany was auditor for the project.

At a CDM executive board meeting in March, the board suspended TUV SUD from auditing hydro projects, as it had approved dams that were later found to have problems. Another carbon credit auditor, Korea Energy Management Corp, was partly suspended.

“The fact that only a few of the projects validated by TUV SUD have been rejected is proof of the quality of TUV SUD’s activities,” Heidi Atzler, a TUV SUD spokeswoman, said.

An RWE spokeswoman, Julia Scharlemann, said every CDM project in which RWE was involved was “thoroughly reviewed” by an independent auditor, and RWE adhered to German Emissions Trading Authority rules, which were more rigorous than CDM processes and the standards of other EU nations.

RWE bought carbon credits only from projects approved by the United Nations Framework Convention on Climate Change, she added.

Michaelowa admitted CDM’s process of approving dams was imperfect, with room for improvement, while McCully said the best solution would be to scrap the CDM and the whole concept of international carbon offsetting entirely.

“If that is not possible, then ban hydropower from CDM,” he said.

Clearly inadequate

wind farm

Last updated: March 14, 2010

Source: South China Morning Post

Power firms plan to pump HK$10b into wind farms, but they’ll do little to make the city greener or its skies cleaner

Updated on Mar 14, 2010

Hong Kong’s two power companies are planning to spend HK$10 billion on offshore wind farms, but it will do little to reduce carbon emissions or clean the air, environmental scientists say.

CLP Holdings, Hong Kong’s largest power company, plans to build what will be one of the biggest offshore wind farms in the world – generating 200 megawatts a year – at a cost of almost HK$7 billion.

The wind farm, located 10 kilometres off Sai Kung and comprising 67 wind turbines 120 metres high, will produce less than 1 per cent of Hong Kong’s electricity output and reduce its carbon dioxide emissions by 1.4 per cent.

Meanwhile, Hongkong Electric Holdings recently submitted an environmental impact assessment for a HK$3 billion wind farm to be built between Lamma Island and Cheung Chau that would generate 100MW of power – enough for 50,000 households.

The government has already passed the impact assessment for CLP’s wind farm, but the Hongkong Electric project is still awaiting approval.

Hongkong Electric says the project would produce the equivalent of 1 to 2 per cent of its current electricity output for the city – about 0.25 to 0.5 per cent of Hong Kong’s total electricity consumption.

The company says the project would enable it to reduce the amount of coal it burns by 62,000 tonnes a year and as a result reduce its carbon dioxide emissions by 150,000 tonnes a year.

Hong Kong generated 43.4 million tonnes of emissions in 2007, according to the International Energy Agency. That means Hongkong Electric’s wind farm would cut the city’s CO2 emissions by 0.4 per cent. So, for about HK$10 billion, the two wind farms would produce at best about 1.5 per cent of Hong Kong’s electricity and reduce its carbon dioxide emissions by less than 2 per cent.

“If people believe that wind farms will make a serious contribution to reducing Hong Kong’s carbon emissions, they are misinformed,” says Bill Barron, who teaches in Hong Kong University of Science and Technology’s environment department.

Although carbon dioxide is a greenhouse gas, it is invisible and does not contribute to Hong Kong’s dirty air. At the atmospheric level, as opposed to street level, the city’s air is polluted by regional smog, which the Environmental Protection Department says is caused by emissions from transport and power stations in the Pearl River Delta and Hong Kong.

Most of the locally generated pollution is produced by the two power companies – the worst pollutants being sulphur dioxide and nitrogen oxides, neither of which are listed in the Kyoto Protocol as greenhouse gases. They are considered local pollutants.

Hong Kong and the Guangdong provincial government in April 2002 reached a consensus to reduce sulphur dioxide, nitrogen oxides, respirable suspended particulate and volatile organic compounds in the Pearl River Delta by 40, 20, 55 and 55 per cent, respectively, from 1997 levels by 2010, These are the government’s main emissions targets.

Hongkong Electric says that as a result of burning less coal, its wind farm would reduce emissions of sulphur dioxide and nitrogen oxides by 520 and 240 tonnes, respectively. Based on Hong Kong’s 2007 emissions, this would amount to a reduction in emissions of sulphur dioxide and nitrogen oxides by 0.8 and 0.25 per cent respectively. CLP says its wind farm will reduce sulphur dioxide by 54 to 60 tonnes, and nitrogen oxides by 394 to 440 tonnes.

In total, Hong Kong’s wind farms would reduce sulphur dioxide emissions by about 0.8 per cent and nitrogen oxides by about 0.7 per cent.

So why are Hong Kong’s power companies spending so much money on projects that will have a negligible effect on the city’s carbon footprint and air quality?

The wind farms are in part a response to the target set out in the government’s First Sustainable Development Strategy for Hong Kong, released in 2005.

This report – produced by the Council for Sustainable Development, whose chairman was the then chief secretary, Donald Tsang Yam-kuen – called for 1 to 2 per cent of Hong Kong’s electricity to be generated by renewable energy by 2012.

But the power companies are not legally bound by this government target.

The other key driver for the power companies to build offshore wind farms in Hong Kong is the scheme of control, the regulatory framework which governs them.

Unlike most developed countries – which have open and competitive arrangements for the production and distribution of power – Hong Kong still clings to the scheme of control system introduced in the 1960s that allows the city’s power companies to operate as two separate monopolies.

Around the same time, the government also granted monopoly franchises to the bus, power and telecoms sectors. Hong Kong’s economy was developing fast, and the government wanted to encourage badly needed investment in electrification in order to support growth.

It wanted to guarantee a stable power supply and provide incentives to power companies to make long-term investments in Hong Kong.

The scheme turned Hong Kong’s electricity market into one of the most profitable in the world. The scheme is reviewed and renegotiated every 10 to 15 years. The current scheme of control began last year.

The previous scheme permitted the power companies to earn an annual rate of return on depreciated net assets of 13.5 to 15 per cent – double the rates of markets such as Australia and Britain.

Before the previous scheme of control expired in October 2008, the idea of abandoning the scheme was floated, along with introducing third-party competitors from the mainland.

At the same time, power companies came under fire from business, which said the utilities charged too much for their power compared with other countries. The utilities were also blamed for their perceived part in air pollution, which became a subject of serious concern within the community around 2004.

These factors helped the government to negotiate the current scheme of control on less favourable terms for the power firms.

It will run for 10 years rather than 15 and has a lower permitted rate of return – 9.99 per cent – on assets that use conventional resources such as coal and gas to generate electricity.

The current scheme also differs from its predecessor in that it allows a return of 11 per cent on renewable energy assets and includes financial incentives for exceeding emission targets or fines for failing to reach them.

But the scheme of control’s key characteristic remains – it encourages power companies to overinvest in assets. The more assets a company has, the more it is allowed to earn.

“Under the scheme of control they can gold-plate the power station, which is why we have so much excess generating capacity,” says Simon Powell, head of sustainable research at CLSA.

The result is that Hong Kong has a Rolls-Royce power supply, with the companies maintaining 50 per cent more capacity than needed to meet peak demand.

So Hongkong Electric has peak demand of 2.5 gigawatts but has the installed capacity to produce 3.7GW of electricity, while CLP has peak demand of 6.5GW and a capacity of 13.6GW.

The power plants run at about 55 per cent of their capacity.

That means Hong Kong has a highly robust power supply and rarely suffers blackouts. It also means that its tariffs are somewhat higher than places such as Singapore and Britain, but cheaper than Tokyo.

So Hong Kong’s power companies have no need for additional generating capacity and CLP on occasion sells power to the mainland from its Hong Kong plants.

However, the lower permitted returns under the current scheme of control have resulted in significantly lower earnings for the power companies. CLP’s 2009 net profit fell by 12.9 per cent to HK$8.5 billion. Earnings from its Hong Kong business fell 21 per cent, despite a 1.7 per cent increase in local sales. Hongkong Electric’s 2009 net profit declined 17 per cent to HK$6.7 billion from HK$8.03 billion in 2008.

Building wind farms offers power companies a modest increase in assets while generating a good rate of return.

The cost of producing 1MW of electricity from offshore wind farms is three to five times the cost of producing 1MW from coal, which, from a scheme of control perspective, makes them attractive.

“From an internal rate of return perspective, wind farms are a very profitable proposition,” Powell says.

While wind farms would boost the firms’ earnings, some analysts say it is unlikely tariffs would also rise, which adds to the appeal since it reduces the likelihood of public and Legislative Council criticism and increases the chances of government approval.

Other experts are not so sure.

Pierre Lau, managing director and head of Asia-Pacific Utilities Research with Citi, estimates Hongkong Electric’s capital investment will increase from HK$48 billion to HK$51 billion by the end of 2015, even without building the wind farm.

“Before calculating the wind farm investment, the additional capex [capital expenditure] will allow Hongkong Electric to increase tariffs by about 5 per cent,” he said.

“If we include the HK$2.5 to HK$3 billion wind farm project, there can be another 6 per cent rise in electricity costs.”

Hongkong Electric spokeswoman Elaine Wong would not say whether the company would raise tariffs in the next few years. She said spending on the wind farm would occur in phases so the impact on tariffs would be limited. “In addition, as no fuel will be required, costs should be saved,” Wong said.

The Environment Bureau said it had not yet received an investment proposal from Hongkong Electric, but the government would consider a range of factors – including environmental impact, tariffs, renewable energy policy and economic benefits – in making its decision on the wind farm.

“It is our objective to promote wider use of renewable energy while protecting consumer interests,” the bureau said.

While some are cynical about the motives of the power companies, analysts say they are behaving in the best interests of their shareholders.

“They are following the price signals and policy targets set by the government,” says Stephen Oldfield, a utilities analyst with UBS.

Critics say the government’s renewable energy targets are little more than window dressing in response to criticism that it is doing little to move Hong Kong in the direction of a sustainable economy in a world moving increasingly in this direction.

“They [wind farms] look good in brochures and improve the government’s image when it speaks at international forums,” one analyst said.

Others are more charitable towards the government, saying it is not in a position to do much given that Hong Kong does not have much space for large solar panels, or have lots of agricultural waste for generating biomass power.

“If you want a renewable energy target then building some offshore wind farms is probably the best you can do in Hong Kong,” Oldfield says.

But analysts say that if the government is serious about reducing emissions it needs to do more than build a few wind farms. Most believe this means speeding up the replacement of coal with gas-fired power stations. Natural gas produces half the CO2 and nitrogen oxides emitted by coal burning and produces hardly any sulphur dioxide.

But it is roughly twice the price of coal. The higher fuel costs, together with the cost of installing gas turbines or retrofitting coal-fired turbines, will put more upward pressure on tariffs.

Arguably, Hong Kong has been slow to do what Europe has done in moving to gas as a base load supply and using coal for peak requirements. But there have been concerns over the reliability of supply in Hong Kong.

CLP, which steadily reduced its emissions of pollutants in the 1990s, had to increase coal generation after it became concerned that the gas reserves on which it relied from a field off Hainan were being depleted faster than expected.

Analysts say there is now ample supply, with Hongkong Electric already getting supplies via a pipeline from southern China. CLP will also start getting gas piped in from the mainland for its Castle Peak power station over the next few years.

But the cleanest power from an air pollution perspective is nuclear, since it produces near zero emissions.

In September last year, the government approved the extension of CLP’s contract with the Guangdong Daya Bay nuclear power station for another 20 years.

Under the current contract, which expires in 2014, CLP receives 70 per cent of the power station’s output – about one-third of CLP’s power supply and about a quarter of Hong Kong’s total consumption.

It is possible Hong Kong could get electricity from future nuclear power stations being built on the mainland.

The combined generating capacity of both companies is currently 65 per cent coal and 25 per cent gas. But given overcapacity, the actual breakdown is different.

The power firms are also in the process of fitting scrubbers to their coal-fired units, which reduce emissions of pollutants such as sulphur dioxide and nitrogen oxides but increase carbon dioxide emissions since they use more fuel.

It is clear that Hong Kong does not need the additional capacity of wind farms and that replacing coal with gas or nuclear power would be significantly more effective than wind in cutting carbon emissions.

Some analysts say the scheme of control should have been restructured to give power firms a higher rate of return for using gas instead of coal. Hong Kong-based think tank Civic Exchange said in its analysis of the current scheme of control that the government has failed to deliver an integrated energy policy. “As a result, it is unclear how the revised scheme of control will support other policy initiatives,” Civic Exchange said. “This represents a missed opportunity in terms of ensuring that the electricity companies are rewarded for supporting goals that are important to Hong Kong society.”

But radical changes to the scheme of control and the way power firms operate are difficult for the government to enact since they involve taking on vested interests such as the Kadoorie family that controls CLP and Li Ka-shing, who controls Hongkong Electric.

Barron is unimpressed with the government’s commitment to renewable energy and emissions reduction. He says green credibility is much easier to get via the power firms than by, for example, requiring lower plot ratios or spaces between buildings for land sales. “I don’t see them, for example, planning infrastructure for a warmer climate and more expensive energy,” he said. “That’s too big a step for them because they can’t be bothered yet to be doing that.”

Written by Howard Winn and Vivian Kwok

Emissions rise, but CLP vows to meet targets

emissionsLast updated: March 11, 2010

Source: South China Morning Post

CLP Power emitted more air pollutants and greenhouse gases last year as a result of more coal burning, but was confident of meeting the more stringent emission targets this year.

The city’s largest electricity supplier still complies with the 2009 emission caps set by the Environmental Protection Department, though the emission of three main air pollutants – nitrogen oxides, sulphur dioxide, and particulate mattergrew by 6 per cent, 20 per cent and 30 per cent respectively last year.

The carbon dioxide released by local power generation also rose by 6 per cent, to 19 million tonnes.


Coal has large carbon footprint


I refer to the article (“Dirty reality behind solar power”, September 10) and the subsequent clarification (September 16).

It was asserted that the energy produced from burning coal directly is more than the energy generated by a polysilicon solar panel manufactured by using the same amount of coal.

This way of comparing different methods of electricity generation is incomplete as it does not compute the carbon footprints of the two methods of electricity generation. A more commonly accepted way of making such comparisons among the international science community is to make reference to the life cycle of CO2 emissions of different electricity generation systems. This is known as the life cycle inventory analysis.

The technical details are contained in the note entitled “Carbon footprint of electricity generation” published by Britain’s Parliamentary Office of Science and Technology. Carbon footprint is defined as “the total amount of CO2 and other greenhouse gases emitted over the full life cycle of a process or product, expressed as grams of CO2 equivalent per kilowatt hour of generation”.

All electricity generation technologies emit CO2 at some point during their life cycle. None are entirely carbon free. However, according to the “life cycle inventory analysis”, published in October 2006, the conventional coal combustion electricity generation system in Britain had the largest carbon footprint, more than 15 times that of a solar energy electricity generation system (the British photovoltaic, PV, power systems using crystalline silicon). Furthermore, the carbon footprint of PV cells would be reduced with thin-film technologies using less silicon and other new semi-conducting materials.

Different thin-film PV technologies are active areas of applied research supported by the Innovation and Technology Commission, conducted at the Nanotechnology and Advanced Materials Research and Development Centre in Hong Kong.

Yue On-ching, science adviser, Innovation and Technology Commission

Dirty reality behind solar power – Making panels to tap sun’s energy is polluting and wasteful

Stephen Chen – SCMP

A beaming Tony Blair posed for television cameras holding a sleek, shiny solar panel as smiling officials and film star Jet Li looked on. They announced an ambitious plan to bring modern, clean power to the world’s poor.

In the next five years, the programme would bring solar-powered street lamps to 1,000 villages in China, India and Africa, where people are so poor they still do not generate any of the greenhouse gases blamed for global warming. The plan was announced at a factory in Guizhou in southwestern China – one of its poorest provinces.

But would Blair, the former British prime minister, and Li have been smiling if they had known a factory must burn more than 40kg of coal to produce the panel – one metre by 1.5 metres – they were holding?

Forty kilograms might not sound much. But even the country’s least efficient coal-fired power plant would generate 130 kilowatt-hours of electricity burning that amount – enough power to keep a 22 watt LED light bulb beaming 12 hours a day for 30 years. A solar panel is designed to last just 20 years.

Jian Shuisheng , a professor of optical technology at Beijing Jiaotong University, estimates it takes 10kg of polysilicon to produce a solar panel with a capacity of one kilowatt – just enough to generate the energy to keep a fridge cool for a day. To make that much polysilicon on the mainland would require the burning of more than two tonnes of coal. That amount of coal could generate enough electricity to keep the fridge running for two decades.

Like Blair and Li, many consumers, as well as corporations, in developed countries are buying mainland-made solar panels in the belief that using them will help slow the pace of global warming. Demand for solar panels has risen rapidly in the past few years, creating a US$100-billion-a-year market for panels and related industrial materials.

Five years ago, mainland production of polysilicon – the key component of solar panels – was negligible. Today, it is the world’s leading producer of the material, and last year churned out 4,000 tonnes – 80 times as much as in 2004. This year the government expects output to soar to 30,000 tonnes and projects that by 2011 it will reach a jaw-dropping 150,000 tonnes.

At least 16 provinces began building 33 polysilicon production plants last year, newspaper the 21st Century Economy Review has reported.

But far from saving the world, the production of solar panels is aggravating pollution and adding to energy consumption. Mainland government officials have known this for years, but not until the global economic crisis made a big dent in demand for solar panels did they openly admit that the “green business” could be dirty sometimes – and seek to regulate the market.

Such hasty expansion is not confined to the production of solar panels. From installing wind power to the production of vehicles running on alternative fuels, bubbles exist throughout the new-energy sector.

Senior officials at the National Development and Reform Commission, the key economic ministry, have spoken many times of the need for higher entry barriers – from curbs on bank lending to more frequent environmental checks – to prevent firms and local governments rushing into the sector and avoid overexpansion.

But their warnings went unheeded: many provinces are already building some of the world’s biggest solar power projects. And they will not stop, because they have invested more than 100 billion yuan (HK$114 billion) in the projects.

Polysilicon is greyish, crystallised pure silicon; more than 90 per cent of solar panels on the market contain it.

Dr Dang Qingde , deputy head of the department of labour safety of the Centre for Disease Control in the city of Leshan in Sichuan , measured the amount of toxic chemicals in the air at a polysilicon plant in September 2007.

Leshan is one of a handful of cities to have imported polysilicon production lines from overseas. The plant in the city is capable of producing 1,500 tonnes of polysilicon a year. The factory is clean and quiet. Grass and trees grow between its buildings.

Using a hand-held device, Dang found more than 10 poisonous substances – from ammonia, the effects of which are relatively mild, to the lung-eating trichlorosilane – but all at levels within the safe limits decreed by Beijing. Nevertheless, he wrote a report in which he rated the workplace “highly hazardous”.

“A shiny polysilicon plant is like a shiny bomb. It may look clean and innocent, but you don’t want to have one in your neighbourhood,” he said.

What made Dang nervous was the presence of chlorine. The chemical is used at almost every stage of the manufacturing process.

Chlorine can not only turn your blood into hydrochloric acid, but also interact with other chemicals – such as silicon – to form more deadly poisons, he found.

Dang published his findings in an academic journal, despite opposition from the plant’s management, in the hope it would draw the attention of others to the environmental issues in polysilicon production.

“I have prayed for heaven’s blessing to save our workers and residents in the neighbourhood,” he said.

Since the first polysilicon factory opened in Leshan, more have followed. Now it is one of the biggest polysilicon production centres on the mainland. Output rose by more than 300 per cent in two years. To Dang’s relief, this has not led to calamity.

Still, that is not the case elsewhere. Emissions from the Huafu Silicon Company’s plant in Liancheng county, in the southeastern province of Fujian , polluted the air and water in a village, causing violent clashes with farmers. The company says the pollution was accidental. There will be more such cases because mainland factories are using old-fashioned, energy intensive and highly polluting equipment, says Jian, the Beijing Jiaotong University professor, who is a member of the Chinese Academy of Sciences.

Extracting pure silicon is a tedious business, the professor said. In the 1950s, engineers at German engineering giant Siemens discovered that by putting hydrogen, chlorine and raw silicon in an oven and heating them up until they vaporised, they could get rid of some unwanted chemical elements. They repeated the process until they got 99.9999999 per cent pure polysilicon – just pure enough to make solar panels. Half a century later, most of the polysilicon makers in the world still use this method.

The professor described what happened to the polysilicon after that. A very fine length of wire is used to slice a block of polysilicon into very thin pieces. But they are not yet thin enough. The polysilicon sheets are sanded down until they are 200 micrometres thick – a process that turns 40 per cent of the polysilicon into waste that cannot be recycled.

Dr Wan Gang , minister of science and technology, said the mainland was burning a lot of coal to produce solar panels for Western countries. “Developed countries get clean air and the reputation of a carbon-free economy, while pollution and greenhouse gas emission are chalked up to our account,” Wan said. “That’s a bit unfair.”

According to Jian’s calculations, almost 30 million tonnes of coal, or more than 1 per cent of the mainland’s output of coal last year, will be needed to keep the ovens of all the polysilicon plants hot.

With production expanding and demand falling, the price of polysilicon is collapsing. A kilogram sold for US$350 last year; this year the price has dropped to US$70 – barely enough for the factories to pay their power bills.

Faced with the prospect of the mainland’s polysilicon industry collapsing, Premier Wen Jiabao issued an urgent order two weeks ago for production capacity to be reduced. But most people in the industry think this action has come too late.

People’s Daily published a story last week about a plan to build Asia’s biggest solar power plant in Yunnan province . It will have a capacity of 166 megawatts. If two tonnes of coal is needed to produce a one-kilowatt solar panel, how big will the plant’s carbon footprint be?

Study urges greenhouse gas caps, peak in 2030

Reuters in Beijing

China should set firm targets to limit greenhouse gas emissions so they peak around 2030, a study by some of the nation’s top climate change policy advisers has proposed ahead of contentious talks on a new global warming pact.

The call for “quantified targets” to cap greenhouse gas pollution marks a high-level public departure from China’s reluctance to spell out a proposed peak and date for it.

“By last year China had become the world’s biggest national emitter of greenhouse gases and faces unprecedented challenges,” says the preface of the 900-page report, setting aside China’s reluctance to say it has passed the United States as the top emitter of carbon dioxide, the main greenhouse gas from burning coal, gas and oil.

“As soon as possible, study and draft relative and [then] absolute targets to cap the total volume of carbon dioxide emissions,” says the preface of the report, obtained by reporters.

“Establishing and acting on quantified targets and corresponding policies to address climate change in the medium to long-term is already a matter of great urgency.”

The 2050 China Energy and C02 Emissions Report proposes that, with the right policies, emissions growth could slow by 2020, with levels peaking around 2030.

If China can reach these goals, by 2050 its carbon dioxide emissions from fossil fuel “could fall to the same emissions levels as in 2005 or even lower”, the report says.

The report in Chinese is on open sale and builds on earlier research exploring pathways to a “low-carbon” economy. It adds to recent signals that Beijing wants to play an active role in seeking agreement for a new international climate change pact.

With its fast-rising greenhouse gas emissions, Beijing’s stance will be crucial in efforts to create a successor to the current Kyoto Protocol, which expires at the end of 2012.

Western nations have pressed Beijing to set specific goals on slowing emissions growth in coming years, leading to early cuts in absolute volumes as part of a new pact governments hope to seal in Copenhagen by the end of this year.

Under current treaties, China and other developing countries need not shoulder the quantified limits on emissions that rich economies must take on.

Beijing has said that principle must not change and resisted specifying when its emissions may peak, pointing out its average emissions per person remain much lower than the average in rich nations.

But the airing of proposals for emissions caps comes after signs that Beijing has become more open to stronger steps against global warming as negotiators struggle to build agreement before Copenhagen.

Early this month, China’s ambassador to the climate talks, Yu Qingtai, said his government wanted to curb greenhouse gas emissions as soon as possible.

“This report is intended to advise the Chinese government what its options are,” said Deborah Seligsohn, China programme director with the World Resources Institute, a Washington-based organisation promoting policies to fight global warming.

“I think they’re making a pretty concentrated push to move the negotiations forward,” said Mr Seligsohn.

The dozens of contributors to the report included climate policy experts from leading Chinese state think-tanks, including the Energy Research Institute and the State Council Development Research Centre, which advises the cabinet.

Participating scholars stressed that the study was a research exercise, not a definitive policy blueprint, and there was no suggestion that the senior officials listed as its advisers endorsed its specific proposals for targets and a 2030 peak.

But the proposals in the report have been circulated among officials and were echoed in a cabinet meeting last week that urged making “controlling greenhouse gas emissions” an important part of development plans, said an expert familiar with the project, speaking on condition of anonymity.

“I think this report reflects a growing consensus among domestic experts favouring more active steps against climate change, with a peak by 2030,” said Wang Yi, an expert at the Chinese Academy of Sciences who participated in the study.

The report spells out possibly disastrous consequences of global warming, as growing amounts of human-caused greenhouse gases retain more of the sun’s energy in the atmosphere.

“The potential threat to China from climate change exists and it is massive,” states the report, warning of worsening droughts and floods, retreating glaciers, shrinking farm productivity and threats to water supplies for the country of 1.3 billion people.

To curb emissions, China could push financial steps and price reforms to favour clean energy, a “carbon tax” on fossil fuels, emissions targets for local governments and cautious steps towards a “cap-and-trade” system for buying and selling emissions rights, says the report.

Beijing may seek to use such domestic initiatives to show other nations it is serious about fighting global warming, even if the steps are not directly included in any international pact.

“The problem now is not China making its own domestic commitments and targets, it’s how we treat those commitments internationally,” Dai Yande, a deputy director of the Energy Research Institute and one the report’s organisers, told reporters.