China Comment

Energy, Environment, and Economy

China’s Coal (Part II): Alternatives

Coal accounts for over 70% of China’ energy mix, whereas in the United States, coal is 44% of the energy mix. Below I analyze several reasons why China has such high coal requirements as a percentage of its energy supply and I attempt to explain why China’s coal requirements may remain high for a long time to come.

Just how fast are China’s coal demands rising? According to a study, “offsetting one year of recent coal demand growth of 200 million tonnes would require 107 billion cubic meters of natural gas (compared to 2007 growth of 13 BCM), 48 GW of nuclear (compared to 2007 growth of 2 GW), or 86 GW of hydropower capacity (compared to 2007 growth of 16 GW).” (Lawrence Berkeley National Lab. Study)

(See Part One of this series on China’s Coal and a chart comparing China’s energy use to the United States’ Here).

China has trouble diversifying energy supply sources because it lacks significant natural gas supplies, it is starting from a very low base in installed nuclear power plants, and because of other renewable energies’ technical limitations.

1. China’s Lack of Extensive Natural Gas Supplies

Natural gas provides over 20% of US energy, but China has much less natural gas reserves than are available in the US. The US has 79 trillion cubic meters estimated natural gas reserves, whereas China has 22 trillion cubic meters. (EIA). Natural gas only accounts for 3.5% of China’s total energy supply and it is unlikely that Chinese natural gas utilization will increase to anywhere near the levels that it is used in the United States.

Natural gas generally burns cleaner than coal, so use of natural gas is desirable from both a carbon and a sulfur emission point-of-view. “[I]n 2011, China [hopes to]… raise the ratio of natural gas in its total primary energy consumption by 1 to 2 percentage points. . . . Using natural gas … as opposed to coal, could reduce carbon dioxide emissions by 130 million tons a year and sulfur dioxide emissions by 1.44 million tons a year.”( China’s LNG.)

Still, much of China’s natural gas has a high sulfur content, which makes it expensive to produce in a usable, or clean form. However, unconventional gas reservoirs may increase China’s future output. Not all unconventional resources, however, are included in estimations of producible reserves (such as those given above). “[L]ow permeable gas, coal bed methane, and shale gas are each respectively estimated at 100 trillion cubic meters, 30 trillion cubic meters, and 100 trillion cubic meters.” (China Coal Resource, Sept 2009)

Even fast-increasing development of unconventional gas resources will only marginally affect coal’s dominance of China’s energy supply. A 2005 Oxford study determined that “the share of natural gas in the primary energy supply is predicted to rise no higher than 10 per cent by 2020, even in the most optimistic scenario in which natural gas use is significantly promoted.”

Realizing that its domestic resources may not be enough to guarantee sufficient natural gas supply, China has also planned natural gas pipelines to surrounding countries to import gas. China also constructed several LNG (liquid natural gas) terminals (The Guardian, Watts, 2006; see also p3 Oxford Energy Study for a map of planned LNG terminals as of 2005).

(A more in-depth study on the future of China’s natural gas industry is deferred until another article).

2. China’s Coming Nuclear Additions

Nuclear accounts for 20% of US capacity. China has plans to increase their nuclear capacity from ~1.3% of China’s current energy mix to 5% by 2020. Despite plans to construct the most nuclear plants of any country in the upcoming ten years (and subsequently demanding a great deal of uranium), China will find it difficult to quickly displace coal’s dominance of China’s energy supply.

The United States has over 104 nuclear reactors, built over a thirty-year period. Prior to 2002, China had less than three operating nuclear power plants. Today, China has 11 nuclear facilities and plans to construct at least 20 in the next 10 years. But even with a significant building program, it may not be in China’s energy security interest to rapidly increase its percentage of nuclear power. If a massive nuclear-buildout occurs, large quantities of uranium will need to be imported, and engineers will need to be rapidly trained. A more gradual increase in nuclear capacity may be in China’s best interest rather than a break-neck development speed.

3. China’s On-line Wind Capacity And Renewables

Wind and renewables have steadily increased as a percentage of China’s energy mix, rising from 0.06% of China’s energy mix to 1.3% from 2006 to 2008. Additionally, hydroelectric power capacity has grown significantly in the past three years. “In 2008, the country added 20.1 GWe of hydro capacity” (World Nuclear Ass.)

There are limits to how much any country can depend on renewables, however. Engineers I have spoken with claim that an energy grid can only handle a maximum of around 25% of its power from wind. Wind is a variable source and needs scaling units (other energy sources that can turn on when wind is not blowing) to balance wind’s output. Wind’s average capacity utilization factor is only around 31%. In comparison, Combined Cycle Gas, Nuclear, and Coal steam turbines all rated capacity factors above 40%, according to the Nuclear Energy Institute.

Given current technology, at the most, wind could only account for about a fourth of China’s energy mix- and subsequent developments in battery storage or natural gas scaling units are required to make wind economically viable and reliable. (See China’s Dirty Wind for more on wind and scaling). (See “Capturing the Wind” by the House Research Organization for the Texas House of Representatives for an estimate of  the maximum amount of wind that can be integrated onto the grid using existing technology without radical alterations– 15GW; as of 2007 Texas already had nearly 5GW of wind online- which was only about 2% of the state’s energy supply.)

4. Hydroelectric Power

Hydroelectric power has been met with some controversy in China. Although there are environmental concerns, property takings concerns, and rainfall has declined, hydroelectric has a lot to offer China. Over 37 GW of hydroelectric capacity was added in China between 2004 and 2007. An additional 20.1 GW of capacity was added in 2008. China’s total potential hydroelectric rating is one of the highest in the world- at 694 GW. However, only around 171.5 GW of China’s capacity is utilized. China hopes to reach 320 GW of installed hydroelectric capacity by 2020 (Huang, 1658).

Of all potential alternatives to Coal, hydroelectric power will likely remain the number two energy supply source. Hydroelectric power has also done a great deal to reduce the amount of ash, sulfur dioxide pollution, and carbon dioxide emissions.

Conclusion

Although China’s coal consumption is double the number two producer’s amount, China seems to have little other viable options to displace coal as an electricity source in the near term.

China is embarking on ambitious wind and nuclear development programs, and it has built pipelines for natural gas, but these programs take time to develop, and there are drawbacks to all alternative energy sources. Even massive hydroelectric expansions have resulted in environmental and land-relocation controversy (See articles on the Nu River Project and the Three Gorges Dam; specifically see the book China’s Water Warriors by Andrew Mertha).

Coal will likely continue to provide a significant portion of China’s energy for the next 20 years– simply because the alternatives are not practical enough to scale-up large enough to replace coal’s necessary position in China’s energy mix.

These next few years will bring large challenges for China’s leaders as they try to balance energy security, energy demands, resource depletion and environmental concerns. With luck, China’s leadership will use constructive and creative solutions to manage and confront these growing concerns.

Recommended Reading

The Lawrence Berkeley Lab. Government Sponsored Study of the Chinese Coal Industry (July 2009)

Andrew Mertha. China’s Water Warriors. 2008.

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24 November, 2009 Posted by | China Energy, China Future | , , , , , | 2 Comments

China’s Coal (Part I)

China, Coal, and Energy: Part I

China needs and must use coal to satisfy its energy demands; at least in the near term. In fact, the entire World needs to use coal until more energy is produced using nuclear, hydro and wind…practical systems that do not generally generate large volumes of CO2. Oil, natural gas, and corn/sugar cane alcohol all produce significant amounts of CO2 in their combustion.

Given the upcoming Copenhagen climate talks and inspired by the comments section of a recent WSJ article inveighing against China’s “obsession” with coal, I concluded it might be interesting to compare America and China’s Coal use and to determine what is being done to mitigate China’s coal demand, which if unchecked- according to an article in Science, as reported in Wired- may result in “carbon dioxide emissions… reach[ing] 8 gigatons a year by 2030.” That amount of emissions would equal current total worldwide carbon pollution.

Statistics below are mostly from the US DOE (Department of Energy). World Rank is in Brackets after #. In some cases, links are to articles elsewhere (such as Reuters) for updated information.

Statistics China US
Total Energy Consumption 73.808 quadrillion BTU(’06) (#2) 99.856 quadrillion BTU (2006) (#1)
Total Electricity Consumption
2.835 trillion kWH (#2) 3.873 trillion kWH (2006) (#1)
Coal Production 2584.246 MMST (’06) (#1) 2,772.799 MMST (’07) (#1) 1,112.292  MMST (2006) (#2) 1,128.836 MMST (2007) (#2)
Coal As A % Energy Mix 70% (‘06/’09) 350GW (2006)
44.4% (2009)
Average Sulfur Content (Coal)
1.1% (Thompson) 0.8%
Average Ash Content (Coal) 17% (Attwood) 14.6%
Nuclear As A % Energy Mix 1% (‘06) 1.3% (‘07) [9.1GW] 1.1% (‘08) 20.4% (2009)
Renewables As A % Energy Mix >1.5% [9 GW] (’08) + 21.64%  Hydro [171.5 GW] (’08) ~1.0  +7% Hydro (’06)
3.6% (Sort of) + 7.1% Hydro (’09)
Natural Gas As A % Energy Mix [Consumption]
3% (‘06) 3.5% (‘07) [77.18 billion M3] (#11) 23.2% (2009)[657.2 billion M3] (#1)
Coal As A % of CO2 Production 82% 36%
Carbon Production 6,017.69 mil metric tons CO2 (’06) (#1) 5,902.75 mil metric tons CO2 (2006) (#2)

Chinese coal production is very high– twice the level of the United States’ production. All this coal production has led to carbon dioxide production, sulfur dioxide pollution, and coal ash pollution. (Detailed in the NYT’s award-winning “Choking on Growth” series).

Given the amount of coal that China produces, and the relatively higher sulfur and ash content  of some Chinese coal (MIT article | summary | Green Leap Forward’s Analysis) , the mere slight CO2 production lead that China has over the US is quite interesting– though that is likely in part due to China’s lower automotive emissions. “In [2005], coal combustion accounted for 82 percent of China’s CO2 emissions, and [only] 36 percent of America’s CO2 emissions.” (MIT, 3)

Chinese coal’s average sulfur content was about 1.1 percent, according to an article by T. Attwood in “Market opportunities for coal gasification in China” (Journal of Cleaner Production 11 (2003) 473–479.) (See also 1998 statistics of 1.1% in Thomson, 192). In contrast, “coking coals produced in the United States have … a relatively low sulfur content of approximately 0.8 percent by weight.” (EIA). In 2003, burned American coal rated a 0.93% sulfur content.

China’s coal also has a relatively high ash content- but that percentage appears to have declined over time. 60% of China’s coal used in the late 1990s had an ash content of 25-35%, and some parts of the country saw ash contents of 40-50% (Thomson, 192). In the 1990s in the US, the rate was 14.86%. Apparently China began using coal with lower ash content in the early-2000s, but the content at 17% was still higher than American ash content (Attwood).

Cleaner Coal Plants?

China’s coal plants have installed technology that allows them to reduce their amount of sulfur emissions. A surprising percentage of China’s coal generation power has been improved with cleaner-coal technologies. By the end of 2007, according to some Chinese estimates, over 270 GW of generating capacity had been installed with some form of FGD [Flue Gas Desulfurization] equipment.” (MIT)[and] “state regulations demand that all new power plants as of January 1, 2004, must be equipped with FGD systems and a series of programs have been initiated to insure retrofitting of FGD systems on older plants by the end of the decade.” (MIT).

“[E]missions levels from Chinese powerplants (sic) … “depend almost entirely on the quality of the coal they use. When they’re hit by price spikes, they buy low-grade coal.” Lower-grade coal, which produces high levels of sulfur emissions, can be obtained locally, whereas the highest-grade anthracite comes mostly from China’s northwest and must travel long distances to the plants, adding greatly to its cost. Contrary to what many outsiders believe, the Chinese state has substantially improved its ability to implement and enforce rules on technology standards. It has been slower, however, to develop such abilities for monitoring the day-to-day operations of energy producers.” (MIT Summary)

Some question whether the cleaning technologies are actually being operated effectively, and argue that “regulatory traction is partial at best. The shortfalls appear particularly serious on the operational side of power plants. That is, the systems are increasingly in place, but whether they are actually operated is another question.” (MIT)

Further Thoughts

So why does China use so much Coal rather than natural gas or nuclear– which account for 40% US energy, but both of which are negligible in China’s energy-mix, accounting for less than 7% of their energy supply?

And is there any possibility that China will increase the amount of cleaner or non-coal generating sources?

Next week, I will provide some analysis into why China needs to use so much coal and the chances that natural gas, wind, hydroelectric generation may reduce China’s Coal dependency and CO2 emissions.

Annex

* The October 2008 MIT article mentioned above analyzing China’s coal power industry is well worth the read.

20 November, 2009 Posted by | China Energy, China Environment/Health | , , , , , | 4 Comments

China’s Dirty Wind

News in the WSJ on Sept 28th reported that China’s wind farms, which as I have noted before* , have some connectivity problems in joining the electrical grid. That information is nothing new, but the rest of the article’s discussion piqued my interest.

Apparently, the Chinese government is planning to ensure ample supplies of wind (even when it is not blowing) by balancing the load not with fast-starting natural gas plants, as some US wind farms utilize to manage the load, but with slow-starting and arguably heavy-polluting coal plants.

What is not common knowledge is that producing power is not as easy as connecting a wind farm into a preexisting grid. Wind power fluctuates and varies and sometimes needs to be shut down/curtailed if wind speeds exceed say 35 mph, or blow at less than around 5 mph. Too much or too little wind on the grid can cause power shortages. (A very basic explanation of load management and peaking is HERE). A news article on the problem of variable loads being matched with hydroelectric power is HERE.

According to NERC, which (under FERC’s supervision) can assess fines and create rules to ensure electricity reliability in the US, “Wind machines “ramp up” and trail off so fast that the grid is likely to need new generators fired by natural gas that can start up or shut down faster than the ones in service now.” (NYT).**

When I read the WSJ article, I could not initially believe what it was saying. For a country run by engineers and geologists, one would think that China would be well aware of the difficulties in cycling up and down different types of power. Natural gas is a good match for wind power because it is easy to cycle up quickly. Coal, however, takes longer to cycle up. For coal to be an efficient match to mitigate the variability of wind power, coal plants will need to be on constantly.

Considering that coal is a relatively cheap source of energy, wouldn’t it be cheaper for Chinese power plants only to invest in coal and run the plants at 100% capacity rather than constructing wind plants while running coal power plants at 50% and then scaling up their use when needed? By matching coal with wind, most potential environmental gains are negated since coal’s emissions constantly flutter into the atmosphere. Still, it could be said that some reduction in carbon output is better than none at all. But the matching of coal to wind certainly drives wind power’s costs up– for China’s economic detriment and only marginal environmental gains. (It could be that China is hoping the build-out of wind power helps them when the Copenhagen environmental carbon market targets are achieved; or that natural gas can be matched to the wind farms after certain pipelines are completed.)***

Why is China using coal instead of natural gas? China simply does not have very much natural gas. (EIA) Natural gas only accounted for 3% of China’s total energy mix in 2006, compared to nearly 70% provided by coal. (EIA). And of that, only 29% was used for electric power or residential and commercial uses as of 2005. (page 4, Yang Dengwei; 32% was used for industrial fuel) This should change, however, due to pipelines that China is constructing from bordering countries that have natural gas surpluses. And of course, Liquid Natural Gas technology also raises the amount of imports that China can receive. By 2011, China hopes to “raise the ratio of natural gas in its total primary energy consumption by 1 to 2 percentage points.” (China Daily). China’s natural gas consumption rose from 50 billion cubic meters in 2005 to 76 billion cubic meters in 2008, to an estimated 86 billion cubic meters in 2009. (China Daily).

I suspect that China may eventually decide to go down the route of battery storage of excess wind power in order to better manage the loads. But battery storage technology is still a bit expensive, “costing roughly $3 million per megawatt plus millions for start-up and testing.” (Scientific American).

When China’s excess natural gas pipeline capacity comes online, the country may also begin greater utilization of natural gas to manage wind’s load, but natural gas supplies will still be dwarfed by China’s coal– and natural gas prices may rise again like they did in Summer 2008. If a majority of China’s natural gas supplies are imported (as appears likely), in order to preserve energy security, Beijing may want to discourage generators from using natural gas to provide safety from wind’s variability. Hydroelectric power could also be paired to wind power. However, hydroelectric power is mostly concentrated in China’s south, whereas much of China’s wind resources are  located in the North (Inner Mongolia, Xinjiang, etc.). Perhaps nuclear could balance the wind grid like coal currently does, but most new nuclear plants are to be built on the coast and near China’s south.

It will be interesting to examine how successfully China marries coal to wind generation and what sort of effect this will have on China’s future electricity pricing.

Endnotes

*In my older post I perhaps noted China’s wind connectivity problems a bit too harshly given that the US also has some grid connection problems regarding wind since even more so than in China, a great deal of US wind capacity is far from its citizens and will require long transmission lines to provide wind. This transmission problem helped lead to the demise of part of the Pickens Plan for a massive wind farm in Texas.

**At the very least, “[b]atteries or flywheels, both of which can store energy, may be needed to smooth out the production of wind farms, which stop producing power when the wind stops, or when the wind goes faster than the turbines can handle.” (NYT) [which leads to patents like THIS.]

*** Interesting fact. Due to the need for wind to be matched to more reliable sources of power, wind farms are not 0 carbon emission investments. One study reported that;  “Increasing the capacity of wind energy on the Austin Energy grid causes increased usage of these less efficient peaking units. In other words, as more wind energy is generated, there is a drop in the overall efficiency of fossil fuel based energy on the grid, resulting in greater carbon emissions per unit of energy from the nonrenewable sources. . . For purchased wind energy from Austin Energy, with a 20 percent capacity of wind energy, each megawatthour of electricity would increase the emission from the fossil fuel sources by 60 lb of CO2 . While this CO2 emissions rate is lower than the current UT plant emissions of 694 lb/MWh, it is also not zero. Instead of the purchased wind energy being 100 percent carbonfree, the reserve offsets result in 91 percent carbonfree energy” (Is Wind Energy Hot Air?, UT)

5 October, 2009 Posted by | China Energy | , , , , , | 3 Comments

China Cleantech: 2008 in Review

2008 was a rocky year for energy markets. Oil soared to $140/barrel, and then crashed to $40. Natural gas spot prices likewise jumped high to $13 MMBtu, then ended low around $6 (EIA). Investors, lulled by impending $200/barrel oil, poured record cash into renewable energy.

Below are some numbers from 2008’s first three quarters of China’s cleantech energy investment and development. The fourth quarter will probably post much smaller investment gains.

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Venture capital investment in Chinese renewable energy quintupled in the first three quarters of 2008, rising from US$29.1 million in the same period in 2007 to US$165 million this year (MarketWatch).

Solar electricity generation-related venture capital investments raised US$85.2 million in China, up from under $4.6 million in 2007 (MarketWatch). The top energy capture efficiency of China’s photovoltaic cells is around 21% (PV Report, p41), which is competitive in the industry. Solar energy industry growth will likely be much slower in 2009. Businessweek cited concerns that worldwide solar growth may slow to just 15% in 2009, off from the 50% growth the industry has enjoyed every year since 2004.

China accounts for 11% of the market demand for solar power equipment. The US represents 9% and Germany dominates the industry with a 38% demand (Businessweek).

China produces significant solar photovoltaic capacity, but as of 2007 more than 90% of China’s local solar power manufacturing is likely exported (PV Report 2008, p11).

China’s Wind industry likely added an expected 7 GW of capacity in 2008,* which allowed China to leap-frog India into fourth place among countries with installed wind power. Comparatively, the United States added 7.5 GW (ABS Energy Research). Global wind energy installed capacity was 94 GW at the end of 2007 and may reach 120 GW by the end of 2008 (ABS and p 15 of the Global Wind Energy Outlook). 20 GW of capacity was added worldwide in 2007- 3.3 GW of that in China (Cleantech).

* NOTE: 1/10/2009 Caijing recently reported the actual added capacity was 4.66 GW.

China’s domestic manufacturing capacity of wind turbines and equipment consisted of 40 manufacturers at the end of 2007. Chinese manufacturing accounted for 56 percent of global wind equipment installed that year. As of 2008, “Domestic manufacturing capacity is about 8 GW and is expected to reach 12 GW by 2010.” (Cleantech).

The Chinese wind power market has changed significantly in the past four years. In 2004, 75% of the market demand was filled by foreign suppliers, in 2006 only 55% was, and in 2007 foreign suppliers’ share fell to 42.2%. Only 1.7% of capacity is constructed by joint ventures, the rest of capacity is produced and installed by Chinese companies. (p20). In that same time period, the China market has seen total installed wind capacity rise from under 1GW to 8GW.

Nuclear Power. China’s nuclear industry remained steady at 9GW of installed capacity as of December 2008. Nuclear energy accounts for about 1.3% of China’s total energy generation mix.

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Previous Coverage by ChinaComment:
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Other Places of Interest:

23 December, 2008 Posted by | China Energy | , , , , , | 1 Comment

Xinjiang’s Energy Resources

Resources buried under Xinjiang account for over 20% of China’s future petroleum reserves, over 40% of its coal reserves, and Xinjiang has potential for large uranium deposits. Recent terrorist attacks and instability in Xinjiang makes it worthwhile to examine just what the Chinese have of interest in the region. Below, I explore the importance of Xinjiang’s security to Beijing’s energy policy. (Examination of a political point-of-view calculation will have to wait until later.)

An Overview of Xinjiang’s Energy Resources

“Xinjiang’s annual oil and gas equivalent output… ranks the first in the country… The third national resources evaluation shows that: Xinjiang’s total oil and natural gas resource reserves exceeded 30 billion tons… Recently, Xinjiang has been producing 75,000 tons of crude oil daily, occupying 14.4 percent of the country’s daily crude oil output. In 2007, Xinjiang’s oil and gas equivalent reached 44.94 million tons” which was the highest production value of all Chinese provinces” (People’s Daily).

“Xinjiang produced 26.4 million tons of crude oil and 21.2 billion cubic meters of gas last year, or 43.3 million tons of oil equivalent, representing a rise of 13.6 percent from 2006. [Note, these estimates differ slightly from People’s Daily’s estimates] As a result, Xinjiang, with estimated reserves of 20.8 billion tons of oil and 10.8 trillion cu m of gas, has been designated as a strategic area to replace Heilongjiang [in the Northeast] in China’s oil industry” (Stephen Blank, Jamestown).

“[B]eneath Xinjiang’s dusty soil and mountainous steppes lies buried 40% of China’s coal reserves. Equally abundant and far more precious to the central government are oil and natural gas deposits that total the equivalent of about 30 billion tons of oil and represent one-fourth to one-third of China’s total petroleum reserves” (Peter Navarro).

* A short, four page report on Xinjiang’s energy potential by the WSI (World Security Institute).

Xinjiang’s Coal

“It is predicted that during the 11th Five-Year Program period (2006-10), in the Zhundong area of eastern Xinjiang, the total installed capacity to be constructed – based on coal resources there – will reach 8.8 million kilowatts, and that of coal-to-methanol, coal-to-olefin, and coal-to-oil projects will total 7.6 million, 1.96 million and 3 million tons respectively. The aforesaid projects are expected to generate sales revenue of some 55 billion yuan (US$7 billion) after going into production… In 2006, raw-coal output in Xinjiang increased by some 3.6 million tons over 2005” (Asia Times).

“In accordance with the region’s 11th Five-Year Program, by 2010 Xinjiang’s raw-coal output is expected to exceed 100 million tons, and its installed capacity to top 10 million kilowatts” (Asia Times). 

Xinjiang’s Natural Gas

“The Tarin Basin alone has proven reserves of over one billion tons of crude and 59 billion cubic meters of natural gas” (Martin Andrew, Jamestown Foundation).

Xinjiang’s Wind

Xinjiang is also home to the Dabancheng wind farm, one of the largest in China, and has potential for much more wind power expansion. And “The Ala Mountain Pass region… will have an installed base of wind farms totaling 1 GW” by 2015 (Renewable Energy World).

“(Although significant power-grid transmission to the East would be a logistical problem to overcome.) “Currently, the total wind power capacity installed in Xinjiang accounts for 20% of nationwide capacity installed… The total capacity is estimated to reach 43.8 million kW, which can generate 1 00 billion kWh of electric power and is nine times of the current electric power generated in Xinjiang” (World Security Institute).

Energy Security and Transportation

* “The 2008 People’s Republic of China (PRC) White Paper on Diplomacy placed energy security as a major centerpiece of the country’s foreign policy…The White Paper specifically emphasized that China is currently the world’s second largest producer and consumer of energy, and therefore an indispensable part of the global energy market, and is increasingly playing a prominent role in ensuring global energy security” (Russell Hsiao, Jamestown).

* “Central Asia can serve as a transshipment area for Middle East oil should war ever break out over Taiwan or China’s various claims for oil reserves in the South China Seas” (Peter Navarro). Pipelines through Xinjiang connect China with Turkmenistan, Kazakhstan (2010), and also run through Uzbekistan. It is vital to China’s energy security that these energy pipelines are secured.

* Crude Oil reserve bases are also located in Xinjiang, which will be useful if coastal oil reserves in Zhejiang or Fujian come under fire due to a Taiwan conflict.

* Xinjiang’s vast resources can help China wean itself off of foreign countries’ energy. If developed properly, and if China restrains its energy consumption, the country can continue to possess a modicum of energy independence.

Conclusion

Security of Xinjiang’s resources is central to Beijing’s strategy of becoming a developed nation. Without Xinjiang’s resources, the Chinese would depend even more on the vagaries of the Malacca Strait for transshipment of energy. Russia’s new pipeline into China will help alleviate some of China’s dependence on pipelines through Xinjiang, should said pipelines become plagued by sabotaguge (which is unlikely). Additionally, more energy diversification is planned with expansions of China into Myanmar energy.

Still, China’s domestic energy hub for the future is Xinjiang. Its supply of energy to the rest of the country is disproportionate to its population and its wealth. Because Xinjiang is key, China will continue to be harsh in its crackdowns against splittists, terrorists, and overly zealous religion adherents.

27 August, 2008 Posted by | China Energy, China Future | , , , , , , , , , , | 1 Comment

Wind Power In China

 Long known for its polluting and dirty coal industry, did you know that China also has fast-developing and promising wind and nuclear industries? It needs to, especially since it became a net oil importer in the last ten years and is importing increasing amounts of coal to feed its economic expansion.

This article focuses on China’s Wind Industry.

“China intends to spend an estimated $200 billion on renewable energy over the next 15 years.” And as of April 2008, “the [Chinese] government has set a target for renewable energy to account for 10 percent of the country’s energy consumption by 2010 and 15 percent by 2020.” This may be a reasonable goal, given that China met its goal for installed wind-power generating capacity three years ahead of schedule.

In February 2008 a report was released that stated China’s wind power generation rose 95.2% to 5.6 million Kw hours in 2007. “The government plans to increase its wind power equipment to a combined installed capacity of 10 million kw by 2015, and to 30 million kw by 2020.”

To encourage further development; “The Chinese government has begun refunding value-added tax (VAT) and import duties on core wind power turbine parts and materials in a move to promote the development of clean energy.”

And feverish work has already begun:

In March, China announced the “creation of a high-level body to integrate its energy management, supervision and policies, functions that are currently dispersed among many government agencies.” This should allow for more streamlined development of the wind and renewables sector.

“China National Offshore Oil Corp. (CNOOC) plans to build the world’s biggest offshore wind farm… near Weihai City in eastern Shandong Province.” The whole project which will result in 1.1-2.5 million megawatt hours may take up to 10 years to complete.

“By 2010, China Power New Energy… plans to put into operation 1,500 megawatts (MW) of renewable energy capacity… It also plans to have another 1,500 MW under construction and a further 1,500 MW in the pipeline… That would be 50 percent higher than the company’s original target of having 1,000 MW of renewable energy capacity on stream, 1,000 MW under construction and another 1,000 MW in the pipeline… The company now had installed renewable energy capacity of 980 MW,”

Why the focus on wind? According to a 2007 research industry report by QYResearch “Wind power is the most popular renewable energy in China, compared to the solar energy industry; as its cost is much lower. Chinese wind power price is about 0.5-0.6RMB/KW.h while the traditional power price is about 0.2-0.3RMB/KW.h, but solar power price is about 8 times that of wind power price, therefore wind power is very welcome in China. ”

For a little perspective, The Earth Policy Institute has a lot of good data on the amount of wind capacity installed worldwide. As of 2007 Germany leads the world with over 22,247 MW, the US is second with 16,818 (and led the world in 2007 installed capacity of over 5,000 MW), Spain is third with 15,145 MW, then India with 8,000 MW, China with 6,050 MW, and Denmark with 3,125 MW.

China added 3,449 MW of wind energy in 2008. Each year, China has added greater and greater amounts of wind energy capacity. With the current positive regulatory environment, increasing production capabilities, and the proliferation of environmentally-based trade fairs showcasing cutting-edge technology, China is demonstrating that it wants to move to the forefront of clean energy technology development. As quoted at the Green Leap Forward; “The National Reform and Development Commission was considering almost tripling wind energy targets for 2020, from 30 GW to as much as 100 GW. To put that number in context, realize that current installed wind capacity is about 94 GW…globally.”

Considering China’s rapid progress thus far in wind energy development; it appears that within the next three to ten years China might very likely become one of the world’s major leaders in wind renewable energy.

Other Interesting Tidbits
 * Junfeng Li at the WorldWatch Institute provides a nice analysis and chart listing of the major wind power producers in China.
* The Green Leap Forward had a good article on China’s Wind Power.
* China Wind Power Report: 2007
* China Brief on China’s new energy regulatory commission.
* Renewable and Alternative Energy News on China.

16 June, 2008 Posted by | China Energy, China Future, China Technology | , , , , , , , | 1 Comment

Isn’t That Odd? China’s Wind Grid Troubles

In a few hours I’ll post a more indepth article about Chinese wind power; but for this edition of “Isn’t That Odd?” I’ll discuss a little about some results of inefficient bureaucracies in China.

Similar to their counterparts in many state bureaucracies, China’s bureaucrats have a way of dropping the ball.

In January 2008, Reuters pointed out that: “China’s wind power generating capacity surged to 5.6 gigawatts by the end of last year, but over a quarter of it is still not connected to the grid because of bad planning.” With the creation of a National Energy Commission in March 2008, these inefficiencies might disappear, but some people who were hoping for a more comprehensive Ministry disagree.

I wonder if my earlier comment sunk in though, so I’ll repeat it: Over a quarter of wind-generating capacity installed in 2007 is still not attached to the grid- but why? Maybe because as the article goes on to say; “local governments are keen to jump on the renewable energy bandwagon as Beijing pushes greener growth, [therefore] they are approving new wind farms without proper planning.”

Chinese local governments, pursuing directives from the top have long been infamous for making grandiose plans that gain them plaudits from central planners, but don’t actually solve problems that the people are actually facing.

In Great Leap Forward times (1957-1959) local cadres gave “excess” food to the central government for redistribution while their citizens starved, because the cadres couldn’t admit the harvest was weak without admitting failure. In later times, shoddy buildings were constructed and polluting industries flourished because the important thing was the number of people employed, not the quality of the factory, or the buildings. This can have tragic consequences, as demonstrated by the collapses of shoddily-constructed schools as a result of the Sichuan earthquake.

So, in wind too, as in previous pushes toward “self-strengthening,” today’s Chinese government officials are making the same mistake as their predecesors did with the “backyard furnaces” (where steel was smelted en masse, but was of such low quality that all it really contribuited was greater pollution), and the project to eliminate birds (because they ate crops… somehow it was forgotten that insects, which birds eat, can be much more destructive.)

Likely, many of these wind generators are subpar- not up to international standards since the local cadres were more interested in gaining governmental plaudits than in really cleaning up the environment.

Oh well, that’s central planning for you. At least the turbines are there; some will work, and ultimately the cadres who know what they’re doing will (hopefully) be commended. (To take a pollyanna view of the situation.)

The question is, how many incompetent cadres will be reprimanded… But that’s a topic for another article.

13 June, 2008 Posted by | China Energy, China Technology, Isn't That Odd? | , , , , , , , | Leave a comment