China Energy Monthly - January

ENERGY TECH BUSINESS

Cyberattacks raise concerns about U.S. energy security (1-26-2010)
A report from the Christian Science Monitor indicates that Chinese hackers attacked three U.S. energy companies in 2008 with the intent to steal information regarding oil and gas exploration techniques. This information also contained potential prospects for drilling—the supposed “crown jewels” of an energy company. Recent Chinese cyberattacks in the news, namely against Google, raise questions about overall information security and more specifically, security of crucial information about the U.S. energy industry. For example, the development of a U.S. smart grid would include many operational features available only through an Internet connection. The U.S. is considering these concerns in the larger smart grid development plan.
http://www.csmonitor.com/Commentary/editors-blog/2010/0126/Why-the-China-virus-hack-at-US-energy-companies-is-worrisome
See also http://online.wsj.com/article/SB30001424052748703699204575016801501346056.html
http://business.rediff.com/report/2010/jan/25/tech-china-not-involved-in-google-hacking.htm

Investments in grid soar even after spending crunch (1-22-2010)
China has called on all national banks to stop lending until the end of the month. The first example of this spending crunch is seen in a 25 percent reduction in what State Grid Corporation of China would invest in the electricity grid in 2010. While this may seem to be a sizable reduction in investment, China is still spending ten times the $3.4 million the Obama administration pledged for grid development. China’s proposed investment in grid upgrades includes implementing research trials on the smart grid, with implementation occurring sometime between 2011 and 2015. At this point, the U.S. could only dream of seeing that type of grid investment. The reduction on lending is certainly real, but it doesn’t seem to be negatively affecting China’s intentions to develop a more reliable and more efficient grid.
http://www.chinadaily.com.cn/hkedition/2010-01/22/content_9358932.htm

China’s energy demand expected to rise in 2010 (1-19-2009; 1-21-2009)
In response to forecasts for increasing energy demand in 2010, China Huaneng Group, the country's largest producer of power, plans to increase electricity production 11 percent and coal production 29 percent. Including these increases, Hueneng will produce 466.5 billion kWh of power and mine 56.86 million tons of coal. Despite a brief slowdown during the economic downturn of 2009, China’s power consumption is expected to increase to 3.9 trillion kWh, up 7 percent from last year. This increase is largely attributed to an overall increase in standard of living.
http://www.chinadaily.com.cn/bizchina/2010-01/21/content_9353994.htm
http://www.chinadaily.com.cn/bizchina/2010-01/19/content_9341436.htm

China initiates environmental fund (1-19-2010)
China General Technology Investment Fund Management Corp. will be the fund manager for China’s first ever environmental industry fund. Aimed at combining the interests of environmental preservation and economic development, the first phase of the fund will raise $292.95 million for investment in the country’s environmental sector. Another offshore fund totaling $300 million will be established for investment in the water, solid waste disposal, renewable energy, energy conservation, and emission reduction sectors.
http://www.chinadaily.com.cn/bizchina/2010-01/19/content_9343434.htm

GOVERNMENT

China Cannot Be “Supreme Facilitator” Alone
This past December, delegates, diplomats, and interested parties from nearly 200 countries gathered at the 15th Conference of the Parties (COP15) in Copenhagen with the goal of reaching an international agreement on climate change. In the weeks leading up to COP15, it seemed apparent that reaching a global compromise would be difficult and a legally binding agreement would be nearly impossible. Some argue that the resulting Copenhagen Accord fails to properly address the complexities and dangers that climate change presents. Nonetheless, Xie Zhenhua, head of China’s delegation, claims “The meeting has had a positive result [and] everyone should be happy.” China’s support for the final accord is not without merit, but the Chinese role in the proceedings could hardly be described as supreme facilitator.

Indeed, de facto decision maker would better suit Chinese Premier Wen Jiabao’s part in the eleventh hour agreement with President Obama. While other countries did participate in the discussion, the final text hinged on matching U.S. and China interests. With each country respectively producing about 20 percent of total greenhouse gas emissions, it is no wonder that the U.S.-China debate defined the final accord. In the end, developed nations acquiesced to China’s call for increased financial support to developing nations—the final number of $100 billion annually until 2020 still lacks explicit direction.

With regard to emission reductions, China announced early in the process that it would strive “…to cut carbon dioxide emissions per unit of GDP by 40-45 percent by 2020 from the 2005 level.” This announcement, seemingly free from the auspices of the UN and the rest of the COP15 delegation, follows China’s aim to remain immune to influence from the global community. Notwithstanding, this proposed reduction is nearly double that of India’s goal of 20 percent per unit of GDP. Using CO2 emissions per unit of GDP as a reference base will help developing nations continue to grow while still abating overall emissions. The final accord also embodies China’s mantra of “common but differentiated responsibilities.” Chinese officials have consistently defended China’s right to economic growth—even if that growth requires power generated from dirty, coal-fired electricity plants.

In order to meet its emissions reductions, China must improve the fuel and power consumption it so desperately defends. Already one of the largest exporters of renewable energy technology, China stands poised to lead a domestic green revolution. With ambitious goals in place (for example, 20 percent renewable power by 2020), China should not isolate itself from the goals of the global community. China and the U.S. should recognize that the fate of our planet is much like that of the final agreement at COP15: failure is imminent without renewed cooperation between the two largest emitters.

This cooperation could stem from several initiatives led by the U.S. Dept. of Energy. First, a united effort to increase energy efficiency through more stringent building codes could be a cost effective way to see rapid reductions in energy usage. Additional plans aim to increase knowledge sharing between the public and private sectors in both nations. Pushing for collaboration in innovative technologies like electric vehicles will be a crucial part of reducing emissions. These steps alone are not enough. As both nations lead the post-COP15 crusade to save our planet, potential progress in emissions abatement will be limited if China and the U.S. cannot agree on common emission measuring and reporting mechanisms.

Citations
See http://graphics8.nytimes.com/packages/pdf/science/earth/20091218_CLIMATE_TEXT.pdf for the complete text of the Copenhagen Accord.
http://news.bbc.co.uk/2/hi/science/nature/8421910.stm
http://www.slate.com/id/2239321/
http://news.xinhuanet.com/english/2009-12/12/content_12633683.htm
http://www.energy.gov/news2009/8292.htm

"Green Giant - Beijing's crash program for clean energy."
Evan Osnos, the New Yorker (December, 2009)
In the late 1980s China began the 863 Program to kick-start a technological revolution. The program invested in projects such as cloning and robots, but starting in 2001 China began investing heavily in energy technology. In 2006, even more money was pumped into renewable energy. Organizations that are a part of the 863 Program include the Goldwind Science and Technology Company and the Thermal Power Research Institute in Xi'an. Due to government funding, the Thermal Power Research Institute was able to conduct research on coal gasifiers, which turn coal dust into a gas that can be burned with less waste, also making it easier to extract greenhouse emissions. Although decades old, gasifier technology still costs between $500 million to more than $2 billion for development of utility scale power plants. A Texas-based power plant developer, however, has licensed the new technology from the Thermal Power Research Institute—this is one of the first examples of the U.S. importing coal technologies from China.

While China was investing money in energy projects, Bush was cutting funding to energy projects, including that of the first commercial sized carbon sequestration power plant in the U.S. For example, China has installed more solar water heaters than any other country. In addition, the Chinese government is subsidizing home heaters that have a built in thermostat programmed to use less electricity during peak day hours and then store energy at night when demand is lower. In fact, the world’s first mass market electric vehicle, the electric bicycle, is already popular in Beijing.

A new energy economy can be achieved if the U.S. and China partner together to maximize their strengths. Chinese bureaucracy discourages risk and public funding is often given to less innovative projects, but China’s low cost manufacturing resources work well with innovative, but expensive, Western technology. President Obama's recent deals with China to share energy technology are a step toward accelerating progress in both countries.
http://www.newyorker.com/reporting/2009/12/21/091221fa_fact_osnos

China on pace to meet 5 year goal (1-18-2010)
Lawrence Berkeley National Labs’ China Energy Group released a report characterizing China’s current five-year plan (2006-2010) as an ongoing success. Renewed efforts in energy efficiency have placed China on target to meet its goal of reducing energy intensity 20 percent from 2005 to 2010. China has used rapid urbanization as a vehicle to implement efficient building standards while still managing to close inefficient plants. China’s general population, already living through the negative effects of global climate change, does not exhibit the same skepticism as its American counterpart. The China Energy Group noted that China is “…singularly and amazingly committed to the concept of resource conservation….” That China is on pace to meet this five year goal bodes well for its declaration to reduce energy intensity per unit of GDP 40 percent by 2020.
http://www.sciencedaily.com/releases/2009/12/091208170917.htm
http://greenleapforward.com/2010/01/18/assessing-chinas-five-year-plan-energy-conservation-programs-5-year-plan/

SOLAR

eSolar and Panglai reach agreement for solar thermal plants (1-10-2010)
eSolar, an international solar plant developer based in California, and Panglai Electric, a Chinese electric power manufacturer, initiated a licensing agreement for the development of 2GW in solar thermal power. The agreement schedules construction of several solar thermal plants in China over the next ten years—reaching an impressive total of 2GW of renewable power. Although China is the leader in photovoltaic manufacturing, this agreement represents China’s first major move to concentration solar thermal power. China’s push for clean energy technology threatens to eclipse US attempts to stimulate economic growth and survive the Great Recession. Indeed, eSolar attempted to offer the US a considerably smaller deal for 92 MW of solar thermal power in New Mexico, but according to Bill Gross at eSolar, the US DOE stalled in the loan application process while China had already signed the larger deal.
http://www.esolar.com/news/press/2010_01_08
http://www.nytimes.com/2010/01/10/opinion/10friedman.html

China proposes solar growth in Bulgaria (1-21-2010)
Polar Photovoltaics and Wiscom, two Chinese PV manufacturers, have made their first investment in the EU with the proposed development of a 2MW plant in Bulgaria. Finding success in Bulgaria would be a great launching point for a larger, EU-based solar development initiative.
http://www.chinadaily.com.cn/bizchina/2010-01/21/content_9356764.htm

BIOFUEL

Scientists crack cassava genetic code (1-18-2010)
The Biology Institute of the Chinese Academy of Tropical Agricultural Sciences has completed the genome sequencing of the cassava, a root commonly used to produce ethanol. This completed research will help scientists develop cassava as a viable source of biomass energy.
http://www.chinadaily.com.cn/bizchina/2010-01/18/content_9337430.htm