China Energy Monthly - March

This month learn about China's adoption of American transmission technology (D-VAR), cybersecurity, rare earth minerals, the first citywide cap-and-trade system and the National Energy Commission.

ENERGY TECH BUSINESS

“China leads major countries with $34.6 billion invested in clean technology” (3-25-2010)
The most recent report from the Pew Environmental Group finds that China leads in investments in green energy markets with private investments of $34.6 billion over the past five years. This is almost double that of the U.S. The decrease in U.S. investments may be due to regulatory deficiencies like renewable portfolio standards. The U.S. however remained a leader in venture capital investment in next-generation biofuels, advanced solar, energy efficiency and smart grid technologies. Some are still skeptical about the clean-energy economy. One commentator stated that the renewable market, globally and domestically, is small and “capturing a share of a subsidized market is no way to grow your economy or revive it once it’s been smashed by a financial crisis.”
http://www.eenews.net/climatewire/2010/03/25/archive/1?terms=china+energy

Chinese Academic Paper on the Vulnerability of the U.S. Power Grid Sets Off Alarms in U.S. (3-20-2010)
Wang Jianwei, a graduate engineering student in Liaoning, China, has triggered a small uproar in the U.S. military community by co-authoring a paper on the paralyzing effect a cyber attack would have on the U.S. electric grid. Mr. Wang claims he intended the paper to be an exercise in determining possible vulnerabilities in the system, but some U.S. military strategists, like Larry M. Wortzel, believe the paper was meant to inform would-be attackers of the details needed to realize such an attack. Other analysts in the security field have confirmed that Mr. Wang’s paper is merely hypothetical—nonetheless, the paper illustrates what many energy and security wonks have known for years: our electric grid’s vulnerability is cause for real concern. Indeed, the recent wrangling between Google and Chinese officials highlights the need to address cyber security. Furthermore, calls for increased computerization and automation of the U.S. electricity grid will exacerbate the problem. Electric policy must give serious consideration to this issue before moving forward new smart grid projects.
http://www.nytimes.com/2010/03/21/world/asia/21grid.html

Shanghai has U.S. investor for waste to energy facilities (3-24-10)
U.S. based Waste Management and Shanghai Chengtou has launched a joint venture, the largest joint venture in the solid waste treatment business in China. Shanghai Chengtou Holding and Waste Management subsidiary Wheelabrator Technologies will work together to build and manage waste to energy facilities. Waste Management purchased a 40% equity in the Shanghai Environment Group joint venture.
http://news.xinhuanet.com/english2010/china/2010-03/24/c_13223053.htm

“China dominates minable rare earth minerals, major ingredient in clean technologies” (3-17-2010)
Rare earth minerals (REMs) are crucial to improve performance and reduce cost of clean technologies such as wind turbines and batteries for electric cares. The U.S. imports roughly 90% of its rare earth from China. Molycorp is the only U.S. firm that currently produces REMs. Molycorp asserts that Congress could facilitate less dependency on Chinese imports by making loan guarantees to open mines.
http://www.eenews.net/climatewire/2010/03/17/archive/4?terms=china+energy

“China Southern Power Grid Adopts AMSC D-VAR” (3-1-10)
China Southern Power Grid Company has submitted a second order to American Superconductor Corporation’s D-VAR (Dynamic – Volt Ampere Reactive) system. The system’s uses include stabilize and regulate voltage on transmission grids, detect and compensate for voltage disturbances and support a stable point of interconnection for distributed generation and large scale wind. Stabilizing voltage transmission capacity may improve and reduce the amount of generation required for reliability. The new systems will be deployed at the 220 KV Yuanmo substation in Chuxiong in Yunnan Province. In the last 12 months, American Superconductor has received from China four orders for the D-VAR system.

Sources:
http://tdworld.com/substations/china-southern-power-grid-20100301/index.html
http://www.gepower.com/prod_serv/products/capacitors/en/d_var.htm

CLIMATE CHANGE

“Carbon Markets: China may run first citywide cap-and-trade system by June” (3-05-10)
Tianjin, a northeastern port city proposes to limit the energy used to heat buildings. The system allows property managers who use energy below the limits to earn credits, which they can then sell. Citigroup Inc. has already purchased allowances in the Chinese program. Tianjin’s program is China’s first market-based carbon trading plan.
http://www.bloomberg.com/apps/news?pid=20601130&sid=a9GkjJe7qo80#

GOVERNMENT

The National Energy Commission is not really new (January 2010)
Like many news readers, we noted the State Council’s announcement of a “new” National Energy Commission (“NEC”) on January 22, 2010. Julian L. Wong of the Green Leap Forward quickly pointed out that the NEC has been around for almost two years. Mr. Wong also states that the NEC is hardly a “super ministry.” NEC’s work will be carried out by the National Energy Administration (“NEA”) and NEC’s role may be limited to coordination. NDRC may be the true “super ministry” as its Pricing Bureau continues to set energy prices. In addition, the many stakeholders in China’s energy markets, namely the state-owned energy companies, already (and will likely continue to) exert considerable control over new policy and project developments. In short, the NEC does not represent momentous change. For a more in depth discussion, go to the greenleapforward.com.

Sources:
http://www.brookings.edu/articles/2008/11_china_energy_downs.aspx
http://greenleapforward.com/2010/02/04/the-national-energy-commission-myth-busting-the-new-energy-super-ministry/

“France loans China 120 million euros to improve energy efficiency” (3-16-09)
China’s Ministry of Finance and the French Development Agency signed an agreement on March 16, in which the French Development Agency agreed to provide loans to support energy efficiency and emissions cuts projects. Three banks will distribute the money to small and medium-sized companies. This is the most recent loan of a total of 11 loan agreements between the parties since 2004.
http://news.xinhuanet.com/english2010/china/2010-03/16/c_13213707.htm

WIND

“China speeds up offshore wind power” (3-20-10)
At a recent seminar sponsored by the Chinese Renewable Energy Industry Association, a National Energy Bureau (“NEB”) representative said the government will be putting together a timetable and a project list. This shortly follows the January Interim Measure on the Management of Offshore Wind Farm Development. The NEB has required the coastal provinces to map potential wind farm sites and will be selecting sites for offshore wind farms with 1 million KW or higher installed capacity.
http://news.xinhuanet.com/english2010/china/2010-03/20/c_13218244_2.htm