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China – A Vast Laboratory For Developing Renewable Energy By James R. Biery, Senior Consultant, Royal Roots Global Inc. March 1, 2006 The word has gone out from Beijing, and the word is “energy.” Toward the close of 2005, on November 7, President Hu Jintao of China gave a simple message with great energy implications to government representatives from 78 countries meeting in the Great Hall of the People at the Beijing Renewable Energy Conference. “China attaches great importance to the utilization of renewable resources, making it one of the important moves to promote economic and social development.” President Hu’s statement also was directed to his 1.3 billion fellow Chinese, and signaled the world that China was girding itself to deal with the vast shortfall in energy deriving from its success in entering the global economy. China was striving to end its dependence on coal and was alert to the danger of becoming addicted to oil. It was determined to deal with energy needs that would foster technological growth and a cleaner environment – even as this effort would require commitment to success from government, business, academy, citizenry…and aid from experts and financial institutions beyond China’s borders. On January 1, 2006, China awoke to the responsibility of developing and managing the use of renewable resources President Hu extolled. The nation was charged with filling in the day-today details of a much-debated law that had gone into effect a minute past midnight. It was the Renewable Energy Law, adopted at the 14th meeting of the Standing Committee of the 10th People’s Congress on February 28, 2005. “The purpose of this law is to promote the development and utilization of renewable energy, increase energy supply, improve energy structure, safeguard energy security, protect the environment, and realize the sustainable development of the economy and society.” stated Article 1.
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“Renewable energy in this law,” explained Article 2, “refers to wind energy, solar energy, hydro energy, biomass energy, geothermal energy, ocean energy, and other non-fossil fuel energy sources.” In the quarter of a century preceding the Renewable Energy Law, China’s growth astounded the world – with a GDP of more than nine percent for two decades, and some nine percent predicted for 2006. This growth came with destructive pollution and acid rain from increased burning of sulfurous coal to meet seemingly insatiable demands for energy. Now, the world’s attention is on China’s growth for the next 15 years – and what effects may follow from efforts to build a country of largely middle-class families with per capita income of US$3,000 by the year 2020, up from US$1,700 in 2005. It is in this context of China’s population growing to 1.6 billion by 2020 – with dramatically burgeoning needs for energy-consuming housing, appliances, manufacturing facilities, construction, and automobiles, and the toll taken by pollution (according to the World Health Organization, seven of the ten most polluted cities are in China) – that the Renewable Energy Law came into being. China’s energy crisis is causing it to turn itself into a laboratory the size of the United States, with energy being its focus. It is searching for energy solutions, even willingly embracing technologies that remain on the fringes in the West. It also must devise or restructure laws and regulations, nationally and locally, and, perhaps most difficult, gain acceptance from the people of China that energy must be treated with respect, not squandered. China’s Renewable Energy Situation China’s renewable energy situation as the new Law went into effect as of January 1, 2006, can be glimpsed in the following reports The outlook for increased use of renewable energy in China, while still facing problems of acceptance by the citizenry and a framework for pricing and regulation, is brightened by the central government’s backing of the new law. At the Beijing Conference in November 2005, Zhang Guo, Vice Minister of the National Development and Reform Commission, said that China would spend about US$180 billion over the next 15 years to increase renewable energy to 15 percent of the total generated, from the current seven percent. And the support China needs from the rest of the world to attain its energy goals is beginning to stir. For example, in February 7 2006, the World Bank approved an US$86 million loan for scaling up wind and water power. Some US$67 million would go to development of the 100 MW Huitengxile Wind Farm in the Inner Mongolia Autonomous
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Region, which already has 70 MW of wind generation capacity. An additional $US 19.33 million would finance rehabilitation and development of small hydropower projects in Zhejiang Province. Solar China already has great experience with solar energy systems. It is a producer of solar cells and has more than 50 million solar water heaters in use mostly on rural housetops, claiming more than half the global market for such devices. For high-end solar technology, such as photovoltaic cells, more research and new technology is needed. Wind Power Wind power is seen as having a big future in China. Some 43 wind farms now dot the Chinese countryside, and though producing less than 1 GW of power and providing only 0.17 percent of China’s energy needs, new targets call for obtaining 6 GW of power from wind energy by 2010 and 30 GW by 2020, an increase that would give China nearly twice the level of the installed capacity of the current world leader, Germany. Estimates of China’s mainland wind energy capacity of 235GW are dwarfed by the estimated potential of three times that capacity from offshore wind farms in shallow seas close to the main load centers in eastern China. Such a farm located in the Bohai Sea off the northern province of Hebei has been planned for construction this year. A wind farm located 60 miles outside of Beijing has been under construction to generate 400 MW per day, enough to power up to 400,000 households when running at full capacity. One of the most promising areas for catching the wind is heavily industrialized Guangdong Province in China’s far southeast. Some officials say wind power could help cut air pollution shrouding the Province and nearby Hong Kong that is caused by burning fuel oil or coal to generate electricity. Biomass Like the rest of the world, China is looking to produce fuel, such as ethanol, from crops and using methane gas at farms to produce electricity. Technology has been developed to generate power from English cordgrass, an alien plant that is threatening more than 100 counties. The plant can be turned into flammable gas which can be used for cooking, power generating, and heating. One kilogram of grass can generate one kilowatt of electricity, and if all the acreage were so used, China would be able to harvest more than 50 billion kilowatt hours of electricity.
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Saving Energy Energy saved is energy earned – and China is endeavoring to build cars, buildings, even entire new concept towns that are energy efficient. Autos In 1993, there were 700,000 passenger cars in China. Production capacity for 2006 is estimated at 8 million new cars, with environmentally friendly hybrid cars entering the Chinese market. Running on a mixture of electricity and fuel, they are coming from several Chinese firms, including Dongfeng Motor Corp, Chang’an Motor Corp, Chery Auto Co, and the China FAW group. Hybrid buses are in service in Wuhan. Volkswagen has announced it will make hybrids for China customers by 2008, with its main Chinese partner, Shanghai Automotive, and will provide 500 hybrid Touran cars to be used as people carriers during the Beijing Olympics. Housing Housing energy consumption accounts for nearly 40 percent of the total energy used in China, noted China Daily on February 7, 2006, in comments that reflect the effort of government and media to educate consumers to the realities of energy use. “It is estimated that by 2020 some 30 billion square meters of new housing will be built. If all the houses can reach energy-saving standards stipulated by the state, 335 million tons of coal could be saved annually….It is estimated that the amount of energy taken by housing will soon surpass the amount consumed by the country’s manufacturing sector.” China Daily suggested some actions for government: “It is high time for the central government to map out policies, which may make it compulsory for developers to build no other houses than energy-saving ones. Specific rules must be in place to make sure that energy-saving construction materials be used in home building while policies should also allow developers to benefit in terms of taxes from constructing energy-saving houses. Preferential policies are also needed in terms of mortgages and interest to encourage buyers to purchase energy-saving houses.” New Towns China has looked West for ideas about environmentally friendly towns. American ecologist-architect William McDonough and associates are designing Tangye New Town, to be built in Jinan in Shandong Province, and five other sustainable municipalities. Described in
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Harper’s Magazine, February 2006, Tangye is a seven-square-mile city being built to house 180,000 people with support services for nearly a million more. This “eco-effective” city will covert its waste into fuel, draw its energy from the sun, and return its water to the ground through natural drainage and irrigation. “Every building in Tangye will be equipped with an intricate plumbing system that will direct water from bathing and washing clothes into low-flow toilets. Wastewater, in turn, will be piped to field as fertilizer or converted to biogas for cooking.” The architects say their eco-cities, which will include five-and-seven story apartments, will be covered with so much vegetation that they will seem to be an extension of the natural landscape, with rooftop gardens insulating buildings and producing oxygen. The Road Ahead China’s visionary new Renewable Energy Law was only a month old when the news from Denmark – an energy innovator which gets 20 percent of its electricity from wind, and sells its wind turbines around the world – showed the difficulty of securing changes in behavior and governance. On February 9, the Wall Street Journal reported that the Danish showcase for renewable energy, Samsoe Island, whose 4,300 permanent residents has been persuaded to invest in wind turbines, solar panels, and electric cars was running into trouble. Elimination of a tax credit for solar power brought installation of panels to a halt and wind-power faces an uncertain future when current fixed-price contracts expire and turbine owners are thrown into the free market. China, too, has to work out rules, regulations, and financial stratagems to attract investment to renewable energy, manage the ways it will be used, and decide who will pay how much for it and for how long. As one observer noted about this extraordinary step China is taking toward the future – which will reveal to the world how energy might be produced and consumed – the development of renewable energy in China still has a “long march” ahead of it. It is a journey that should also provide great opportunities for those whose services and products are seen to be helpful as China remakes itself once again.
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