NEW ENERGY FILLS CHINESE EMPTINESS

Green Power Takes Root in the Chinese Desert
Keith Bradsher, July 2, 2009 (NY Times)
and
China considers higher renewable energy targets
Fu Jing, 2009 July 6 (China Daily)

SUMMARY
Before U.S. leaders even began a substantive debate over a Renewable Electricity Standard (RES) about getting a significant portion of the nation’s electricity from New Energy sources by 2020 or 2025, China’s National Development and Reform Commission (NDRC) had set itself a set of rigorous New Energy objectives. By the time Congress finally started debating the efficacy of a U.S. RES, China had surpassed its ambitious stated goals and then upped them with a new, much more ambitious Renewable Energy Law.

Though China still gets about 70% of its power from coal, the central government has demonstrated a strong commitment to New Energy, especially wind. It doubled its installed wind power capacity each of the last 4 years and this year will take the world leadership in wind turbine purchases. There is an emerging competition between state-owned utilities in solar power plant development and a budding interest in agricultural waste-to-biogas for electricity generation.

Dunhuang, an oasis town in the Gobi Desert on the Silk Road surrounded by sand dunes and gravel wastelands, is becoming a center of wind and solar energy development. An approximately 10,000-megawatt (10-gigawatt) wind installation with more generating capacity than 16 big coal plants is being built. There is also a 100-megawatt solar power plant in the works.

click to enlarge

It is not just China’s Renewable Energy Law that is driving the boom. Boosted by a significant portion of China’s huge stimulus package, the power companies have cash and state-owned banks are anxious to lend them more. Unlike the U.S., regulatory impediments to New Energy and new transmission are minimal in China. And the Ministry of Environmental Protection has temporarily banned 3 of China’s 5 biggest power companies from building new coal plants because of violations of the minimal environmental requirements.

International investment bank HSBC predicts China will invest more in New Energy and nuclear power in the next decade than in fossil fuel-generated electricity capacity. It might even be too much.

European nations like Germany, Spain and Italy have discovered they have to monitor and temper the investment they make in New Energy or they create negative feedbacks, like skyrocketing prices for New Energy raw materials, and unintended consequences, like real estate bubbles in land near transmission systems. Some Chinese officials are concerned about creating the same kind of effects. Already, Chinese wind companies have been observed deliberately underbidding on new project contracts with the intention of renegotiating with the government when a partially completed project gives them leverage.

China's energy establishment. (click to enlarge)

Wind was already booming in China last year. This year, solar power plants got in the game. 3 big projects during the winter were bid at 59 cents per kilowatt-hour. This spring, the Dunhuang 10-megawatt photovoltaic solar power plant was bid at 10 cents per kilowatt- hour. The bid was so low the government had to reject it. The excuse was that the project could only be a loser at that rate. The reality behind the rejection was an awareness of the game the developer was playing.

China Guangdong Nuclear Power Company, entirely state-owned, got the solar installation with a bid of 16 cents per kilowatt-hour. The government took the bid, even though it was way below last winter’s 59-cent price, on the assumption that silicon prices have fallen due to the global financial crisis and reduced demand.

One of many, this one is in Xinjiang. From China Daily via Skyscrapercity. (click to enlarge)

For comparison, coal sells electricity to China’s grid at 4-to-5 cents per kilowatt-hour and wind sells at 7-to-10 cents.

Zheng Shuangwei, China Guangdong Nuclear Power’s general manager, knows 22 or 23 cents is closer to the real cost. But he wants his company to get the job. And he knows the government wants the solar power plant. China’s coal is running out. It probably doesn’t have as much as a half-century of reserves left.

China once planned to transition from coal to hydroelectric power but most rivers have now been dammed, demand for electricity is still rising and, due to global climate change, the drought-diminshed rivers cannot provide the power the nation needs.

WWF doesn't think much of China's efforts but they have only just begun to fight climate change. (click to enlarge)

COMMENTARY
China’s first Renewable Energy Law came in 2007. The NDRC aimed for Chinese power companies to get 8% of their power from New Energy sources by 2010. They are already there. The Law called for 5,000 megawatts of installed wind capacity by 2010. China now has more than that.

Last year, the NDRC said it expected to have 10,000 megawatts of installed capacity by the end of 2010. It recently announced China is likely to have 30,000 megawatts of wind energy installed by the end of 2009. (This year!) 30,000 megawatts was the 2007 Renewable Energy Law’s target for 2020!

The NDRC also upped its target for installed, grid-attached solar capacity from the 1,800-megawatt 2020 goal called for in the 2007 law to 10,000 (!) megawatts. That is ambitious indeed considering that China had no more than 100 megawatts of installed, grid-attached solar energy capacity at the end of 2008.

Under this Spring’s updated Renewable Energy Law, China’s power companies must obtain 10% of their power from New Energy sources by the end of 2010 and 15% by 2020. (The country presently gets 21% of its power hydroelectric energy and 1.1% of its power from nuclear energy. They are excluded from the Renewable Energy Law but the NRDC has also recently announced plans to increase China’s nuclear energy capacity.)

They need to do a little wokrk on siting. From China Daily via Skyscrapercity. (click to enlarge)

The new national targets are aimed at obtaining 1,400-to-1,500 gigawatts of electricity from New Energy, a 50% increase over the 2007 law.

Some NDRC officials have already begun pushing to get a new revision of the Law calling for 18% or 20% by 2020.

The numbers, as with so many of the numbers that describe China, are impressive and seem inordinately ambitious until the picture gets filled in. China’s onshore wind potential alone is estimated at 700-to-1,200 GIGAwatts.

The remote autonomous region of Xinjiang Uygur is estimated to have 100+ GIGAwatts of wind power potential and China’s wind developers are making plans to build 10 GIGAwatt installations there.

China could take over the solar panel manufacturing industry. (click to enlarge)

Even with a recessionary international economy, demand for electricity is expected to rise steadily in China as more of the 720 million aspiring rural Chinese acquire the comforts already a part of the lives of China’s urban 606 million.

The massive New Energy building in undeveloped regions like those around Dunhuang are indicative of what the Chinese government intends to do to meet demand. Projects in such remote and underpopulated regions are not without obstacles. Desert sandstorms are expected to render Dunhuang’s solar power plant panels useless until they are cleaned, after each storm, by workers with feather brushes.

Wind projects have yet to be reached by the national transmission system. On the windiest days, only half the power generated ever gets delivered.

Nonetheless, both local and federal officials are pushing for more projects. Improved New Energy technologies, such as solar panels that generate in even compromised circumstances and wind turbines that more efficiently utilize difficult wind conditions, make investment more economic.

Though China's drive for New Energy is good news in the fight against climate change, it is not merely environmental inspiration that is driving the Chinese government. It is a matter of meeting energy generation goals. As for Dunhuang’s leaders, there are jobs and revenues and local energy sources to be had.

A 3-megawatt turbine going up in the Shanghai East Sea Bridge 100-megawatt offshore wind farm, China's first offshore project. From China Daily via Skyscrapercity. (click to enlarge)

QUOTES
- Steve Sawyer, secretary general, Global Wind Energy Council: “[Each of 6 wind installations now under construction] totally dwarfs anything else, anywhere else in the world…”
- Li Junfeng, deputy director general for energy research, China economic planning agency and secretary general, China Renewable Energy Industries Association: “The problem is we have so many stupid enterprises…”
- Zheng Shuangwei, general manager for northwest China, China Guangdong Nuclear Power Company: “[16 cents per kilowatt-hour for solar power plant-generated electricity] is not a proper price…It’s a bidding rate that is the result of competition.”
- Wang Yu, Chinese vice director of economic planning: “It’s the Gobi Desert…There’s not much other use for it.”
- Zhang Xiaoqiang, vice-minister in charge of international cooperation, NDRC: "Personally, I think we could reach the target of having renewable sources make up 20 percent of total energy consumption…"
- Xiao Ziniu, director, China National Climate Center: "We have great renewable resources to explore…"