Tuesday, September 7, 2010

First Solar Deal in Inner Mongolia "Fizzles"

Hey all,

An interesting update to the First Solar project in Ordos, Inner Mongolia that we were able to hear first hand about from the project manager last spring.


See you on campus in a few weeks!


Monday, August 30, 2010

China-Russia Crude Oil Pipeline Begins Operations

China-Russia Crude Oil Pipeline Begins Operations
Associated Press / August 29, 2010

SHANGHAI (AP) -- Russia has opened its section of a crude oil pipeline from eastern Siberia to China, a major step in expanding energy cooperation between the neighboring powers.

The 1,000-kilometer (625-mile) pipeline will connect Russian oil fields with Daqing, a major oil production base in northeastern China.

''For China, this will help stabilize its energy supplies and security. For Russia, this offers a new market for exports to the Asia-Pacific region, especially dynamic and developing China,'' the state-run China National Petroleum Corp. quoted Russian Prime Minister Vladimir Putin as saying, in a statement issued Monday on its website.

Russia is the world's biggest energy producer and China is the world's largest energy consumer, overtaking the United States last year. Although Europe remains Russia's largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.

Speaking at the ceremony Sunday in the Russian city of Skovorodino marking the pipeline's opening, Putin said cooperation would not be limited to oil exports. Russia welcomes Chinese help in exploiting its abundant resources in the Far East and in expanding refining and marketing, he was quoted as saying.

The Chinese segment of the pipeline is still under construction but is expected to begin operations before the year's end, the statement said.

Eventually, the pipeline is to provide 30 million tons of oil a year to China, with exports to the Asia-Pacific region expanding to a total of 50 million tons a year, Putin was quoted as saying.

During a visit by Putin to Beijing late last year, Russia signed dozens of commercial pacts worth $3.5 billion and set the framework for a separate, multibillion-dollar agreement to build two natural gas pipelines to China from gas fields in Russia's Far East that would provide supplies almost matching China's current consumption.

Thursday, August 26, 2010

Leadership Planning: Berkeley-Stanford CleanTech Conference, Aug. 31st in SF

I need to make a correction, I meant Tuesday Aug. 31st, not Wednesday.

Corrected note below:

Interested in deep diving into one area of cleantech? Want to meet C-level executives of exciting global cleantech companies? Have leadership abilities or want to work on them?

I am excited to announce the 6th Berkeley-Stanford Cleantech Conference kick-off meeting. The Berkeley-Stanford Cleantech Conference Series is a student-led organization founded in 2007 to bring together students and alumni at UC Berkeley and Stanford University as well as key members of the academic, policy and business communities in the Bay Area and beyond. Each conference discusses focused cleantech topics from the technology, entrepreneurial and policy standpoints, to find long-lasting solutions to climate change and other current energy challenges.
This May we held our 5th successful conference “Electric Car2.0: Who Will Win the Race – Innovation, Policy, China” in downtown San Francisco. The 300-seat event sold out and was attended by a mix of 30% students and 70% professionals. We featured speakers from respected VC firms, electric vehicle entrepreneurs, utilities, policy and research firms.

Our immediate goal is to recruit the next generation of students passionate about cleantech to take leadership of this conference series for the November 2010 conference. Thus, we will continue to break the silos, cross-pollinate projects and ideas around specific cleantech topics and advance cleantech solutions to the biggest energy challenges of our times - climate change at the top of the list.
The kickoff meeting will take place on Tuesday, August 31st from 7pm to 9pm in downtown San Francisco –

The Landmark at One Market St. (5th Floor), San Francisco. The agenda for the meeting is as following:

7:00 – 7:30pm: Networking over pizza and beverages (provided by the organizers)
7:30 –8:00pm: Outgoing leadership team presentation –conference goals, format and key success factors
8:00 – 8:30pm: Organization guidelines – suggested team structure, planning schedule and proposed topics
8:30 – 8:45pm: Q&A and next steps

This event is a great opportunity to get involved in cleantech, network among leading professionals and students in this field and join like-minded folks in a project or a company.

If you want to be involved in the planning team for the 6th conference, please attend our kick-off meeting next Tuesday, August 31st at 7pm. Also, see our website here for more information.

For building security and pizza preferences, please RSVP before 5pm Monday, August 30th at: http://www.surveymonkey.com/s/H83SJ7Z.

Thanks and I look forward to seeing you next week.

Elaine Kan, Chair of the 5th Berkeley-Stanford CleanTech Conference

Leadership Planning: Berkeley-Stanford CleanTech Conference, Aug. 31st in SF

Interested in deep diving into one area of cleantech? Want to meet C-level executives of exciting global cleantech companies? Have leadership abilities or want to work on them?

I am excited to announce the 6th Berkeley-Stanford Cleantech Conference kick-off meeting. The Berkeley-Stanford Cleantech Conference Series is a student-led organization founded in 2007 to bring together students and alumni at UC Berkeley and Stanford University as well as key members of the academic, policy and business communities in the Bay Area and beyond. Each conference discusses focused cleantech topics from the technology, entrepreneurial and policy standpoints, to find long-lasting solutions to climate change and other current energy challenges.

This May we held our 5th successful conference “Electric Car2.0: Who Will Win the Race – Innovation, Policy, China” in downtown San Francisco. The 300-seat event sold out and was attended by a mix of 30% students and 70% professionals. We featured speakers from respected VC firms, electric vehicle entrepreneurs, utilities, policy and research firms.

Our immediate goal is to recruit the next generation of students passionate about cleantech to take leadership of this conference series for the November 2010 conference. Thus, we will continue to break the silos, cross-pollinate projects and ideas around specific cleantech topics and advance cleantech solutions to the biggest energy challenges of our times - climate change at the top of the list.
The kickoff meeting will take place on Wednesday, August 31st from 7pm to 9pm in downtown San Francisco – The Landmark at One Market St. (5th Floor), San Francisco.

The agenda for the meeting is as following:
7:00 – 7:30pm: Networking over pizza and beverages (provided by the organizers)
7:30 –8:00pm: Outgoing leadership team presentation –conference goals, format and key success factors
8:00 – 8:30pm: Organization guidelines – suggested team structure, planning schedule and proposed topics
8:30 – 8:45pm: Q&A and next steps

This event is a great opportunity to get involved in cleantech, network among leading professionals and students in this field and join like-minded folks in a project or a company.

If you want to be involved in the planning team for the 6th conference, please attend our kick-off meeting next Wednesday, August 31st at 7pm. Also, see our website here for more information.

For building security and pizza preferences, please RSVP before 5pm Tuesday, August 30th at: http://www.surveymonkey.com/s/H83SJ7Z.

Thanks and I look forward to seeing you next week.

Elaine Kan, Chair of the 5th Berkeley-Stanford CleanTech Conference

Wednesday, August 11, 2010

Mayor of Shanghai?

Hi all,

I was asked by my manager if I thought the mayor of Shanghai would make a good conference keynote speaker. Has anyone heard him speak or seen an videos of him they can share (didn't find any on YouTube).

Summer has been treating me well, I hope you are all enjoying yours, too!


Monday, May 17, 2010

Indoor air kills 2.2 million young Chinese

Via Lynn Hildemann and Sandy Robertson.


Indoor air kills 2.2 million young Chinese: report

BEIJING (AFP) – More than two million Chinese youths die each year from health problems related to indoor air pollution, with nearly half of them under five years of age, state media cited a government study as saying.

The study released by the China Centre for Disease Control and Prevention said indoor pollution levels can often be 5-10 times higher than those measured in the nation's notoriously bad outdoor air, the China News Service said.

A baby wearing a mask is held at a hospital in Beijing. More than two million Chinese youths die each year
from health problems related to indoor air pollution, with nearly half of them under five years of age,
state media cited a government study as saying

This indoor pollution causes respiratory and other conditions that kill 2.2 million youths each year, one million of whom are under the age of five, the report said, citing the study released on Sunday.

AFP was not immediately able to obtain a copy of the study.
The study said dangerous indoor pollutants include formaldehyde, benzene, ammonia and radon.

It said formaldehyde posed the biggest threat. It is often found in building materials and new furniture in China and can be slowly released into indoor environments over the course of several years.

It said long-term exposure to such substances can cause a range of health problems including respiratory diseases, mental impairment and cancer, with young children, foetuses in utero and the elderly at most risk.
China's massive economic expansion of the past three decades has made it one of the world's most polluted countries as environmental and health concerns are trampled amid an overriding focus on industrial growth.

Countless cities are smothered in smog while hundreds of millions of citizens lack access to clean drinking water.

A 2007 World Bank report said 750,000 Chinese die prematurely each year due to air and water pollution -- a figure edited out of final versions of the report, reportedly after China warned it could cause social unrest.

URL: http://news.yahoo.com/s/afp/20100517/ts_afp/healthchinapollution

Saturday, May 1, 2010

Daily Article

The feature I wrote ran in the Daily yesterday. Unfortunately, the editing took away my voice, the excitement, and all of the fun parts (there's no way would willingly omit karaoke from the article), so I'm posting both versions.


The Coolest Field Trip Ever?
China Energy Systems Field Trips—CEE 276F—visited China during Spring break to get a firsthand look at its rapidly developing energy infrastructure. On Thursday night, they shared their experience with the Stanford community in a talk titled “Meeting the Energy and Environmental Challenge.”

“If there is one word for China it is ‘scale’,” said Stanford energy professor Jane Woodward.  Despite inhabiting a land area similar in size to the United States, China’s population is five times larger, and the majority lives in an area half the size of the US.  Consider the 9% annual economic growth, and the required supporting energy, electricity, urbanization, and manpower, you begin to get an idea of just how huge it is.

The scale—and rapid development—of China is what makes it a pivotal player in the global energy system.  Over Spring break, 30 Stanford students had the opportunity to see just how expansive China’s energy infrastructure is.  From March 19th to 31st, the China Energy Systems Field Trip class, or CEE 276F, traveled from the capital, Beijing to the far reaches of Inner Mongolia, Yichang, Shanghai, and seven provinces in between.  Led by Woodward and Director of Sustainable Energy Education Karl Knapp, the class, which has been offered three times, every other year during winter quarter, provides a unique opportunity during spring break for a more “hands on” approach to energy education.

“Students studying energy typically have fewer opportunities to see energy facilities for themselves, or to talk to decision makers in person.  Our visit to China is an effort to correct this unfortunate trend,” said Knapp and Woodward in a written overview of the trip.  MAP Royalty, a private firm that acquires and manages natural gas and renewable energy royalties, played a large role in funding the trip as one of its sustainable energy education initiatives.

“I have every reason to believe that this trip accomplished its goal of taking 30 Stanford students committed to spending their careers in the energy/environment arena – on a trip that they will never forget,” said Woodward, who also serves as CEO of MAP Royalty.

The trip proved to be an unforgettable experience for all students involved, myself included.  China itself is expansive, our trip could be summarized as “superlative.”  Whether it was the largest dam in the world, the leading solar thermal manufacturer, or the most efficient coal power plant in the world, we saw some truly unique places, and were able to put some of the facts we had learned about China in a real physical context.  But it wasn’t just the places that made the trip incredible.  It was the scope of the trip, and the breadth of information we were able to absorb in just twelve days.

“We went all over China.  In one day we passed through four provinces in seventeen hours,” said Sam Ramirez, ‘10.  While the rate of four provinces per day was a one-time occurrence, all of our days were just as hectic, in the rare case when they weren’t even more so.

Despite the nonstop pace and limited sleep schedule, we managed to experience a bit of culture, most often in the form of karaoke.  “Evidently, karaoke is considered one of the basic human needs along with food, shelter and water,” said Brad Copithorne, MS ’10.  Indeed, there seemed to be a karaoke club within a block of, if not in, every one of our hotels.  Even our bus became a karaoke haven when Knapp figured out how to connect iPods to the bus’s microphone system.

I only hope no one recorded my performances.


As United flight 889 descended into the Beijing airport, I pressed my nose against the window.  Land use zoning regulations seemed nearly non-existent, as industrial complexes, garbage dumps, residential areas, and sheep pastures, all adjacent to one another, spotted the landscape below.

Once we touched down, 30 students, groggy with jetlag and armed with quarantine and foreign visitor forms, meandered slowly through customs.  After Charlie Lannin’s, ’11, brief detainment with Chinese authorities—something about a stuffy nose—we loaded into the bus, ready for the dusty, smoggy, coal-filled country awaiting our arrival.

Twenty four hours, an acrobat show—”a little known but pretty cool fact is that the Chinese can actually control gravity,” said Brenden Millstein, MBA/MS ’10—a duck dinner (complete with duck brain), Tiananmen Square and Forbidden City tours later, we met with some of the energy experts whose policy we had been studying so extensively in the winter quarter class.

In a traditional Chinese teahouse, we met with representatives from the Natural Resources Defense Council, (NRDC), a U.S. environmental NGO with offices in Beijing.  Woodward’s relationship with the NGO is what inspired and spurred the trip, and the meeting began to contextualize China’s expansive energy system in which we were about to immerse ourselves.

Over the next 10 days, we managed to fit in an exceptional amount of visits.  NRDC, WWF, Tsinghua University, Himin Solar, Goldwind, Petro China/Shell, Ordos Xingxing LNG facility, Guyang Damao Wind Farm, Three Gorges Dam, Waigaoqiao Coal Power Plant, and the Shanghai Energy Conservation Museum were only some of the organizations with whom we met or received a tour.

While I could write 20 pages about any one of the tours we received, the ones that stand out most vividly are the ones that are the largest, most remote, or most something in the world.

Take the Three Gorges Dam, for example.  If you’re envisioning a dam disappearing into the mist as it spans the Yangtze, an endless quantity of cement, and the most transmission lines you’ve ever seen in one place, then you’re spot-on. “[It’s] like the Hoover Dam, except five times as long (more than a mile across!), just as high (185 meters tall), and generates more than 10 times the power,” said Millstein.

Then there was the 5 GW coal power plant outside of Shanghai, which pumps out enough juice to provide 10% of California’s peak power demand.  With ultra super-critical (read: “clean”) coal technology, the Waigaoqiao Coal Power Plant is the second largest—and most efficient—coal plant in the world. But it doesn’t end there.

We also visited Ordos Basin in Inner Mongolia, the remote natural gas capital of China.  More natural gas is produced there than in any other region of the country, and we had the opportunity to tour one of the only inland liquefied natural gas (LNG) plants in the world.  The road to it was barely wide enough for our bus to avoid a head on collision with an LNG truck, but somehow we made it through unscathed.  “Neither our bus nor this tricycle vehicle fell off the road the way it felt we would,” said Woodward.

We also toured renewable power and manufacturing plants, primarily wind and solar facilities. “We dream that all Chinese people know and consume solar energy,” reads a Himin Solar—China’s dominant solar thermal manufacturer—billboard.  In a visit to Himin’s Dezhou headquarters, we experienced the dream in the form of a solar valley: a half-built city complete with high-end condos and a resort, running almost entirely on renewable energy.  Which makes sense, but kind of doesn’t since there’s not a lot of visible sunlight in China.  Or at least there wasn’t when we were there.

The reason?  Air pollution.  With the “super efficient” coal power plants, abundant renewable energy resources, and government incentives for clean power, it’s easy to forget that two new coal plants are coming online every week in China.  Until you go outside—then it’s impossible to forget. “No sun either, just an angry red blotch futilely trying to break through the gray-yellow mono-cloud of particulate matter holding the world hostage in the strong arms of haze,” as Millstein put it.


Twelve days, seven provinces, five power plants, two manufacturing plants, and endless particulate matter exposure later, we boarded the plane back to San Francisco.

Despite the dominance of coal, visible in sky and city, our trip showed how committed China currently is to a renewable energy future.  Through scale, speed, and low cost—the themes of Thursday’s presentation—China is rapidly developing an expansive renewable energy system.

But the rise of renewable energy in China wasn’t the only sign of hope we encountered on our journey.  “I think my favorite thing on this trip has actually been the group of 30 engineers I've been traveling with. Everyone is super warm, welcoming, fun/interesting to talk to, smart, stunningly non-cliquey and open, and every single one is trying to stop climate change,” said Millstein.

Given Stanford’s amazing sustainable energy education and the incredible group of people with whom I journeyed through China, I would say it’s a challenge we’re willing to confront.

Wednesday, April 21, 2010

Challenging China in Rare Earth Mining

Challenging China in Rare Earth Mining

The New York Times
April 21, 2010
By Keith Bradsher

On a high plateau wandered by burros and jack rabbits an hour’s drive southwest of Las Vegas, a chasm hewn from volcanic rock sits at the center of an international policy debate.

The chasm, in Mountain Pass, California — 400 feet, or 120 meters, deep — used to be the world’s main mine for rare-earth elements, minerals crucial to military hardware and the latest wind turbines and hybrid gasoline-electric cars. Molycorp Minerals, which owns the mine, announced Monday that it had registered with the U.S. Securities and Exchange Commission for an initial public offering to help raise the nearly $500 million needed to reopen and expand the mine.

Molycorp is making a big bet that its mine, now a rusting relic, can be made competitive again. Global demand is surging for the minerals. And customers, particularly the U.S. military, are seeking alternatives to China, which now mines 97 percent of the world’s rare-earth elements.

Sunday, April 18, 2010

Chinese Dams in this issue of "Science"

Science 12 March 2010:
Vol. 327. no. 5971, p. 1311
DOI: 10.1126/science.327.5971.1311



Severe Drought Puts Spotlight on Chinese Dams

Richard Stone
XISHUANGBANNA, CHINA—Smoky haze hangs over the hills in this subtropical corner of China bordering Laos and Myanmar. The smoke is familiar: During the dry season, farmers across Yunnan Province burn fallen leaves, banana fronds, and more to make ash-based fertilizer. More unusual here, and more troubling, are the sickly yellow bamboo stands and the exposed bed of the Lancang River. "It's the worst drought in that region since 1949," the founding of the People's Republic of China, says Lu Juan, vice director of the Institute of Water Resources and Hydropower Research in Beijing.
Southwest China's monsoon-driven climate doesn't bring much precipitation in autumn and winter. But this year's dry season—coupled with a late start and early end to last year's rainy season—has left the region parched. Yunnan officials estimate that some 6 million people are short of drinking water and that the dry spell has ravaged winter wheat and other crops, inflicting $1.5 billion in losses.
The drought's effects have spilled across China's borders, stoking tensions with neighbors and prompting scientific debate. Rice yields in Thailand are expected to take a big hit, and the Mekong River—the name for the Lancang south of China—is in many stretches less than a meter deep, its lowest level in decades, making it impassable to tour boats and cargo ships. Researchers worry about how the low water level may affect fisheries and critically endangered species such as the Mekong giant catfish, which in the coming weeks would normally spawn in the upper Mekong.
Environmental groups in Thailand and elsewhere lay at least part of the blame on China's doorstep. They claim that China's management of a series of dams on the Lancang has aggravated the unfolding crisis. The Thai media has helped stir up emotions; one editorial in the Bangkok Post last month was headlined "China's dams killing Mekong." Yet Chinese engineers and some other scientists say the criticism is unfounded.
Rising tensions in Asia could usher in a protracted regional conflict over resources, especially as many key rivers cross several borders. In Asia, "competition for transboundary water utilization will be fierce," says He Daming, director of the Asian International River Centre of Yunnan University in Kunming. China will be at the center of many squabbles. With some 110 rivers and lakes straddling its borders with 19 countries, says He, "China is the most important upstream riparian country in Asia, even in the world."
A major feature in this vast waterworks is the 800,000-square-kilometer Lancang-Mekong basin, home to some 60 million people. From glacier-fed headwaters on the Qinghai-Tibetan plateau, the Lancang wends 2160 kilometers through southwestern China before entering the Golden Triangle region of Burma, Laos, and Thailand. The river finally spills into the South China Sea off Cambodia. In the late 1980s, China began work on eight cascades, or hydroelectric dams, on the Lancang's lower reaches, aiming to supply 15.6 gigawatts a year. Four have been completed, including Xiaowan, the tallest at 292 meters.

Some environmental groups contend that the Mekong flow regime has been altered by dredging and dam construction, suppressing fish catches. Living River Siam, a nonprofit based in Chiang Mai, Thailand, has called on governments to "immediately stop all works on hydropower and river development on the Lancang-Mekong."
Yet the dams on the lower Lancang reduce runoff only during the rainy season, when reservoirs are filling, according to Chen Guanfu of Hydrochina Corp. Dry season water releases should increase river volume by 35%. "There are a lot of accusations that the dams in China are exacerbating the current low water levels, but the Chinese have informed [downstream nations] that they will not fill any reservoir during the dry season," says Roger Mollot, a fisheries expert with the World Wide Fund for Nature in Vientiane, Laos. The dams would also help rein in flooding, says Zhou Shichun of the General Institute of Hydropower and Water Resource Planning and Design in Beijing.
The biggest ecological impact could be less sediment swept downstream as silt accumulates in the reservoirs. But that would be a good thing, Zhou insists: It would "facilitate irrigation and navigation" on the Mekong. Others, however, point out that decreased sediment loads will likely lead to erosion of downstream riverbanks and the Mekong Delta.
Hydropower authorities have taken ecological effects into consideration, Zhou says. Work on one dam—the Mengsong Cascade, which would be sited nearest the border—has been postponed indefinitely, he says, to protect four species of migratory fish, including the giant pangasius (Pangasius sanitwongsei), whose conservation status is uncertain (Science, 22 June 2007, p. 1684). The freshwater goliath has not been reported above the Mengsong dam site, so the other dams would not affect it, Zhou says.
The first victim of an ecological crisis could be the Mekong giant catfish, which has been on the ropes for years. "It isnot clear if the current drought conditions will impact successful spawning of the wild population of giant catfish, but low water levels may make them more vulnerable to fishing pressure," says Mollot.
Things may get worse due to climate change. After examining weather and tree ring data, Fan Ze-xin, a tree physiologist at Xishuangbanna Tropical Botanical Garden, has found that in the past 40 years Yunnan has grown warmer and drier—a trend that started long before the dams were built. In a nature reserve near the botanical garden, he grabs leaves from a seedling; dry as parchment, they disintegrate. "Some of these leaves are fresh," Fan says. "I haven't seen it as bad as this."

Thursday, April 15, 2010

China + Brazil = Oil!

Just a random doc that may pique some people's interest.
More international cooperation beyond Shell & PetroChina.

Cooperation Agreement with China
Rio de Janeiro, April 15th, 2010 – Petróleo Brasileiro S.A. – Petrobras announces that today it signed a Strategic Cooperation Agreement with China Petrochemical Cooperation (SINOPEC) and China Development Bank Corporation (CDB) aimed at assessing mutually beneficial opportunities on the areas of cooperation. The Agreement is a development of the Memorandum of Understanding (MOU) signed between Petrobras and SINOPEC on May 19th, 2009.
The Agreement includes the cooperation between Petrobras and Sinopec in the following areas: Exploration & Production (E&P); Downstream; Petrochemical and fertilizers; and Services and Procurement.
In the E&P area there stands out the intention of the parties to assess future partnerships, including the possibility of selling part of Petrobras’s interest in blocks BM-PAMA-3 and BM-PAMA-8, located in the Pará-Maranhão Basin.
In Downstream and Petrochemical, the parties intent to assess opportunities for partnership in the Petrochemical Complex of Rio de Janeiro – Comperj, besides the possibility of new oil supply contracts to SINOPEC.
In addition, the Agreement includes the cooperation with CDB in relation to the possibility of bilateral financing under the scope of the Cooperation Agreement, to be negotiated between the parties by Petrobras demand.
Investors Relations

Wednesday, April 7, 2010

More Capital/Overcapacity for Wind in China?

From the Wall Street Journal's China RealTime Report
(March 31, 2010)

Gone With The Wind: Capital for China’s Turbine Makers

“A great wind is blowing, and that gives you either imagination or a headache.” Catherine the Great surely was referring to capital raising for China’s wind turbine makers. As Dow Jones Investment Banker reports, for them, a headache is more likely.

Wind turbines in Gansu province, China
Last year was a good time for China when it became the largest wind market by annual installed capacity at 13 gigawatts, according to the Global Wind Energy Council.

Unfortunately that growth heralds overcapacity for Chinese turbine makers, suggesting a shake-out for some smaller names after 2009’s aggressive build out. That should, of course, play to survivors’ advantage in the long-term.

Meanwhile, for the clutch of wind-farm operators reportedly toying with a Hong Kong listing the business outlook is probably better, though the recent IPO market hasn’t been forgiving.

Favorable macro-tailwinds and preferential policy over the last five years have helped China’s wind industry. For example, farm operators are aided by on-grid tariffs for wind being higher than fossil fuels’, while local component-makers gain from rules ensuring at least 70% of turbine components by purchase value are made domestically.

And in the seven years to 2008 electricity generation grew at a compound annual growth rate of 12.8%, eclipsing China’s real GDP CAGR of 10.5% over the period.

And the bad news?

First: friendly market-share rules don’t translate into supporting margins when new entrants flood in.
Turbine makers, for example, have increased from six before 2005 to around 70 today. Meanwhile Xinjiang Goldwind Science & Technology Co. Ltd., one of the country’s top three turbine manufacturers by sales, saw its Ebit margins decline to 16.7% last year against 21.5% in 2006.

Smaller, unlisted firms likely experienced a similar trend, aggravated by lower margins given their higher operating leverage.

With farms shifting toward larger turbine sizes manufacturers are being pushed into capex for new production and R&D in an already highly competitive market.

Additionally, big farm operators gravitate to suppliers with a performance history, which favors larger, established outfits. China Longyuan Power Group Corp. - China’s largest wind-farm operator by capacity - sourced three-quarters of its turbine capacity from Gamesa and Goldwind at the end of June last year. This implies the domestic component sector is primed for realignment, especially among the second tier makers. That isn’t a great backdrop for listings or capital raising but survivors’ margins should benefit from less competition.

Wind farm operators -China Huaneng Group and China Datang Corp,’s renewable power unit - may have better prospects given superior earnings visibility over turbine assemblers.

Longyuan floated in Hong Kong in December. It has outperformed the MSCI China index by 5.9% since debuting - yes, with a somewhat erratic trajectory -making it one of the Hong Kong’s more successful IPOs since December.

A composite index of renewable energy power providers China Windpower Group Ltd. and China Power New Energy Development Co. has outperformed the MSCI China by about 30% over the past six months.
However, in contrast with most of Asia, both mainland and Hong Kong equity markets have logged negative returns since January and foreign fund flows into Chinese equity markets have been poor lately, underscoring the tougher environment for IPOs there.

Moreover, internal rates of return for 50 megawatt farms are around 10%, industry observers say, which sounds respectable, until you read Credit Suisse’s estimate that a 40%-equity financed 50MW Chinese wind farm probably generates a return on equity of some 4-6%.

That could be juiced with leverage but, with Chinese monetary and lending policy tightening, that mightn’t be so easy or appealing for equity investors.

So Chinese wind farm operators may still have their work cut out convincing investors that now is the time to bet on wind.

– Jamie Miyazaki


Tuesday, April 6, 2010

Berkeley-Stanford CleanTech Conference on EVs & China!

Hi Everyone,

Some of you know this but I'm chairing the next Berkeley-Stanford CleanTech Conference on Cinco de Mayo. Our topic is on electric transportation with a special panel on China - Opportunities and Challenges. I'm excited to have the CEO of Simbol Mining, who will speak to the issue of lithium and China's rare earth metals policy.

Please help spread the word! Also, we're seeking sponsorship funds, so if anyone has any contacts, I would love to hear about them.

See you at Jane's,



The Berkeley-Stanford Cleantech Conference team is excited to announce our next conference series, Car 2.0 - The Race for Electric Transportation Leadership, to be held on May 5, 2010 at the PG&E Headquarters in downtown San Francisco. This conference will provide information on the past, current and future state of the electric transportation industry from technology, policy and global business perspectives. Dian M. Grueneich, Commissioner of the California Public Utilities Commission, will be delivering the keynote address. Below are the conference details:

Theme: Car 2.0 - The Race for Electric Transportation Leadership
Date: Wednesday, May 5, 2010
Time: 11AM - 6PM
Location: PG&E General Office Conference Center, 245 Market Street, Rm105, San Francisco, CA

Tickets for the event will go on sale shortly. For more information, please see the attached press release, and visit http://bscleantech.org . We hope to see you there!

Keynote Address by
  • Dian Grueneich, Commissioner of CPUC

Technology and Infrastructure Development

  • Mark Duvall, Director at Electric Power Research Institute
  • John Boesel, Pres/CEO at Calstart
  • Saul Zambrano, Director Integrated Demand Side Management Product Portfolio at PG&E
  • More speakers still to confirm

China - Opportunities & Challenges

  • Eric Wesoff, Journalist at GreenTech Media
  • Jit Bhattacharya, CEO of Mission Motors
  • Roland Hwang, Transportation Program Manager at the Natural Resource Defense Council
  • Marc Gottschalk, Partner at Wilson Sonsini & Rosati
  • Luca Erceg, President, CEO & Founder of Simbol Mining Corp.

Panel 3: Policy and Economics of Electric Transportation

  • Lee Schipper, Professor at Stanford University
  • Mike Granoff, Head of Oil Independence Policies at Better Place
  • Bob Hayden, Clean Transportation Advisor to SF Government
  • Rod Diridon, Executive Director of Mineta Transportation Institute (MTI)
  • More speakers still to confirm

Sunday, April 4, 2010

One consequence of China's coal imports - the risks of shipping

Chinese Freighter Slams Into Great Barrier Reef

The Chinese carrier Shen Neng 1 ran aground and was leaking oil around the Great Barrier Reef off of Australia.

By Keith Bradsher
Published: April 4, 2010 (The New York Times)

HONG KONG — A large Chinese freighter carrying coal to China ran aground late Saturday on a section of the Great Barrier Reef off Australia, raising fears that it might leak engine fuel on coral in its immediate vicinity.

The Shen Neng 1 crashed into the reef at full speed a few hours after leaving the port of Gladstone, the Australian authorities said. The ship, which was nine miles outside its authorized shipping lane, was hauling 72,000 tons of coal and had 1,000 tons of bunker fuel aboard.

Australian officials warned that the vessel was in danger of breaking apart, and there were reports on Sunday night of traces of oil already leaking from the vessel. An Australian aircraft reportedly dropped chemical dispersants on the oil.

Basil M. Karatzas, a project manager at Compass Maritime Services, a ship broker in Fort Lee, N.J., said that it was not unusual that the 755-foot Shen Neng 1 would be carrying that much oil. A ship of that size and design would burn about 35 tons of fuel a day, he said, and would require at least two weeks to sail from eastern Australia to China.

Ships headed to China carry extra fuel to be ready for long delays on arrival, as port delays are common because commodities are pouring into the country to sustain its economic boom. Depending on the fuel’s density, the amount carried by the Shen Neng would equate to about 300,000 gallons.

“Weather permitting, they should be able to pull the oil off the vessel,” Mr. Karatzas said. As to the ship’s cargo, he added, coal is much less toxic than oil, but it could blanket the sea bottom if the ship comes apart.

China is the world’s largest consumer of coal, burning more than the United States and the European Union combined. China has rapidly increased its imports in the past year, partly because domestic supply has not increased fast enough to keep up with power plants coming into use.

Coal imported from Australia, Indonesia and the Philippines also tends to burn much more cleanly than the mostly low-quality coal mined in China, and the Chinese government has been putting ever greater pressure on coal-fired power plants to manage their pollution.

Relations between China and Australia have frayed since a Chinese court imposed prison sentences of seven to 14 years on four executives of Rio Tinto, an Australian mining company. The executives pleaded guilty to accepting $13.5 million in bribes to influence their allocation of scarce iron ore to Chinese steelmakers.

Rio Tinto dismissed the executives, but the Australian government criticized the harshness of the seven-year sentence for bribery imposed on Stern Hu, an Australian citizen who was among the four.

Australia’s environmental movement is very sensitive to any threat to the Great Barrier Reef, making it likely that a full investigation will be carried out into how the Shen Neng 1 strayed so far off course. It ran aground near Great Keppel Island off eastern Australia, nearly halfway off the coast between Brisbane and Cairns, in an area of the reef that is subject to especially stringent environmental restrictions and that is popular with sport fishermen.

“Australia is one of those jurisdictions that doesn’t take these things lightly,” Mr. Karatzas said.

An Australian police boat was nearby to rescue the crew of 23 if the vessel did break up.

Wednesday, March 17, 2010

China to Restrict Polysilicon Production (GreenTech Media)

China to Restrict Polysilicon Production

Solar demand is growing, but China wants to prevent a bust.

China will issue detailed entry standards for domestic polysilicon companies, a measure designed to prevent a production boom/bust cycle.

In 2009, China's estimated polysilicon production output skyrocketed by 300% against 2008 levels to reach 18,000 tons, fulfilling half of domestic demand. These data were reported by Li Baoshan, secretary general at Beijing-based Chinese Renewable Energy Society, on March 16 at Shanghai's 6th China SoG Silicon and PV Conference (CSPV).

Thanks to a flood of new entrants in 2008, Chinese polysilicon production output broke into the five-digit numbers for the first time. However, that surge has also brought worries about oversupply, as capacity for the country's completed projects, under-construction projects and planned projects reached about 44,000 tons, 68,000 tons and 126,700 tons respectively as of September 2009, according to Wang Bohua, deputy counselor of China's Industry and Information Technology Ministry.

Meanwhile, Mr. Wang reported that the upcoming entry standards will follow the government plan issued last September, restricting new polysilicon projects with less than 3,000 tons of annual capacity and high power consumption. However, Mr. Wang declined to disclose the issue date and other details.

Another variable that will impact China's polysilicon production is the central government's plan to set up silicon products standards based on market demand and producers' technical levels, he added.

Statistics from China's Industry and Information Technology Ministry show that mainland China produced over 4,000 megawatts of PV cells in 2009, using about 32,000 tons of polysilicon in the process.

Tuesday, March 16, 2010

High-speed China changes rail landscape

High-speed China changes rail landscape

Financial Times
By Jamil Anderlini in Beijing
Published: March 16 2010

For decades the high-speed railway sector has been dominated by a handful of companies in Europe, Japan and North America, which have mostly concentrated on projects in their own regional markets.

But just as the industry is witnessing a proliferation of high-speed rail projects across the globe, the rapid rise of Chinese state-owned rail producers is posing a serious threat to the dominance of companies such as Germany’s Siemens, France’s Alstom, Canada’s Bombardier and Japan’s Kawasaki.

“Chinese companies are changing the landscape of the global railway market because of the dimensions of their home market and because they are becoming involved in international tenders, which is new,” said Dominique Pouliquen, Asia-Pacific managing director for Alstom.

Monday, March 15, 2010

US lawmakers attack China ahead of Nov. elections

WASHINGTON — China is once again the country Congress loves to hate.

After a lull last year, U.S. politicians jockeying ahead of crucial November elections have stepped up attacks on China as a way to win support from voters worried that the Asian power is taking American jobs.


Wang Baodong, spokesman for the Chinese Embassy in Washington, said his country's currency policies "are above blame." He urged Americans to make a "fair and objective assessment on this and not mix things up with domestic politics."


In tough economic times, U.S. lawmakers often lock onto a foreign country they can blame. In the 1980s and 90s, it was Japan. Over the last decade, China has become a reliable punching bag, especially during election season. As China continues to boom and America continues to hurt, the congressional urge to punish Beijing will grow.

China Idles 40% of Windpower Turbine Output Capacity (Update5)


Methane Hydrates in Qinghai Province

Just don't ask us to live anywhere near there ... lol

Buried below the tundra of China’s Qinghai-Tibet Plateau is a type of frozen natural gas containing methane and ice crystals that could supply energy to China for 90 years. China discovered the large reserve of methane hydrate last September, and last week the Qinghai Province announced that it plans to allow researchers and energy companies to tap the energy source. Although methane hydrate is plentiful throughout the world, the key challenge for China and other nations will be to develop technologies to excavate the fuel without damaging the environment. http://www.physorg.com/news187622107.html

China to move ahead on clean energy "combustible ice"

China moves into S. America

Deal for South American Oil Fields Extends China’s Global Quest for Energy

China’s top offshore oil explorer, said on Sunday that it had secured a South American beachhead by agreeing to pay $3.1 billion in cash for a stake in one of the largest Argentine oil explorers, with fields in Argentina, Bolivia and Chile.
Kin Cheung/Associated Press
Cnooc's chief executive, Fu Chengyu, said the company's deal with Bridas of Argentina was “to expand our global footprints.”
The acquisition is the Chinese oil industry’s latest move to expand its reach around the world. Starting at the beginning of the decade, companies like PetroChina, Sinopec and Cnooc began buying assets across Africa, Asia and the Middle East to drive the country’s booming economy. More recently, they have struck deals to develop Iraq’s huge reserves and Canada’s oil sands.
Cnooc, a unit of the China National Offshore Oil Corporation, said it would form a joint venture with the Argentine oil explorer, Bridas Energy, by acquiring a 50 percent share in one of the company’s subsidiaries, the Bridas Corporation.
The Bridas unit has proven reserves of 636 million barrels of oil, and daily production of 92,000 barrels a day. It owns 40 percent of Pan American Energy, the Argentine oil producer, with BP owning the rest.

Sunday, March 14, 2010

China undervaluing its currency at the expense of other countries

Not directly related to energy, but an interesting bit on China's trade policies (and possible explanation for such cheap solar panels!):


Monday, March 8, 2010

Two Years Later, New Rumblings Over Origins of Sichuan Quake

Science 5 March 2010:
Two Years Later, New Rumblings Over Origins of Sichuan Quake

Richard A. Kerr and Richard Stone
BEIJING—When experts suggested that the disastrous 2008 Wenchuan earthquake might have been triggered by the reservoir behind the Zipingpu Dam, establishment scientists in China remained largely silent (Science, 16 January 2009, p. 322). Now they've weighed in, ruling out reservoir triggering. But
many earth scientists don't buy their arguments.

No large quake had ruptured the Beichuan-Yinxiu fault in southwestern China's Sichuan Province in at least a millennium or two. Then engineers built Zipingpu Dam on the Min River just 500 meters from the fault and in late September 2005 began filling it with upward of 900 million tons of water. Two-and-a-half years later, the magnitude-7.9 Wenchuan earthquake got started 5 kilometers from the reservoir.

In the January issue of International Water Power and Dam Construction, three dam engineers at the China Institute of Water Resources and Hydropower Research here argue that the Zipingpu-Wenchuan situation was so unlike that of the four largest known reservoir-triggered earthquakes—all in the magnitude-6 range—that there could not have been a connection between reservoir and quake. The authors, led by structural engineer Chen Houqun, who has co-authored China's design code for building earthquake resistance into dams, contend that the timing was mere coincidence.

Transport Outlook

An article published last year on transportation in China  at Yale's Environment360 site. It's optimistic about the chance for China to take a better, cleaner path.

"Chinese mobility isn’t yet fixated on cars, except maybe in Beijing, where pro-car policies mean that new highways are built as quickly as old ones fill up. An enlightened car policy is key. Stronger metropolitan institutions such as regional planning commissions are needed to protect the environment, manage land development, and provide public transportation. China’s increasingly entrepreneurial culture must be allowed to leapfrog to new technologies that thrive at home and could be exported abroad, such as lightweight, plug-in hybrid vehicles, new electric-car infrastructure advances, and real-time, wireless travel information devices.

Will China actually play a leadership role in transforming vehicles, fuels, mobility, and land use? We think so, for a variety of reasons. For one, some in China are beginning to recognize the Faustian bargain of automotive industry success. They gain jobs, but suffer a raft of environmental, social, and even economic problems. China’s strong national and local governments could pave the way for precedent-setting fiscal and regulatory policies, such as emission-indexed vehicle user fees. The Chinese government is capable of strong and effective intervention, as demonstrated with its one-child policy. Imagine a similar policy applying to car ownership."

Also of note:

China is "well positioned to respond to internal demands and international initiatives. Novel technologies are already sweeping China. Electric two-wheelers are the most successful mass-marketed battery-powered electric vehicles in the world, with sales exceeding 15 million in China in 2007. They have immediate air-quality benefits, set the stage for a shift toward cleaner three- and four-wheel electric vehicles, and accelerate the development of the low-cost battery sector.

University of California, Berkeley
The popularity of electric two-wheelers in China may accelerate the growth of the electric-vehicle industry.

Sunday, March 7, 2010

Chinese solar firm one of many taking US market

Chinese solar firm SunDurance Energy is capturing an increasing amount of US market share as it plans to move beyond California into New Jersey. Meanwhile market share of states, such as California, by Chinese firms, SunDurance included, is increasing as European subsidies for raw materials decline and as Chinese firms continue to control costs so tightly.

Read the NYTimes blog post here.

Thursday, March 4, 2010

China editorials call for end to residency permit rules (Hukou System)

A BBC.co.uk piece of news on a call to end the Hukou system in China (we discussed this during the urbanization presentation). Call comes on the eve of annual meeting of Chinese legislators ...


By Shirong Chen

BBC China editor

One of the toilet-dwellers ( image courtesy Hu Yuanyong/Zhejiang Morning Express)

Living conditions are hard for migrants, this woman lives in a toilet

More than a dozen Chinese newspapers have published a joint editorial calling for the abolition of the household registration or "hukou".

This system limits rural migrants' access to services in China's more prosperous cities.

The appeal, which has attracted widespread support from internet-users, comes on the eve of the annual meeting of Chinese legislators later this week.

The hukou was introduced in the 1950s as a tool of central economic planning.


The editorial uses strong language, beginning by saying "long has China suffered from the ills of the hukou system!" and "all men were created free to move".

The hukou system registers every Chinese citizen according to their household origins as either town dwellers or country peasants.

Nowadays it is widely seen as a source of discrimination in terms of access to services like healthcare and education.

Since economic reforms began 30 years ago, many Chinese migrant workers have left the land to contribute to the country's rapid growth and industrialisation.

But they remain registered as rural dwellers and are not entitled to the same welfare as their city counterparts.

This has created social inequality.

The editorial says the system is unconstitutional and urges the people's deputies gathering in Beijing to overhaul it completely.

As well as being fairer, it says this would benefit China's economy as it would free up more labour and create more domestic demand.

The Chinese Prime Minister, Wen Jiabao, admitted on Saturday that the bulk of the country's industrial workforce was now made up of migrant workers from the countryside.

However, it could take years to completely separate the hukou system from welfare provision, and eventually abolish it in the world's most populous country.

Awesome-tastic Video to Learn Pinyin

This video is a great video to learn how to pronounce Chinese words. A crucial thing to know when using your Chinese vocabulary sheet.


Greentech Media on BYD

Look Out, Greentech World: China’s BYD is Coming

And it’s building cars, EVs, batteries, solar panels and more.

When Micheal Austin worked at Motorola, he was responsible for buying lithium-ion batteries for Motorola's mobile phones. His suppliers were the usual Japanese suspects and they were being, let's say, less than fair on price. That is, until China's BYD emerged as a supplier and shattered the Japanese battery cartel. BYD went on to become Motorola's primary battery supplier and eventually became the private-label supplier of many of Motorola's entire phones, not just the battery. Today, Austin is the VP of BYD America.

So who is BYD?

They might be the quietest 160,000-employee electronics contract manufacturing, OEM, and private labeling powerhouse you've never heard of. And they're coming to an automobile dealership, solar roof, and utility-scale battery application near you. Soon.

And if you're an auto maker, or an EV builder or a solar panel manufacturer -- it might be time to be a little scared.

BYD was founded in 1995, went public in 2002, started building cars in 2003 via an acquisition, and started building solar panels in 2008.

BYD is now one of the largest car makers in the world -- having shipped 450,000 cars last year and 60,000 cars last month (!). Their e6 electric vehicle is coming to the U.S. late this year and boasts a 205-mile range and a top speed of 87 mph. It does zero to 60 mph in 14 slow seconds and boasts a recyclable and relatively safe LiFe battery. And it looks pretty good.

The internal combustion sedans and HEVs in BYD's line-up also look impressive, with impressive performance specs and features.

The firm is holding a press conference this morning at the Geneva Auto Show, which starts later this week, and is expected to announce the arrival of the e6 EV on European and American shores starting in Southern California in late 2010.

Notable about BYD is their commitment to vertical integration. Austin said that he toured the mile-long auto production facility in Shenzen, China and that BYD is manufacturing everything in the car except for the tires and windshield glass. That means BYD airbags, BYD seatbelts, BYD batteries, BYD transmissions, etc.

This same vertical integration is seen in BYD's solar panel manufacturing process -- BYD owns the mines for the feedstock, and builds everything from feedstock through ingot to cells to panels. This also applies to their battery build, as well.

And if that wasn't enough of a commitment to going big in greentech, BYD is also building utility-scale battery based grid storage from their LiFe batteries. They are deploying 4-megawatt energy storage batteries for ancillary services and energy arbitrage. Austin said the battery cost was in the $500-per-kilowatt range, which is within striking distance of many expert's competitive target of $250-per-kilowatt.

Warren Buffett's Berkshire Hathaway, through its MidAmerican Energy unit, bought a ten-percent stake in BYD for $230 million in 2008. In a recent investor letter, Buffett valued his $230 million in 2008 now at $1.99 billion.

The firm is investing billions into the solar panel factory, which is said to have up to 500 megawatts of capacity.

It looks like Chinese businesses are taking greentech world leadership very seriously.

A slide from a recent BYD presentation follows that illustrates the vertical integration this company brings to bear.

Wednesday, March 3, 2010

Oh Three Gorges.

Can't really post this with a straight face. Ah well, we'll hear more things like this when we actually visit the dam.

Also, if you click through to the link, you can hear a robo-voice read the article aloud in English.


Three Gorges Dam champions clean energy program
09:02, February 23, 2010

Long before climate change became a global issue, inspiring reams of editorial coverage and the Copenhagen Summit, the Three Gorges Dam, the largest construction project in China since the building of the Great Wall, was attracting environmental ire around the world.

Now the mammoth decade-old project, the world's largest hydropower plant, contains a vast 175 m deep reservoir and stretches 660 km along the Yangtze River in central China. To date, it has generated 364.6 billion kW of electricity.

The China Three Gorges Corporation, the dam's operator, believes that the project's success has confounded the criticism of overseas commentators who sought to highlight its potentially negative impact on the environment. In fact, says the company, the dam is now playing a crucial role in reducing China's overall level of greenhouse gas emissions.

Li Yong'an, president of the China Three Gorges Corporation, recently received an award for his company's contribution to the development of China's clean energy program.

Are America’s Fears of a Greentech Race with China Unfounded?

I'm a member of the Green Jobs group in LinkedIn, and the following article is a discussion topic for the group. (And almost as interesting as the article are some of the comments. I posted one below.)

The article can be found here:

The article begins: "There has been growing talk about a clean-tech race between China and the U.S., often cast in ominous tones. But the quest to develop and implement renewable energy can be one where both nations win."

You can also vote at the bottom on the following question:

Should The United States Fear a Greening China?

  • No, China has not been able to duplicate innovation in technology and there is no way to export installation and sales jobs.
  • Yes, Instead of the US depending on the Middle East for energy, we will be relying on China for alternative energy and contine to lose jobs to them.

And the comment:

America should not "fear" a Greentech Race with China.
Read THOMAS L. FRIEDMAN's "Earth Race" strategy, modeled on the Space Race as an international competition in the renewable energy & cleantech space:
...the goal of Earth Racers is to focus on getting the U.S. Senate to pass an energy bill, with a long-term price on carbon that will really stimulate America to become the world leader in clean-tech.
If we lead by example, more people will follow us by emulation than by compulsion of some U.N. treaty.
"I believe that averting catastrophic climate change is a huge scale issue. The only engine big enough to impact Mother Nature is Father Greed: the Market.
Today, we need the Earth Race: who can be the first to invent the most clean technologies so men and women can live safely here on Earth.
Maybe the best thing President Obama could have done in Copenhagen was to make clear that America intends to win that race. All he needed to do in his speech was to look China’s prime minister in the eye and say: “I am going to get our Senate to pass an energy bill with a price on carbon so we can clean your clock in clean-tech. This is my moon shot. Game on!”
Because once we get America racing China, China racing Europe, Europe racing Japan, Japan racing Brazil, we can quickly move down the innovation-manufacturing curve and shrink the cost of electric cars, batteries, solar and wind so these are no longer luxury products for the wealthy nations but commodity items the third world can use and even produce.
start the conversation with giving birth to a “whole new industry” — one that will make us more energy independent, prosperous, secure, innovative, respected and able to out-green China in the next great global industry.
An Earth Race led by America — built on markets, economic competition, national self-interest and strategic advantage — is a much more self-sustaining way to reduce carbon emissions than a festival of voluntary, nonbinding commitments at a U.N. conference. Let the Earth Race begin."

(Posted by: Lloyd Helferty Advisory Committee Member at International Biochar Initiative)

China to focus on energy restructure in 2010

From China Daily - has links to other relevant articles as well.

China to focus on energy restructure in 2010

China would put more emphasis on adjusting its energy structure this year with focus on renewable energy and nuclear power, director of China's National Energy Administration (NEA) said in Beijing Tuesday.

Zhang Guobao, also vice-minister of the National Development and Reform Commission and member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), made the remarks in an exclusive interview with Xinhua before he attends CPPCC's annual session.

"I'm proud to say that China is at the world's advanced level in new energy development, but there is still much room for improvement," he said.

Zhang took wind power as an example. "Compared with wind power reserves of 2.6 billion kilowatts (kW), China's installed wind power capacity stood at only 22 million kW."

Zhang also highlighted China's determination in developing nuclear power projects, 21 of which are under construction in the country. Currently China has 11 nuclear power projects in operation.

The Chinese government has voluntarily announced ahead of the Copenhagen climate summit that it would cut carbon dioxide emissions per unit of the GDP by 40 percent to 45 percent by 2020 from the 2005 level, which represents reduction of roughly 1.5 billion tons of emissions.

Rare Earth Metals - China's Search in Africa

You may recall that I presented on China's 'uranium gap' and their increasing foreign relations with Africa to secure strategic resources. Same thing applies with rare earth metals on the African continent.


August 2009

The race for strategic minerals

Africa's mineral reserves are drawing interest from Asian and Western states determined to secure supplies and counter wild price fluctuations

Strategic minerals are back in fashion and - along with oil and gas - at the centre of geopolitical rivalries between industrial economies in Asia and the West. New technologies have failed to free modern economies from their dependence on base metals and rare minerals: for example, fibre-optics are replacing copper cables, but demand for the associated cobalt for superalloys used in jet engines and gas turbines is growing fast. Competition is increasing over price and secure supplies between Asia's super economies - China, India and Japan - and with Western economies.

Demand for these minerals is rising again after a sharp fall at the start of the global slowdown, and Africa offers some of the richest pickings for the commercial rivals. Asian economies - which are securing uranium for nuclear reactors and investing in copper, iron and manganese mines for traditional industries - are the biggest spenders and Africa's best chance for a turn-around.

Meanwhile, with inventories full and falling demand for finished products, the Africa-Asia minerals trade slumped badly this year. Beijing's Commerce Ministry reports that China-Africa trade has already dropped more than 30% in the first half of 2009.

'Since most imports from Africa consist of natural resources such as metals and oil', the lower prices for those commodities lowers the value of trade. Chinese officials said that China-Africa trade fell to US$37.1 billion for the first half of 2009 compared to $48 bn. for the same period last year. Although trade shrunk, China's investment in Africa increased by 81% to $552 mn. for the first half of the year, compared with 2008.

Demand for metals is slowly recovering after last year's collapse, driven partly by the prospect of buying supplies at historic lows: as the construction business picks up, copper prices are back near 2008 prices. By mid-August, copper prices in London hit an eleven-month high at $6,425 a metric tonne following a doubling of Chinese imports in early 2009.

By June, zinc prices had risen enough to tempt some Chinese companies to re-export their recently acquired stocks. In July, China's imports of oil and iron ore hit record levels. While short-term prospects may still be shaded by gloom, Germany's Deutsche Bank forecasts that China's demand for iron, copper and manganese will grow 10% a year for the next decade, while demand for oil and coal demand will rise by 20% a year. Adding more heat to global resource competition is talk of 'peak' oil and 'peak' minerals production. Supporters of those controversial arguments suggest that production may already be in terminal decline, with supplies of certain minerals set to dry up within decades.

Mind the mergers

Industry analysts predict that Chinese-financed mergers and acquisitions this year will double their level of $52.1 bn. in 2008. China is also targeting oil and mining companies: its state-owned companies completed the purchase of Switzerland's Addax Petroleum this month and are bidding for Britain's Emerald Energy and Argentina's Respol YPF.

Aluminium company Chinalco's failed bid to increase its stake in Rio Tinto, which holds a substantial portfolio in Africa, is unlikely to deter other Chinese companies from buying into existing entities, but they are looking more seriously at smaller companies in Africa to buy up unexploited iron-ore deposits in order to avoid dependence on supplies from the biggest iron producers: Rio Tinto, BHP Billiton and Brazil's Vale.

Several companies sitting on substantial mineral resources are talking to Asian financiers: for example, Australia's Sundance Resources is seeking investors from South Korea and India to help finance the massive mine development costs of its multi-billion dollar Mbalam iron ore project in Cameroon.

At the top end of the market, Chinalco is among those - such as Vale and Swiss-based Xstrata - manoeuvering to take over South African conglomerate Anglo American, which controls one of the most diversified range of mineral assets.

Asia's search for strategic minerals is more than a shopping spree: for India, securing uranium for power and armaments has become a priority. In July, France's Areva offered the state-owned Nuclear Power Corporation of India a stake in several uranium mines in Niger, Namibia and Central African Republic. Discussions continue but Delhi is likely to agree; acquiring uranium has been more difficult since its refusal to sign the Nuclear Non-proliferation Treaty.

China's demand for Africa's minerals outstrips that of India and Japan (see Map) and it has the foreign reserves to finance its ambitions. Following the consolidation of the state-owned mining sector, Chinese companies are better equipped to bid for international assets (AAC Vol 2 No 8). Giving new impetus, in August, China's Land and Resources Ministry confirmed plans for a strategic mineral stockpile to guard against swings in commodity demand and pricing. Beijing is to launch a 'reserve and protection system' for coal, copper, oil, tin and tungsten, and to build a huge underground oil reservoir.

In June, the China Development Bank-backed China-Africa Development Fund announced a new mineral-focused investment project with the defence industries-focused China Poly Group. The new China-Africa Investment Development Co., which is 55% controlled by CDB and 45% by Poly Group, is targeting iron, gold and oil exploration for its initial investments.

Asia-Africa trade shows a strong dependence on the trade in resources other than hydrocarbons. In 2008, about $2 bn. of India-South Africa trade was in gold. China (the biggest consumer of copper and cobalt) buys 75-90% of its cobalt from Congo-Kinshasa; Gabon, South Africa and Ghana are among China's top five manganese suppliers.

With China-Africa trade relations, resource dependency leads to strong political ties. How much leverage does this give Asia's biggest customer? South Africa exports 40% of its iron ore, 72% of its cobalt and 20% of its manganese to China, and its government infuriated human rights advocates when it refused a visa to the Dalai Lama (AAC Vol 2 No 6).

Countries housing China's multi-billion dollar mining deals, like Congo-Kinshasa, have gone to battle with the World Bank and International Monetary Fund to defend the deals in the face of threats to future debt relief (see Congo-K Briefing). China's promise of billions of investment dollars has helped the government toughen its stance against the Bank and the IMF. The $5 bn. China-Zimbabwe platinum deal (AAC Vol 2 No 9) could have a similar effect or pre-empt negotiations with the IMF.

Asian buyers have been waiting for the bottom of the market to get the best deals. When Kimberley Consolidated Mining had cash flow problems in May, China National Geological and Mining Corporation offered finance in a deal to be finalised soon. Also in South Africa, the China-Africa Development Fund offered to support the ailing Pamodzi Gold with 626 mn. rand ($80 mn.) financing in exchange for an equity stake.

Most Asian companies prefer, like their Western counterparts, to buy minerals in Africa and process them elsewhere, but they all face growing African pressure to invest in beneficiation and transfer skills and technology. Those small-scale Chinese smelters in eastern Congo-Kinshasa were among the first to close when the recession began to bite but larger Asian outfits know that they will have to invest in processing operations in Africa as part of the necessary cost of their search for strategic minerals.