Tuesday, January 31, 2012

Renewables, Meet Coal!

From Bloomberg Businessweek, an article on development plans for renewable energy:

China unveils 2011-2015 plan for renewable energy sector (http://bit.ly/zgeWXI)
"China is targeting the development of non-fossil energy including wind power, solar power, biomass energy, solar energy, and thermal and nuclear power equivalent to 480 million metric tons of standard coal by the end of 2015, according to the 12th Five-Year Plan (2011-2015) for the renewable energy industry recently released by the National Energy Administration (NEA)."
However, this should be juxtaposed to the larger story of coal, where consumption (and emissions) continue to grow unabated. A recent article in The Guardian lays it out:

China's renewables surge dampened by growth in coal consumption
While the country tripled its solar energy generating capacity in 2011 (now up to 3 GW) and also "notched increases in wind and hydropower" (generating capacity for these is already much larger) government officials are "still struggling to cap the growth in coal burning, which is the biggest source of carbon dioxide emissions in the world." The article includes the stunning statistic that "after burning an extra 95m tonnes [of coal] last year, China will soon account for half the coal burned on the planet."

Some energy planners in the central government have grown concerned, and are entertaining the idea of a future cap on energy use -- but they are meeting resistance from local governments, who don't wish to sacrifice or slow economic growth, a distinct possibility with this policy. In discussions, the potential upper limit on energy use by 2015 could be in the range of 4.1 to 5 billion tons of coal equivalent per year, with local governments favoring the latter.

If this eventual limit is adopted, and the renewable development target of 480 million tons of coal-e is actually met -- by no means a sure thing -- then renewables could account for ~9.6% of energy use. If the lower target is adopted, that could rise to 11.7%. For purposes of comparison, in 2010, the United States' share of renewable energy was slightly more than 8% of all energy consumption and also continues to grow. (EIA)

Sunday, January 29, 2012

China speaks out against the Iranian nuclear program — but business is business

This is an article from last week, but it gives an interesting glimpse of current political developments between China, Saudi Arabia, Iran and the United States:

- Prime minister Wen Jiabao has returned from a Middle East trip with a business deal to build a $10 billion, 400,000-barrel-a-day refinery on Saudi Arabia’s Red Sea coast. Also, the Chinese oil company CCPC will join hands with Qatar Petroleum International and Royal Dutch Shell to build a refinery at Taizhou on China’s Pacific coast.

- While China generally stays mild in its opinions concerning diplomatic issues, Wen strongly disapproves of Iran's nuclear program, saying that China “adamantly opposes Iran developing and possessing nuclear weapons.”

- However, China will keep buying Iranian oil, despite of the Unites States' pressure to phase out Iranian oil imports. Iran is China's third largest supplier of oil.

- China openly disapproves of Iran's threat to shut down its Strait of Hormuz (the Persian Gulf bottleneck through which roughly a fifth of the crude oil traded worldwide passes) should the US-led boycott of Iran's economy sthrengthen, saying that such action would be regarded as aggression against most of the world’s nations.

The article is on http://www.nytimes.com/2012/01/21/world/asia/chinese-leader-wen-criticizes-iran-on-nuclear-program.html

Saturday, January 28, 2012

Solar Panel Boom in China

China’s solar demand is expected to rise dramatically, helping absorb excess global production while boosting the solar industry. CEOs from two major solar panel manufacturers, Suntech and Trina, both predict that China will double its installations of solar panels compared with 2011. Previously, China’s share of world solar installations has remained relatively low despite its high manufacturing capacity. The projections outlined in this article suggests that China is now focused more on developing its domestic solar panel market, as a strategy to meet its renewable energy targets, rather than exporting solar panels. Renewable energy currently accounts for less than 1% of total energy supply, so there is much room for growth. The article cites several reasons for growth of solar demand in China (including government support and subsidies, falling price of solar technology, etc) as well as challenges for the industry.

See full article: Solar CEOs See Boom in China will Ease Glut in 2012: Energy


Hybrid Ferries in Hong Kong

An Australian company called Solar Sailor is designing free standing "sails" (they really look like airplane wings) that can be folded down when not in use. The sails are covered in solar PV so they generate electricity for the hybrid diesel-electric drive as well as providing lift when the wind conditions are right. One of their first vessels is a passenger ferry in Hong Kong.
As a disclaimer: This technology is not very widespread or economically viable (yet).
The company hopes to expand their business in China to bulk carriers transporting iron and other metals, but they have not yet built a prototype at that scale. Their viability may increase soon as shipping companies need to meet new energy efficiency and sulfur dioxide emissions regulations set by the UN International Maritime Organization.
Hopefully this technology will be economically viable soon, but until then, it's pretty darn cool.



Friday, January 27, 2012

Gray skies


This story highlights how growing public criticism of the pollution problems in China, particularly within its larger cities.  I think it illustrates well how rising standards of living, fueled largely by industry and cheap coal-powered electricity, also lead to growing demands for a healthier environment.  For air quality, this will require addressing the emissions of China's notoriously dirty coal plants, industrial emissions, and the exponential growth in car ownership and resulting pollution.


Tuesday, January 24, 2012

ConocoPhillips Reaches Settlement in China Spill

As mentioned in today's class, the June 2011 incidents in the Bohai Bay caused 3,343 barrels of oil spills near platforms operated by Conoco Phillips and owned 51% by CNOOC. This environmental disaster provoked a storm of media protests in China. Since early September, the Chinese government has ordered a complete shutdown of the field. Today, the two companies reached a settlement with China's Ministry of Agriculture, agreeing to pay 1 billion Chinese yuan (roughly $159 million) to settle compensation claims resulting from the spills. Conoco also agreed to set up an additional fund for helping promote environmental sustainability in the area, about $16 million of which will be used to improve fishery resources.

Link to full article here: http://online.wsj.com/article/SB10001424052970203718504577181743807960180.html

Sandy Yao

China's 2011 Oil Imports

As we just talked about oil and natural gas today, I want to share this WSJ article that provides a few current statistics on China’s crude imports in 2011. Notably, the amount imported from Iran went up by 30% while the total increased by 6.1% last year. Such a fact on its own provides questions for debate in terms of international relations and security issues given the complicated overall global politics. On the other hand, from the demand perspective, it is also worth questioning what might happen with China’s energy imports when a “soft landing” of the economy is of concern.

China’s Goldwind Expanding in U.S. as Rivals Cut Back

The second largest wind turbine manufacturer in China is picking up market share in the US. The article attributes this gain to a failure of the US government to extend an otherwise soon-to-expire production tax credit on wind energy. Indirectly, the article also suggests that Goldwind's turbines may be increasingly competitive with established turbine makers like Vestas and GE.

What I found interesting was the apparent multinationality of the company's operations and manufacturing. The towers and a majority of the blades come from US companies, and the company hosts a research and development team in Germany.


Tuesday, January 17, 2012

China Lets Natural Gas Price Rise

I thought this was interesting particularly after what we learned in class today about how Natural Gas is the slowest growing energy resource in China. One of the barriers to growth is that the artificially low Natural Gas prices deter domestic exploration and production. This article from the Wall Street Journal briefly discusses some of most recent the Natural Gas price reform.

-Daniela Hamann-Nazaroff

China's growing pace slows down

Although China's economic growth rate slightly dropped, it is an early concern of the new year for the countries leader. China's successful boom has been mainly due to investments and foreign exports that are now dwindling because of inflation and debt. Experts say that China need to implement more sustainable means of growth even if it is at slower rates. As the story develops it would be interesting to see the effects of the economy on the energy sector as investments and exports give way to more domestic markets growth.

< http://www.bbc.co.uk/news/business-16588410 >

Monday, January 16, 2012

Trade-offs of Entering China Wind Turbine Market

This article is an oldie but a goodie. It describes some of the difficulties that companies outside China face when entering Chinese markets, in this instance the wind turbine market. Gamesa, the new entrant, took a big dive into the Chinese market in the early days of China's wind boom. Then in 2005 Chinese officials imposed very stringent domestic production requirements for turbines (an "open secret" violation of W.T.O. rules). Gamesa opted to invest significant resources in training and supporting wind turbine component suppliers in China, who were then able to sell to domestic manufacturers as well. In very short order, Gamesa was undercut by domestic turbine makers on price, due in part to the manufacturing capacity that they had helped create. Ultimately, though, Gamesa was still able to keep a small piece of such a huge "market pie," that it made financial sense.

Friday, January 13, 2012

"China Increases Target for Wind Power Capacity to 1,000 GW by 2050"

China has increased its target for installed wind power capacity to 1,000 GW by 2050 (from ~40 GW today).  This is an astounding number and speaks both to their initiative and the competitiveness of wind power as an energy resource.  This will require an RMB 12 trillion (~$1.9 trillion USD) investment and is expected to provide around 17% of China's energy needs from wind power in 2050 according to the Center for Renewable Energy Development of the Energy Research Institute (part of the NDRC).

Here is the link to the full article:




Tuesday, January 10, 2012

Steel Bars and the Prisoner's Dilemma

The Financial Times recently ran an interesting article on the non-participation of Chinese steel manufacturers in an international voluntary emissions reporting scheme sponsored by the World Steel Association (WSA).  The collaboration is aimed at improving energy efficiency across the industry (and as the hope went, thereby helping to ward off costly regulation). However, several Chinese producers were concerned that release of their company data would reveal trade secrets and potentially harm their competitiveness; consequently, both they and all of their compatriot competitors are declining to participate in the scheme.  Since China produces nearly half of the world's steel, the data omission severely undermines the project's usefulness. As an added twist, the current head of the WSA is also the president of one of those Chinese producers that is now deciding not to cooperate, despite previous expressions of support.


While interesting by itself, I think the case also illustrates some of the challenges posed by economic and geopolitical factors, which act as barriers to international agreement and collective action on energy problems which necessarily span borders.  The degree to which energy use is intertwined with both a) international markets and global externalities in the aggregate, and b) relative national economic growth, development, and security objectives means that there will always be a constant tension between competition and cooperation in the energy space.