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Contributions from
the Column
InWEnt Forum
Renewables in China
Work needed
05/2006 |
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[ Electric power ]
Renewables in China
Undersupply of energy is holding back China’s economic development. Power failures are a daily occurrence. The National People’s Congress recently voted to make renewable sources a major element of the country’s long-term energy mix. By 2020, they are to meet 12 % of China’s energy needs.
[ Interview with Klaus Knecht ]
China is booming. Its economy is growing to fast for the comfort of many in the West. Chinese demand for oil, for example, has a massive impact on the world market. What is view on energy in the People’s Republic?
China consumed 59.7 exajoule of primary energy in 2003, making it the second largest consumer in the world. And with electricity output running at 319 gigawatts – 10 % of global production – it is also the world’s third-largest power producer. 81 % of Chinese electricity is generated in conventional, mainly coal-fired power stations. Hydroelectric power contributes another 18 % and nuclear power one percent. Solar, wind, biomass and geothermal energy together make up less than one percent of total supply. China has large reserves of coal, an estimated 120 billion tons, but not much gas or oil. The country is securing access to gas, oil and uranium by acquiring stakes in companies abroad – with 40 investments in Brazil alone, as well as holdings in Libya, Sudan, Congo and Iran. Generating electricity from coal causes environmental problems. Yet even though China exploits its stocks with no apparent concern for such issues, it still cannot generate as much power as it consumes. That is partly due to the low efficiency of Chinese coal-fired power stations with only 23 to 28 % efficiency, compared to 38 to 45 % in Germany. The result is chronic undersupply.
What are the major energy challenges for China in the
years ahead?
As the economy grows, China’s energy requirements will continue to rise. The International Energy Agency (IEA) reckons the country will account for a fifth of the world’s energy consumption in 2030. Chinese experts believe primary energy supply will need to treble by 2020 to meet the energy demand of China’s 1.3 billion population. The country’s leadership cannot quench that thirst for energy fast enough. So even with new power stations, shortages are likely to stay a problem for another three to four years. Of China’s 31 provinces, regions and autonomous cities, only five got through the first quarter of 2005 without brownouts. To keep pace with economic development, an additional 30 gigawatts per year is required. That is about a quarter of Germany’s total electricity output. China is thus becoming the world’s biggest energy market. No other country needs to invest as heavily in developing its energy sector. According to IEA calculations, the bill will run to $ 70 billion a year. However, cooling water, which is needed for thermal power stations, will become increasingly scarce.
What is the Chinese leadership doing to tackle
these challenges?
From 2000 to 2007, 343 new coal-fired power stations are to be built. And 18 more nuclear power plants and 20 gas-fired power stations will be completed by 2020. Coal’s role in the Chinese energy market will diminish. But if the National Development and Reform Commission (NDRC) has its way, coal will remain the most important element of the country’s long-term energy mix, accounting for 55 % of energy production. “Clean coal technology” will keep environmental impacts within limits. The contribution made by so-called “clean” energy sources – which the Chinese take to include natural gas and nuclear energy as well as hydroelectric power – will rise to 20 %. But it won’t do to simply broaden the base. Energy needs to be delivered more efficiently; and it needs to be used more efficiently. Prices must not promote profligacy. The latest Party conference voted for a change of course in this respect, and even the Chinese elite are calling for more efficient energy management. Striking a self-critical note at the 10th National People’s Congress, Prime Minister Wen Jiabao complained that China consumed four times more energy than the United States in relation to GDP.
What about renewable sources?
As far as wind power is concerned, China installed another 496 megawatts in 2005 – an increase of 64.9 %. That brought total capacity to 1,260 megawatts at the end of 2005. The comparative figure in Germany was 18,427 megawatts. China now ranks 8th in the global windpower capacity table. China is also a manufacturer of wind power facilities – a sector which could soon be as successful as the solar devices industry. The aggregate area of solar installations in 2004 was 64.3 million square metres. That corresponds to an output of 45 GWth (gigawatt thermal). In Europe, the area under collector panels was 14 million square metres, making for an output of 9.8 GWth. Sales of solar heating collectors are growing at rates of up to 30 % in China. The country meets 75 % of global demand. So it will probably keep the promises it made at “renewables 2004” conference in Bonn to increase the role of renewable sources to 15 % by 2020. 30 gigawatts more windpower capacity is pledged, along with 20 gigawatts of bioenergy and four gigawatts of solar power. Together with a further increase in hydroelectric power, this could mean more than 30 % of Chinese electricity will stem from renewable sources by 2020.
What role does biomass play?
The potential for biogas production is put at 145 billion cubic metres a year – enough to meet the entire rural population’s energy needs for cooking and lighting. Harnessing that potential would require 200 million biogas facilities. With five million such facilities already in place, China is the world leader in this field at present, ahead of India, Egypt and Peru. If it could treat only half of its industrial effluent, the biogas recovered would match the volume of the country’s entire natural gas production. The big factories of the sugar industry generate electricity from their waste for local consumption. More than 800 megawatts is generated that way in the sugar-growing provinces of Guangdong and Guangxi alone. At present, though, the expanding sector does not feed its surplus energy into the grid. In rural areas, where 900 million Chinese live, biogas is increasingly popular. By 2010, the agricutlure ministry plans to get the technology to 50 million households. Bonds worth $ 120 million will be issued to finance methane gas facilities in 6,000 villages in 24 provinces. The party newspaper Xinhua has calculated that the use of such facilities in the south-western province of Yunnan saves 2.4 million tons of firewood a year and lowers energy costs by $ 60 per household a year.
Last year, China introduced a law to promote
renewable energies...
In 2005, the National People’s Congress gave its blessing to a renewable energies promotion law. The GTZ, Germany’s technical cooperation agency, advised the politicians drafting the legislation. Experience gained from Germany’s Renewable Energies Act (EEG) thus flowed into the new law. However, it contains no provision for fixed payments for power fed into the national grid of the kind we have in Germany. Energy projects are put out to tender. At the resulting prices, Chinese companies can still compete. Most foreign manufacturers of wind power facilities, however, cannot. The idea is obviously to ensure that Chinese manufacturers win contracts. But the present rules should not obstruct international cooperation in the form of joint ventures or licence agreements. Wind power use must not suffer setbacks because of technical deficiencies. That would discredit what is an environmentally acceptable and climate-friendly technology. To achieve the targets set, China urgently needs qualified personnel for the manufacture and further development of wind power facilities as well as personnel for the development
and operation of wind parks.
And what is InWEnt doing?
Together with the Xian’s Northwestern Polytechnical University (NWPU), German research institutes and German industry, InWEnt provides upgrade training for managerial personnel, wind park planning experts, trainers for advanced training institutes and advisers for political decision-makers and energy companies. Cooperations with German firms are intended to ensure that wind power facilities meet international standards. In future, InWEnt and NWPU will work increasingly together with the Chinese Wind Power Center in Beijing, which was created with GTZ support, and the Asia Wind Energy Training Center, which is supported by the World Wind Energy Association.
With its partners in Brazil and Southern Africa, InWEnt has developed an approach to making productive use
of renewable energies. Does it apply to China yet?
Our aim is to finance the installation costs of renewable energy systems by proceeds from selling marketable goods and services. Simple market and feasibility studies provide potential manufacturers with the parameters they need to decide what they can do. One of the keys to this approach’s success is to check, from the outset, what can be manufactured at market prices in view of actual energy costs. In China, GTZ and InWEnt plan to implement this demand-oriented approach together.
Questions by Norbert Glaser.
Klaus Knecht
is a senior project manager and theme manager for
“Energy and Climate Protection” at InWEnt.
klaus.knecht@inwent.org
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