US carbon technology firms flock to China for coal projects….


en:Primorye Power Plant in Luchegorsk, Primors...
en:Primorye Power Plant in Luchegorsk, Primorsky Krai ru:Приморская ГРЭС, пгт Лучегорск, Приморский край (Photo credit: Wikipedia)

China is the coal capital of the world. The rest of the world is very aware of this, reports Shanghai Daily. | Follow discussions at Learn From Nature 

With few of its own oil and gas resources, the nation depends on its vast coal reserves to literally fuel growth. Expanding in recent years at a rate of one new coal-fired power plant a week on average, the country’s coal capacity is expected to triple that of the United States by 2015.

China’s dependence on the dirty, sooty mineral, in turn, is a shot in the arm for cleaner, low-carbon coal technologies. As the world’s leading carbon emitter, China has targeted energy and environmental conservation as one of its key growth industries in the 12th Five-year Plan.

Such technologies include carbon capture and storage, so that carbon emissions from coal-fired power plants are separated out and buried deep underground.

Good news

All this is good news for American companies involved in these technologies.

“US companies whose technology has been languishing here (in the US) for decades are commercializing for the first time because of the speed and lower cost of doing business in China,” says John Thompson, director of the Coal Transition Project at the Clean Air Task Force, a Boston-based non-profit that brokers partnerships between US and Chinese clean technology companies.

Since the US and China generate half of the world’s coal-fired power emissions, the two can make a big impact on the reduction of global greenhouse gas by working together. “Cooperation based on trust between US and Chinese businesses on the ground is the only pathway to a grand deal on climate change,” says S. Julio Friedmann, carbon management program leader at the US Department of Energy’s Lawrence Livermore National Laboratory in California.

They couldn’t be better suited for such cooperation given their complementary capabilities: While China focuses on technology to separate carbon emissions from coal exhaust, the US is an expert in technology to store that carbon underground.

Terry Cooke, a senior fellow at Penn’s T.C. Chan Center for Building Simulation and Energy Studies, calls it “a win-win opportunity to create a 21st-century globalized, accelerated technology development loop where the US supplies what it does best, which is innovation, and the Chinese bring advantages of speed and scale of deployment.”

Speed to market is the biggest attraction for Western companies flocking to China. “China can deploy technology roughly twice as fast” as the US, says Frank Alix, CEO of PowerSpan, a New Hampshire-based company working with state-owned China Huaneng Group on a new coal gasification solution.

“The US may have innovation and new ideas, but it takes five to 10 years to get to full commercialization with lots of cost in between. China can do it in a much shorter time and much cheaper,” adds Ming Sung, chief representative of the Asia-Pacific region at the Clean Air Task Force in Shanghai.

Part of the speed comes from having access to state-backed capital in China. The cost of capital in the US – at roughly three to five times that in China- factors in longer lead times right from the start.

To justify a hefty US$1 billion investment in a new US coal plant, for example, preliminary engineering studies are lengthier and therefore more costly than those in China, comments Robert Rigdon, CEO of Texas-based Synthesis Energy Systems (SES). “In China, almost every project you enter gets built,” he says. “In the US, it’s almost the opposite.”

Whether foreign or Chinese, one invaluable benefit gained from the on-the-ground experience in China is that companies are getting a better grip on management, forecasting and efficiency both in their plants and up and down supply chains.

“There are a massive number of players in the industry in China experimenting and improving themselves on a daily basis to create a level of know-how to accurately project cost and to let them figure how much steel and concrete to use,” says Jason Crew, general manager of General Electric Gasification in Shanghai.

Better Together

For all these reasons, Rigdon found China a hospitable market for technology developed in the 1970s by the Gas Technology Institute in Illinois. SES is the exclusive licensor of that coal gasification technology called U-GAS and saw big opportunities in China because of the country’s “large amounts of coal converted to energy and chemicals,” says Rigdon.

In 2007, SES launched a joint venture in Zaozhuang in Shandong Province with Shandong Hai Hua Coal & Chemical Co to convert low-quality coal into clean synthetic gas before it is deployed for industrial uses. The US firm is now engaged in a US$4 billion project in Henan Province, which will be completed this summer.

In a partnership with Yima Coal Industry Group, the project aims to convert low-quality coal into clean synthetic gas for conversion to methanol or glycol for industrial uses. Longer term, U-GAS can be used to extract CO2 from coal-generated power plants, which can be stored underground.

PowerSpan is also getting a lift from China. The small clean energy company developed an advanced solvent to remove CO2 from the exhaust of coal-fired power plants. The solvent binds with the CO2, which is then separated for capture and storage. With the help of China Huaneng Group, PowerSpan won a contract last year with Norway’s Technology Qualification Program to build out a post-combustion capture system. Now, the two firms are exploring other projects together in China.

Meanwhile, US-educated Chinese scientists, who started low-carbon coal and related research projects in the US, are taking these ventures to China. Jane Chuan – a China-born scientist with a PhD in bioenergetics from State University of New York at Buffalo – and her husband– a China-born scientist PhD in chemistry from Cal Tech – helped launch a Silicon Valley firm in 1996, applying a method developed for the biopharmaceuticals market to energy efficiency solutions. When the company’s board grew too concerned about intellectual property (IP) theft to begin their operations into China, Chuan and Wang set up Accelergy, a company focused on accelerated energy technology, in Palo Alto in 2003. They subsequently moved to Shanghai, renaming their venture Yashen Technologies.

Closer to the market

In China, “energy and environmental protection will become huge issues,” says Chuan. “We could have chosen to go to Russia, India, Cambodia or some other place where labor costs are even lower, like Vietnam, but here, we are closer to the market.”

A top-quality labor pool in Shanghai helps Yashen build and operate high throughput systems. “To develop a new application or technology may take about 15 to 20 years in the US. With the high throughput platforms we build, we spend about five years.”

Penn’s Cooke notes that a key to making these US-China partnerships work is that “US companies have to be sure of their intellectual property protection and commercialization benefits.” Yet as opposed to other clean tech industries in China, such as wind energy, low-carbon coal technology companies seem relatively relaxed about IP theft by Chinese customers and competitors. Some experts say one reason is that upholding the standard 20-year US patents is less of a concern in large-scale energy technologies, such as carbon capture, because plants operate on multi-decade timetables.

Unlike in, say, software, music or fashion, “there’s less copying in this industry, because the projects are large,” says Albert Lin, CEO of Calgary, Canada-based EmberClear Corp, which is the exclusive licensor of Huaneng’s technology in North America and other regions.” People are more worried whether you have the R&D efforts to sustain and improve plants that will run for 40 years,” he says.

What’s more, large Chinese companies are gaining ground by exporting some of their technologies to other emerging countries. Huaneng, for instance, is starting to sell a technology, known as circulating fluidized bed (CFB), to convert coal to cleaner energy. “Many Chinese plants built in the last five years have used proven CFB technology,” says Lin. “Now, there is a lot of interest from developing countries where cost is important.”

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Japan’s nuclear crisis blows open debate on future energy

In the aftermath of the Japanese earthquake and resulting tsunami, amid fears of a radiological disaster, commentators worldwide are postulating one question: is this the end of nuclear power? Alisa Murphy, CEO of B9 Coal, argues here that they ought to be discussing the wider energy mix.

“The scale of the human tragedy and economic cost of the explosions at the Fukushima Daiichi nuclear power plant are undoubtedly tremendous. As analysts attempt to assess the long-term fallout, one resounding fact is clear: it is time to take new safe, clean, sustainable energy solutions seriously. With non-polluting options (i.e. nuclear) called into question, we cannot afford to be complacent about energy issues any longer.

Global governments’ response to Japan’s crisis have been markedly tempered. Concerned by global energy shortages and climate change they are acting cautiously; too readily accepting that nuclear is necessarily part of a credible energy mix.

With an existing £40 billion invested in eight sites in England and Wales, British Energy Secretary Chris Huhne was careful to note that ‘It’s far too early to tell at this stage whether there will be any impact on the investment climate’.

Keen to appease both left and right, US President Barack Obama quickly defended the technology. And German Chancellor Angela Merkel’s ostensibly hard-line response may have been more of a political strategy in the wake of upcoming state elections. But China’s u-turn decision to freeze approvals for new nuclear reactors will demand an adequate response from the West.

The Financial Times notes that the cost of gas and coal – the two main alternative commodities for power generation – has risen sharply since Friday, as has the price for trading carbon emissions. It is pertinent that Japan’s crisis does not become an excuse to return to the dirty technologies of yesterday.

With renewables currently too unreliable to support a sustained energy solution, and oil prices rising as supplies diminish, it would be all too easy to rely on today’s fickle media to sweep Fukushima under the table rather than opening up the wider energy debate.

Until renewable technologies reach the required stage of development to meet growing demand reliably and affordably, a transitional solution that efficiently and cleanly uses the world’s remaining fuel resources is essential.

Well-meaning talk from politicians is not enough: we need serious investment in a low-carbon future and real commitment to transitional technologies. B9 Coal, a pioneering British company based in London, is doing just that.

Earlier this week, at the Advanced Power Generation Technology Forum (APGTF) in DECC’s offices, it was widely recognised that carbon capture and storage (CCS) needs to be accelerated and extended in light of events in Japan.

There is growing agreement that long-term CCS could be a logical beneficiary of fuel switching from nuclear to fossil fuels. B9 Coal’s fuel cell power stations offer the most commercially attractive CCS model proposed to date.

B9 Coal has created a world first template for commercially attractive, flexible, clean energy projects with the ambition of revolutionising the way we produce electricity. By combining revolutionary alkaline fuel cells with fossil fuels in a carbon capture–ready model, B9 Coal provides an essential step in the move to a low carbon future.

These power stations offer the benefits of highly efficient power generation and the ability to load-follow to meet peak demand. The company is stimulating a reassessment in attitudes towards fossil fuel power generation and the possibility of decoupling coal use and the adverse environmental impacts traditionally associated with it.

The alkaline fuel cells developed by AFC Energy are the most efficient method of converting hydrogen to electricity. AFC Energy’s system is low-cost, low-pressure and developed for large scale deployment.

The company has been making significant developments across a range of industries including chlorine production and electricity from waste. Integrated with the B9 Coal model, the fuel cells offer a pull through solution for CCS and will provide a fundamental building block in the development of a hydrogen economy.

Investing in this British technology would not only combat reliance on foreign reserves, but position the UK as a global leader on CCS and low-carbon energy solutions.

Despite Mr Huhne’s concerns over existing investments, CCS actually has considerable technical, economic and safety advantages over new-build nuclear.

In particular, pre-combustion technologies with fuel cells have a highly flexible output, and can back-up a greater capacity of intermittent renewable technologies like offshore wind. In contrast, nuclear stations are far less flexible in output and therefore less able to support the development of the UK’s marine renewable resources.

Under current nuclear roll-out plans, it would take billions of pounds of investment to produce a relatively small percentage of the UK’s electricity needs each year. Re-directing this enormous cost towards CCS has potentially huge advantages for national energy security.

The UK Government has formalised its commitment to investing in CCS demonstration projects, but development is hugely stalled; something which is not only frustrating for the energy industry but also detrimental to our emissions targets.

Coal and gas will inevitably be a substantial part of the future energy mix, therefore the only viable answer is to reassess the ways in which we use them developing efficient and responsible solutions. This is all the more clear in the wake of the horrific tragedy unfolding in Japan. The decision whether new nuclear should be included in the UK energy mix can wait until 2020, acting to preserve our current energy reserves by investing in CCS cannot.”