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.
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.
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.”
Source : http://www.china.org.cn/opinion/2012-03/26/content_24985243.htm