More Coal-Fired Power Stations in Asia

A lovely feature of the GWPF site is its extracts of articles related to all aspects of climate and related energy policies. Yesterday the GWPF extracted from an opinion piece in the Hong Kong-based South China Morning Post A new coal war frontier emerges as China and Japan compete for energy projects in Southeast Asia.
The GWPF’s summary:-

Southeast Asia’s appetite for coal has spurred a new geopolitical rivalry between China and Japan as the two countries race to provide high-efficiency, low-emission technology. More than 1,600 coal plants are scheduled to be built by Chinese corporations in over 62 countries. It will make China the world’s primary provider of high-efficiency, low-emission technology.

A summary point in the article is not entirely accurate. (Italics mine)

Because policymakers still regard coal as more affordable than renewables, Southeast Asia’s industrialisation continues to consume large amounts of it. To lift 630 million people out of poverty, advanced coal technologies are considered vital for the region’s continued development while allowing for a reduction in carbon emissions.

Replacing a less efficient coal-fired power station with one of the latest technology will reduce carbon (i.e CO2) emissions per unit of electricity produced. In China, these efficiency savings replacement process may outstrip the growth in power supply from fossil fuels. But in the rest of Asia, the new coal-fired power stations will be mostly additional capacity in the coming decades, so will lead to an increase in CO2 emissions. It is this additional capacity that will be primarily responsible for driving the economic growth that will lift the poor out of extreme poverty.

The newer technologies are important in other types emissions. That is the particle emissions that has caused high levels of choking pollution and smogs in many cities of China and India. By using the new technologies, other countries can avoid the worst excesses of this pollution, whilst still using a cheap fuel available from many different sources of supply. The thrust in China will likely be to replace the high pollution power stations with new technologies or adapt them to reduce the emissions and increase efficiencies. Politically, it is a different way of raising living standards and quality of life than by increasing real disposable income per capita.

Kevin Marshall

 

China’s Renewable Policy in Context – The Ningxia Example

China has been lauded for an aggressive renewable policy, particularly for wind turbines. When you next hear praise for this policy, consider the example of the Ningxia Hui Autonomous Region in Mid-China. There are wind turbines being developed here, but only in the context of massive industrial development. That primary motive for the industrial development in this area is coal. For instance

Sun Mountain has something China needs very badly to feed the thundering beast of its economy: 14.6 billion tons of coal reserves lying under its rocky, arid desert. There are also 5 billion tons of limestone, nearly 2 billion tons of dolomite, and – a modern touch this – 300 days of wind power per year. But there is no doubt that King Coal, a tyrannical monarch who has devoured land and lives in Ningxia for the past 50 years, rules Sun Mountain. If China is to quench its thirst for electricity and industrial chemicals the old king will be on the throne for many years to come.

The scale of the development is seen from another, 2008, article.

Shenhua Ningxia Coal Industry Company….. has begun construction of a 1000 square kilometer coal-chemical complex in northwest China’s Ningxia province. The 280 billion yuan (40 billion USD) project, located at Ningdong, 42 kilometers southeast of provincial capital, Yinchuan, will include coal production, electricity generation and coal chemicals, including coal to liquid fuel conversion (CTL). (Italics mine)

The coal will be partly used for power generation.

By the time the base is fully operational in 2020 it will have eight power plants with a capacity of 30 million KW.

That is eight power plants in one small region, each bigger than anything in Britain. But why develop coal to liquid fuel conversion?

With China’s crude oil imports rising 12.3 percent to 163.17 million tons in 2007, and the price of oil reaching $140 a barrel in 2008, one of the most keenly watched facilities in the Ningdong base will be its coal to oil conversion plants.

As of 2013, one of these plants is already in operation, and should be producing the equivalent of 70,000 barrels per day (bpd) if the mid-2006 forecasts were correct. The other is being constructed, with a capacity of over 90,000 bpd. Although these two plants will only provide the equivalent of 4% of the 163.17 million tonnes imported in 2007, China has huge reserves of coal. Further, Ningxia is one of just 30 main coal producing areas.

This 2008 article admits to drawbacks of CTL.

Coal liquefaction projects have many drawbacks from the point of view of the environment and resource conservation. Firstly they consume vast amounts of water, which is a huge concern in China’s dry northwest. Fifty-seven percent of the land area of Ningxia is desert. The Ningdong coal-chemical base will draw 100 million tons of water from the Yellow river every year. Secondly, the process of liquefying coal emits much more carbon dioxide than conventional coal fired power stations. When fully operational, the Ningdong base will discharge 80,000 cubic meters of Carbon Dioxide (CO2) per day …….. Finally, while liquefied coal fuels provide an alternative to crude oil, they are not necessarily an efficient use of coal. It takes four to five tons of coal to produce one ton of oil, so coal to oil projects deplete coal reserves much more rapidly than conventional coal power generation.

Therefore, China’s rush into renewables should be seen as just a small part of the general industrialisation of China, whilst minimising dependence on external energy sources. The eco-image, such as support for Earth Day and Kite Tournaments is just to keep the environmentalists from trying to sabotage China’s rush to western levels of prosperity for 1300 million people.

Why China will not Constrain it’s CO2 Emissions

There is an interesting and simple explanation of why it is not possible for the West to emulate China’s growth rates at the ASI Blog. This is basically Robert Solow’s exogenous growth model – that is explained graphically at Wikipedia. China is increasing it’s output per capita by increasing it’s capital per worker on by moving up the current technological production frontier. They are still on the lower part of the curve, so the returns to substituting capital goods for labour are quite large. The western countries are at the top end, so returns can only come from moving to a higher technological boundary.

This does not explain all of the phenomenally high growth rates of China against the West. A clue is that it is not the traditional manufacturing industries that China is entering, such as steel, shipbuilding and textiles. It is also the production of the latest high-tech gadgets invented in the West. The reason is that the time taken in turning prototype to mass production is much quicker in China, due to a lack of regulations and statutory planning consents. Yet most of the profits from the last innovations come before anyone can replicate them. A saving of a few months or weeks for the latest mobile phone or digital camera can mean the difference between millions sold at very high margin and tens of thousands sold at a much lower margin.

China’s high growth rates are also accompanied by a rapid increase in energy production. Much of this comes from coal and oil. The advantage of fossil fuel over clean energy is primarily one of cost, but there is time and convenience as well. Coal is based on well-established technologies and China has large reserves of its own, as well as cheap and reliable supplies from elsewhere. Oil-fired power stations are easy to turn on and off. Against this nuclear power stations take a long time to build (and longer to de-commission), along with higher unit costs. Wind power and solar power are highly expensive, and have an extreme mismatch between the timing of the power supply and power demand. Hydro is limited in availability, takes a long time to build, and (like the Three Gorges or the Itaipu dams) cause environmental damage and the displacement of large numbers of people. To constrain China’s growth in energy will create a slowing down in the ability of China’s entrepreneurs to create new output, and therefore constrain a major advantage of manufacturing in China. The Chinese officials will attend the Climate Summits, smile politely and undermine any binding global commission agreements. It is not out of obstinacy that they do it. Rather they understand that the potential costs of constraint far outweigh any benefits.