Transcript ENERGY AND SUSTAINABLE DEVELOPMENT IN CLIMATE …

Making the Leap to Cleaner Technology
Lingering Challenges in
Technology Diffusion
Examples from Chinese Industry
RAEL Seminar, UC Berkeley ~ March 2004
Prof. Stephanie B. Ohshita
University of San Francisco
[email protected]
Motivations: More than Climate Change
A per capita climate accord “must drive a rapid process of
technology “leapfrogging” in the South. Indeed, it must
prevent the South from building a fossil fuel infrastructure
that mimics the unsustainable path of the North, even as it
drives decarbonization in the North. The key is that the
South’s leapfrogging must be part of a genuine
development process, and the North must pay for it. This
can’t be just another false promise.” Athanasiou & Baer 2002
Stephanie B. Ohshita, USF
Lingering Challenges / A Question
. . . Inappropriate technology . . . High capital costs . . .
Limited operational and maintenance know-how . . .
Poor technical training . . . Missing regulatory incentives . . .
Difficulty obtaining financing . . .
Concerns over intellectual property and return on investment . . .
How can the same old problems in energy technology
transfer be overcome,
to mitigate climate change and a host of other problems
in the developing world?
Stephanie B. Ohshita, USF
China Energy & Environment
 China is the world’s 2nd largest coal consumer, energy
consumer, and CO2 emitter.
 Coal accounts for 75% of China’s energy, 30% of which
is directly consumed by industry.
 Over 75% of China’s SO2 pollution, acid rain, and CO2
emissions come from coal combustion.
 Acid rain affects more than 30% of the country.
 500 major cities in China exceed safe air quality levels.
 Nearly 30% of respiratory disease in China is attributed
to air pollution.
Stephanie B. Ohshita, USF
Primary Energy Consumption (EJ)
40
35
30
25
H ydro
N atural G as
O il
C oal
20
15
10
5
0
1980
1985
1990
1995
2000
Year
Chinese Energy Consumption
Source: Based on LBNL 2001; EIA 2003a, 2003b. Author estimates were used to reconcile differences in data sets.
Stephanie B. Ohshita, USF
Cleaner Coal Technology
COAL FLOW
TECHNOLOGY
Preparation
Coal Washing (e.g. Jigs, Control Systems)
Processing
Briquetting, Coal Water Mixture (CWM)
Conversion
Coking, Gasification, Liquefaction
Combustion
Circulating Fluidized Bed Boilers (CFB)
Pollution
Control
Stephanie B. Ohshita, USF
Flue Gas Desulfurization (FGD), Ash
Utilization
China CCT Facts & Figures
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Coal Washing
Costs 500~600 yuan/ton SO2
 Roughly 30% of coal is washed.
 Now required for mines >1.5% S.
 Have simple domestic technology;
need foreign control systems, water
saving technology.
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Flue Gas Desulfurization
Costs 1,400~1,600 yuan/ton SO2
 Less than a dozen in all of China.
 Now required for new power stations,
not yet for industrial enterprises.
 Not available domestically.
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Stephanie B. Ohshita, USF
5 Int’l Programs on CCT for China
1) Japan’s Green Aid Plan, CCT Program
2) Global Environment Facility (GEF)-World
Bank Industrial Boiler Project
3) US Dept. of Energy (DOE) CCT Promotion
(IGCC)
4) UK Dept. for Int’l Development (DFID)
Guizhou and Shanxi Energy Efficiency
(GASEE) Programme
5) UK Dept. of Trade and Industry (Dti) CCT
Promotion
Stephanie B. Ohshita, USF
Japan’s Green Aid Plan, CCT Program
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Approach: Demonstrate proven technology at existing
enterprises (retrofit approach) with government grants;
supplement with technical assistance
Technology: multiple, commercially proven
Players: nat’l and local agencies, Japanese private
manufacturers, Chinese industrial enterprises
Theoretical Advantages: Lower risk of introducing proven
technology; potentially wide diffusion by targeting existing
enterprises. Foster long-term relationships through dialogue,
cooperative studies, and training.
Actual Experience: Demonstrated technical feasibility of
selected CCT, but no diffusion. To promote diffusion, conducting
more economic analysis and working with Chinese government
on specific policy actions.
Stephanie B. Ohshita, USF
Japan-China Network
for Cleaner Energy Technology Transfer
China
SDPC
(Lead Agency)
Industry
Bureaus
Japan
Policy
Dialogue
NEDO
Beijing
Local
Government
Industrial
Enterprises
Stephanie B. Ohshita, USF
MITI
(Lead Agency)
NEDO
Industry
Associations
Technology
Transfer
Industrial
Firms
GEF-World Bank Industrial Boiler Project
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Approach: Fund license acquisition from foreign firms for CCT
manufacture in China; supplement with technical assistance.
Technology: industrial boilers
Players: int’l agencies, foreign tech manufacturers, Chinese
manufacturers & industrial enterprises
Theoretical Advantages: Reduce costs through local
manufacture; encourage diffusion by making technology
available domestically; enhance local knowledge of cleaner and
more advanced technology.
Actual Experience: Strong interest from Chinese enterprises,
but prominent international firms unwilling to participate due to
concerns over competitive advantage, patent protection, and
guarantee risks.
Stephanie B. Ohshita, USF
US DOE CCT Promotion (IGCC)
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Approach: Study and demonstrate advanced technology (e.g.,
IGCC) at new facilities with government support
Technology: advanced CCT, Integrated Gasification Combined
Cycle power generation
Players: nat’l agencies, US tech suppliers, Chinese power
plants
Theoretical Advantages: Achieve greater pollution reduction
and energy efficiency benefits by leapfrogging to advanced new
technology; reduce new technology risks through government
support.
Actual Experience: US government unwilling to fund
demonstration for political and economic reasons; newness,
complexity, and high cost of technology present barriers to
demonstration and diffusion.
Stephanie B. Ohshita, USF
UK DTI CCT Promotion
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Approach: Promote CCT exports, support commercial
activities
Technology: multiple, commercially proven
Players: UK tech suppliers, Chinese industrial enterprises, nat’l
agencies
Theoretical Advantages: Reduce risk through government
backing; commercially viable technology more likely to diffuse
widely; promote diffusion without large cost of governmentfunded technology demonstration.
Actual Experience: A few large UK firms successful in CCT
transfer; looking to foster long-term relationships among UK and
Chinese SMEs, research institutes, and government agencies.
Stephanie B. Ohshita, USF
UK DFID GASEE Programme
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Approach: Make incremental improvements in existing
equipment through technical assistance and use of mostly local
technology.
Technology: existing, mostly local
Players: UK engineers, Chinese industrial enterprises, nat’l and
local agencies in Guizhou and Shanxi
Theoretical Advantages: Achieve quick, low-cost
improvements in energy efficiency and environmental quality
through bottoms-up cooperation at existing enterprises.
Actual Experience: Positive achievements during first stage of
program and Chinese interest in disseminating results, but
funding limitations halted further progress.
Stephanie B. Ohshita, USF
China Domestic Policies: Coal Washing
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1992
1994
1995
1996
1996
1997
1997
1997
1998
1998
1998
2000
Stephanie B. Ohshita, USF
Trial Collection of (Higher) SO2 Fees
CCT Plan
Air Pollution Control Law (Revised)
Total Emissions Control Policy
"15 Smalls" Policy
9th Five Year Plan: Clean Coal Technologies
9th Five Year Plan: Environmental Protection
China Trans-Century Green Project
Two Control Zones Policy: Acid Rain, SO2
Energy Conservation Law
Guidance on Foreign Investment (Revised)
Air Pollution Control Law (Revised)
China Domestic Policies: The Story of
Coal Pricing
Stephanie B. Ohshita, USF
Total
26% Washed
Central Mines
47% Washed
246
Centr al- Washed
533
Centr al- Unwashed
Local- Washed
280
Local- Unwashed
TVE-Washed
TVE Mines
7% Washed
TVE-Unwashed
40
174
52
Local Mines
23% Washed
Chinese Washed Coal (Mt) by Mine Ownership
Source: Data for 1997 from CCPUA and EPRI 2000.
Stephanie B. Ohshita, USF
1,600
Private Mines
1,400
Collective Mines
Local State-Owned Mines
1,200
Large State-Owned Mines
Mt
1,000
800
600
400
200
0
1980
1985
1990
1995
2000
Year
Chinese Coal Production by Ownership Type
Source: Based on LBNL 2001: Table 2B.1; US Embassy Beijing 2001; Asia Pulse 2002.
Note: Data for 1999-2002 are estimates, as the official Chinese statistics have been undergoing revision.
Stephanie B. Ohshita, USF
Implications for Climate Change
Mitigation in China
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Coal still dominating, even as nat’l gas and
renewables make inroads -- need CCT
Must align with economic reforms to promote
cleaner energy technology diffusion
Sub-national networks are crucial for info and
technology exchange, training, and financing
At the same time, int’l financing needed
Need supporting engineering/ manufacturing/
management/ maintenance infrastructure
Stephanie B. Ohshita, USF