Chinese officials recently announced plans to decrease rare earth shipments by 72%, causing anxiety amongst global clean tech firms. However, it will reportedly offer access to restricted resources to companies that move operations to China.

Many companies are already picking up and moving to the region because of the attractiveness of low labor costs and proximity to Asia’s fast-growing renewables sector. Many analysts expect this moving trend to speed up as clean tech firms take precautions for potential limitations on rare earth exports that are essential to production.

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The International Energy Agency reports that China is the world’s largest energy consumer, although the Chinese government has denied these figures and claims it is still #2 behind the United States.  Regardless, Chinese power consumption is expected to continue to grow strongly, as its domestic power production.  By some estimates, Chinese power capacity could double to 1,600GW within the decade.

China has focused its efforts on energy efficiency and reducing the carbon intensity of its economy as it faces international pressure to keep its skyrocketing greenhouse gas emissions under control.  Introducing a carbon price, something the United States has thus far been unable to achieve, would help to increase efficiency without limiting capital flows to the renewable energy and cleantech space.

No firm details have been released yet, but it is expected that a commitment to carbon trading will be incorporated into China’s next 5-Year Plan.

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Over 2,000 steel mill, cement works and other energy-intensive factories have been ordered to close down by the end of September.  This announcement comes on the heels of another made by the powerful National Development and Reform Commission last week, which forced 22 provinces across China to stop providing discounted electricity to energy-intensive industries such as aluminum production.

Energy efficiency has become increasingly important in Chinese economic planning.  The nation’s current five-year plan targets 20% less energy usage per unit of economic output this year compared with 2005.

However, high industry output since last winter has driven China’s energy consumption to sky-high levels, producing the single largest surge ever of greenhouse gases by a single country.  According to the International Energy Agency (IEA), China surpassed the United States last year to become the world’s largest consumer of energy after becoming top global carbon emitter in 2006.  These rankings, combined with continued high expectations for economic growth, lead many to doubt China’s ability to meet its stated energy intensity goals.

Nevertheless, China is forging ahead with plans for major new investment in energy efficiency, including $15 billion into energy efficient vehicles.  $8 billion of this proposed funding would be set aside for development into pure energy efficiency techniques.  The remaining funding will be funneled towards infrastructure construction, potentially including electric vehicle charging station.

China is currently pushing to put 4 million eco-friendly vehicles on its roads by 2012.

Read more about energy efficiency here and proposed vehicle investments here

Renewables

• Total renewable power capacity in China reached 226GW in 2009, representing 1/4 of the nation’s total.  The government is calling for a total of 500GW of renewable power capacity by 2020, or about 1/3 of total power capacity.
• Renewable Portfolio Standards (RPS) for Chinese utilities require 8% of all capacity and 3% of power to be generated from non-hydro renewables by 2020.
• Revisions to the 2005 Renewable Energy Law will require increased cooperation between new renewables and the grid to ensure the generated power is transmitted efficiently.  The revisions also strengthened the Ministry of Finance’s renewable energy fund, which collects a tax on all electric power sales.

Wind

• Chinese wind power in particular grew thirty times over between 2005-2009.   China is now just behind the U.S. in total installed wind capacity.  Its turbine manufacturing industry grew to the world’s largest in 4 years.  The government has amended the wind power Feed-in-Tariff, and aims for 150GW of new installations by 2020.

Solar

• The “Golden Sun” program, introduced in 2009, will provide generous subsidies for solar PV installations.  Currently 300 projects have been proposed, totaling nearly $2.9 billion in investment.

Nuclear

• China has expanded its pledge to achieve 15% of all primary energy from “non-fossil fuel sources” by 2020.  This expanded directive will allow nuclear power to be included in the total accounting.

Carbon

• New carbon intensity targets were announced in Dec 2009, which aim to reduce the carbon intensity of GDP by 40-45% by 2020 relative to 2005 levels.

Energy Efficiency

• The 5 Year Plan for 2006-2010 aims to increase energy efficiency by 20%, including pumps, fans, boilers and the production of materials like steel and cement.

Read the full article here ….

The drought in China’s industrial north is reaching dangerous levels – the area is home to 44% of the population, but only 14% of the water.  As industrial production increases, Chinese power plants in the north will need 82 million ML of water each year by 2030.

This project will transport 44.8 million megaliters of water every year through a complex, three-pronged plan which consists of an eastern, western and a central route.  Encompassing nearly 1800 km of pipelines, 23 pumping stations, up to 7 dams and 2 giant tunnels beneath the Yellow River, the project will drain one river to fill another and pump water flow against gravity.

Although officials say this project may “ease the water shortage in the north” in the short term, conservation and new efficiency measures are the true long-term measures to solve China’s water woes.

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The REN21 report highlights the shift in manufacturing and deployment of these new energy technologies from developed nations to growing ecnomies like China, Brazil and India.

In 2009, China produced 40% of global solar PV and 30% of all wind turbines; a massive increase from 10% in 2007.

However, despite its advances in implementing green power, China’s carbon dioxide emissions also increased in 2009.  It has overtaken the United States and now claims the title of highest emitting nation in the world.

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Global emissions levels remained relatively unchanged in 2009 largely because of Chinese and Indian contributions, despite predictions from groups such as the International Energy Agency (IEA) which thought the global economic meltdown and decrease in manufacturing would assuredly reduce emissions worldwide.

The Netherlands Environmental Assessment Agency notes that carbon dioxide emissions per person in China are now 6.1 tons, roughly equal to France which clocked in at 6.0 tons in 2009.  This figure represents a major increase for China, which in 1990 emitted only 2.2 tons per capita.    Interestingly, this increase comes Chinese wind and solar energy capacity has doubled for the fifth year in a row.

Because of its use of nuclear energy, French emissions are actually on the lower end of the scale in comparison to other developed nations.  Per capita emissions in other EU member nations were 7.9 tons in 2009, down from 9.1 tons in 1990, while per capita emissions in the United Sates fell to 17.2 tons in 2009, decreasing from 19.5 tons in 1990.

All in all, the Dutch agency now reports that 53% of 2009 global emissions came from developing nations, with 44% coming from the developed world.  International air and sea transportation accounts for the remaining 3%.

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Global coal use, however, has remained steady.  In fact, as a percentage of world primary energy usage, coal has risen to levels not seen since 1971.

On the other hand, oil’s percentage of global energy usage has fallen consistently over the past decade; from 39.00% in 1999 down to 34.77% in 2009.

As oil production becomes more difficult and expensive, coal is increasingly being employed as a source of transportation fuels.  Nations like South Africa and China have been expanding their coal-to-liquid (CTL) programs, and China reportedly has six major CTL projects under development.

CTL processes may present an alternative way to generate liquid fuel, but it comes at a price.  CTL produces nearly double the greenhouse gas emissions of conventional fuel production from oil, and many climate and environmental advocates worry that if CTL programs become more widespread the world would experience increased emissions levels.

Read more here…

However, despite this overall reduction, China’s greenhouse gas emissions have grown sharply as the nation rapidly industrializes and continues to construct new coal-fired power plants.  China is now the world’s leading emitter, having overtaken the United States in 2008.  This past year, China ‘s fossil fuel combustion released 7.5 billion tons of CO2 into the atmosphere.

China is not the only developing nation whose emissions have grown sharply.  India also saw an increase of 7%, and it has now overtaken Russia as the world’s third largest emitter.  In aggregate, the developing world now accounts for half of all global emissions.

United States emissions, on the other hand, fell by 6.5% to 5.9 billion tons in 2009, the lowest level since 1995.  However, “although the share of emerging markets is growing, the industrialized countries remain the preponderant source of historical greenhouse gases,” reminds Nick Robins, head of HSBC’s Climate Change Center of Excellence.

The United States and China, as well as the world’s other top emitters, now find themselves under tremendous pressure to either extend the Kyoto Protocol or formulate a successor to the climate treaty, which is set to expire in 2012.  Nations are also attempting to come up with domestic emissions reductions plans of their own.  “In terms of future emissions targets, China is ahead of the U.S. because it has set itself commitments to reduce carbon intensity, while the U.S. is struggling to get climate legislation through Congress,” remarks Robins.

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The deals, designed to increase cooperation in the sector, cover areas such as aviation biofuel, distributed energy systems using natural gas as fuel, smart meters and cellulosic ethanol, the China Daily reported. A number of Chinese and U.S. companies would be involved in the eight deals.

The report quoted analysts that the agreements between the world’s two largest energy users would encourage global collaboration in increasing energy efficiency and protecting the environment.

The agreements came at the conclusion of the two-day China-U.S. Strategic and Economic Dialogues in Beijing.

Zhang Guobo, head of the National Energy Administration, also noted bilateral collaboration in renewable energy development, adding: “The United States has advanced technology, and China has a huge market,” the China Daily reported.

U.S. Ambassador to China Jon Huntsman was quoted as saying the two countries will “take every angle” to ensure their cooperation in energy and environment.

Zhang said renewable energy development is important for China to achieve goals of increasing the use of non-fossil energy to 15 percent of primary energy use by 2020, and reducing carbon intensity by 40 percent to 45 percent in 2020 from 2005 levels, China Daily reported.

He said China will continue to focus on the development of hydro, wind, solar, and biomass energy in the renewable sector.

Earlier, U.S. Energy Secretary Steven Chu was quoted as saying improving energy efficiency would both reduce greenhouse gas emissions and boost economic growth.
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