Coal mine blast in Shanxi serves stark reminder

The devastating coal mine explosion earlier this week in China’s Shanxi province that claimed 105 lives has served as a grim reminder of the heavy costs of China’s reliance on coal as an energy source. 70% of China’s electricity is generated from coal. Economic growth has spurred demand for the dirty resource, with an average of a new coal plant a week coming online onto China’s electricity grid. To feed the insatiable appetite of the hungry coal plants, coal mines have been unable to spring up fast enough and many circumvent safety regulations and operate illegally without the necessary permits.

Source: People’s Daily Online

Taking a break from the world’s most dangerous job

Indeed, although China has the third largest reserves of coal (12.6% of the world’s share), it has become a net exporter of coal (the government is encouraging its coal mining enterprises to look overseas for expansion). Almost two years ago, Beijing launched a series of coal mining reforms that they have continued to update and tighten to enhance the safety and environmental aspects of “the world’s most dangerous job.” It is obvious from the Shanxi disaster that full reforms will not happen overnight.

Increasing Coal Use Efficiency

Apart from tackling mine safety issues and consolidating of inefficient, illegal small mines, it will be important to address the root of the problem–increased coal demand. We can think coal demand in terms of use and source, i.e. (1) the way (how efficiently or inefficiently) we use coal, or (2) our very choice of using coal in the first place over more sustainable and renewable sources of fuel. For today, let’s take a closer look at how some Chinese enterprises are brining innovative solutions to increasing the efficiency of coal use in China.

Cogeneration

There are no quick or obvious solutions, but because the life cycle of coal plants can be as long as 50 or 60 years, it is imperative that the cleanest possible technologies be installed in coal plants now. Cogeneration (or combined heat and power, or CHP) is one strategy. Whereas conventional power plants produce heat as a byproduct that goes unused, cogeneration channels the heat for domestic and industrial heating purposes, displacing additional fuel consumption (including coal) that would have been needed to fulfill such heating needs. In China, Hong Kong headquartered GCL-Poly Energy operates or owns twenty or so cogeneration power plants, including six coal-fired power plants, and recently concluded a highly successful IPO on the Hong Kong stock exchange.

HTAC

Another Chinese company making news in the investment community is Beijing Shenwu Thermal Technology, which manufactures equipment such as regenerative combustion furnaces (based on its proprietary high temperature air combustion (HTAC) technology) that reduces fossil fuel consmption and carbon emissions in various heavy industries. Shenwu is the first Chinese company to join the Chicago Climate Exchange, the voluntary carbon emissions market in the U.S. and is on the World Resource Institute’s list of sustainable “New Ventures.”

In other news, there is some controversy over a coal power company’s promise to go green in Hong Kong.

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Ready…set…jump!

Greetings all. Welcome to the kickoff of The Green Leap Forward, a blog dedicated to a greener China. As James Kynge observes in his award winning book–China Shakes the World–there exists in China a fundamental mismatch between “its frailty of its physical environment” on the one hand, and “the prodigious strength of its human capital” on the other hand, exerting an unsustainable toll over its natural resources. The consequences of such disequilibrium is familiar to anyone who has picked up a newspaper–nothing less than an ecological dystopia, as Elizabeth Economy starkly observes.

But awareness of the enormous environmental and energy challenges that China faces has reach the highest levels of the Chinese government. My hope for this blog is to track the latest developments of China’s attempts to green its path towards a “peaceful rise” in a cultural revolution that amounts to nothing less than a great Green Leap Forward, and hopefully inspire a broad audience both within China and without to think about what is clearly an enormous and grave situation not just for the Chinese, but for every citizen of the world. I would like to invite readers to post comments or questions.

For this blog’s maiden post, I would like to highlight the various measures and policies that China has enacted in recent months:

• It released a 62-page national climate change policy that include measures to reduce energy intensity from 2005 levels by 20% in 2010 and increase forest coverage by 20% over the same period;
• Small, inefficient coal mines have been closed and restrictions on new coal mines have been enacted;
• Thermal power stations, smelters, cement plants and electrolytic aluminum producers seeking an IPO will have to meet tougher environmental requirements before a listing is approved;
• The establishment of a “green credit policy,” under which bank loans for corporate polluters have been denied;
• Foreign direct investment policies have been revised to encourage investments in clean energy and environmental technology companies while raising the hurdles for resource hungry of polluting industries;
• Plans are in the works for Beijing to establish Asia’s first pollution credits exchange;
• A proposed policy to promote environmental governance that was quashed a few years ago will be revived; the State Council has declared that the promotion prospects of provincial and municipal government leaders will be hindered if their respective jurisdictions fail to achieve certain energy conservation and emissions reduction targets
• A database of information on the latest environmental technologies is being set up to help heavy industry comply with tough environmental standards.

This flurry of new policies have been catalyzed by the ever enlarging microscope that China finds itself under as it the rest of the world moves its manufacturing base to China and its trade surplus continues to grow at the expense of the U.S. and the E.U. , international concerns over climate change hit a tipping point, and the world prepares for China’s economic coming-of-age party at next year’s Beijing Olympics. Time will tell whether these policies are effective, and I get the feeling it will be sooner rather than later.

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