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Making the Leap to Cleaner Technology
Lingering Challenges in Technology Diffusion
Examples from Chinese Industry
Prof. Stephanie B. Ohshita University of San [email protected]
RAEL Seminar, UC Berkeley ~ March 2004
Stephanie B. Ohshita, USF
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
Chinese Energy ConsumptionSource: Based on LBNL 2001; EIA 2003a, 2003b. Author estimates were used to reconcile differences in data sets.
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40
1980 1985 1990 1995 2000
Year
Primary Energy Consumption (EJ)
HydroNatural GasOilCoal
Stephanie B. Ohshita, USF
Cleaner Coal Technology
Preparation
Processing
Conversion
Combustion
Pollution Control
Coal Washing (e.g. Jigs, Control Systems)
Briquetting, Coal Water Mixture (CWM)
Coking, Gasification, Liquefaction
Circulating Fluidized Bed Boilers (CFB)
Flue Gas Desulfurization (FGD), Ash Utilization
COAL FLOW TECHNOLOGY
Stephanie B. Ohshita, USF
China CCT Facts & Figures
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.
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.
Stephanie B. Ohshita, USF
5 Int’l Programs on CCT for China
1) Japan’s Green Aid Plan, CCT Program2) Global Environment Facility (GEF)-World
Bank Industrial Boiler Project3) 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
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
Technology Transfer
NEDO Beijing
NEDO
Industry Associations
Industrial Firms
Policy Dialogue
Japan-China Network for Cleaner Energy Technology Transfer
MITI(Lead Agency)
China Japan
Industry Bureaus
Industrial Enterprises
Local Government
SDPC (Lead Agency)
Stephanie B. Ohshita, USF
GEF-World Bank Industrial Boiler Project
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)
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
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 government-funded 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
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
1992 Trial Collection of (Higher) SO2 Fees 1994 CCT Plan 1995 Air Pollution Control Law (Revised) 1996 Total Emissions Control Policy 1996 "15 Smalls" Policy 1997 9th Five Year Plan: Clean Coal Technologies 1997 9th Five Year Plan: Environmental Protection 1997 China Trans-Century Green Project 1998 Two Control Zones Policy: Acid Rain, SO2
1998 Energy Conservation Law 1998 Guidance on Foreign Investment (Revised) 2000 Air Pollution Control Law (Revised)
Stephanie B. Ohshita, USF
246
280
52174
40
533
Central-Washed
Central-Unwashed
Local-Washed
Local-Unwashed
TVE-Washed
TVE-Unwashed
Central Mines 47% Washed
Local Mines 23% Washed
TVE Mines 7% Washed
Total 26% Washed
Chinese Washed Coal (Mt) by Mine OwnershipSource: Data for 1997 from CCPUA and EPRI 2000.
Stephanie B. Ohshita, USF
Chinese Coal Production by Ownership TypeSource: 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.
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400
600
800
1,000
1,200
1,400
1,600
1980 1985 1990 1995 2000
Year
Mt
Private Mines
Collective Mines
Local State-Owned Mines
Large State-Owned Mines
Stephanie B. Ohshita, USF
Implications for Climate Change Mitigation in China
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