Coal is King in Energy-Hungry Asia Power Companies Face Obstacles in Developing Cleaner Alternatives Business of Green Iht.Com/Blog

By Keith Bradsher

By next autumn, this muddy construction site in a rural part of eastern China will give way to a small power plant that burns corn and cotton stalks to generate electricity for nearby villages and steam for a neighboring industrial complex.

The plant would be ready sooner, but only four companies in China make the specialized precision boilers that the biomass plant requires. And all those companies are plagued by backed up orders and delivery delays. Similar problems bedevil China’s wind turbine industry.

But the same big utility company building the green plant in Boxing, CLP, has just opened a new coal-fired plant in southernmost China. On schedule and built for half the price it would cost in the West, that plant will generate 1,200 megawatts of electricity – compared with 6 megawatts from the Boxing biomass plant. CLP is so impressed that it is bidding to build coal-fired plants in India with Chinese technology.

These are the realities faced by companies seeking to make themselves more environmentally friendly in China. Coal is king here because coal-fired plants are quick and cheap to build and easy to staff. While the Chinese government has set goals for increasing the use of a long list of alternative energies – including wind, biomass, hydroelectric, solar and nuclear – all of them face obstacles, from bureaucracy to manufacturing bottlenecks.

CLP’s dilemma in choosing technology for its power plants is a case study in how one company grapples with the need to provide electricity to hundreds of millions of impoverished Asians while also limiting emissions of global warming gases.

Controlled by the Kadoorie family, among Hong Kong’s wealthiest families and one with a long history of supporting environmental causes, CLP is preparing to consider a plan to limit greenhouse gas emissions at its plants at its next board meeting on Tuesday.

While the details are still being worked out, the company plans to commit itself to “material and dramatic reductions” in such emissions in industrialized countries like Australia, while seeking to control growth in emissions in developing countries, like China, said Andrew Brandler, CLP’s chief executive.

“We think the world has to address the issue of climate change as a matter of urgency,” Brandler said.

Yet CLP’s operations are growing so quickly in China, India and other developing countries, in response to soaring electricity demand, that Brandler said its total emissions of global warming gases may actually increase in the short term.

The problem is particularly acute because governments across Asia, from China and India to Indonesia and the Philippines, are turning mainly to coal to meet their soaring electricity needs and prevent blackouts, even though burning coal produces more global warming gases than any other major source of electricity.

China’s increase has been most dramatic. The country built 114,000 megawatts of fossil-fuel-based generating capacity last year alone, almost all of it coal-fired, and is on course to complete another 95,000 megawatts this year.

By comparison, Britain has 75,000 megawatts in operation, built over a span of decades.

The most talked-about alternative to coal in China involves plans to quadruple the country’s share of power from nuclear energy by 2020. The United States and France are vying to sell their technology for the dozens of reactors that would need to be built.

But the plan still amounts to just 31,000 megawatts of nuclear power over the next dozen years.

“That’s minuscule,” said Jonathan Sinton, a China expert at the International Energy Agency. China builds more coal-fired capacity than that every four months.

Two big questions linger over even those modest goals: Can equipment be manufactured for dozens of nuclear reactors, and can China train enough staff to run them?

At CLP’s Daya Bay nuclear plant in Shenzhen, a house-sized dome of specially hardened steel sat next to an immense crane one recent morning, waiting to be swung and bolted into position as part of the site’s sixth reactor.

But at least Daya Bay’s dome is here, reactors elsewhere in China wait up to several years. Only a handful of steel mills around the world can cast the thick domes, and only now are the first two mills in China even taking delivery of equipment needed to make them.

Steven Lau, the first deputy general manager of the Daya Bay nuclear plant, walked from the unfinished reactor to the outdated but orderly control room of the earliest of the reactors, built by the French nearly two decades ago, a room 11 meters, or 35 feet, long and lined with tall, bulky computer controls.

The power plant’s 1,750 employees are training 500 interns at a time, Lau said; the government-owned nuclear power company asked that 1,000 be trained at a time, but the joint venture running the plant couldn’t handle that many.

By contrast, there is no shortage of workers to run coal-fired power plants. Indeed, there is a surplus. China is dotted with decrepit, state-owned coal-fired plants that each employ 900 to 1,000 employees to produce just 50 to 100 megawatts. The government frequently asks companies to close one of these inefficient, heavily polluting operations and provides jobs or money to the workers before allowing the construction of a new coal-fired plant.

CLP’s modern coal-burning plant in Fangchenggang in southern China – a pair of 79-meter gray towers looming over a tropical landscape of woods and emerald rice fields dotted by gray oxen – employs just 270 workers to generate 1,200 megawatts.

China is building so many new coal plants that the construction cost per megawatt has fallen to just $500,000 because of economies of scale. Costs are falling for nuclear plant construction too, but not as much.

Coal also takes fairly little land, unlike wind, solar or hydroelectric power – an advantage in densely populated rural areas.

Before the Fangchenggang plant could be built, the local government had to buy the land from residents of a nearby fishing village, triggering discussions over whose land should be sacrificed, said Zhang Zhengde, a village elder.

“We would prefer to have a smaller site – if there were more land, it would disrupt our lives, and government compensation cannot solve that,” he said.

Coal faces constraints, too. Shortages have been emerged of the precision-machined 5-meter to 10-meter turbine shafts that revolve 50 times a second to produce electricity.

But the wind industry is bedeviled by years-long shortages of a wider range of parts, as well as contradictory regulatory policies.

For instance, Beijing has mandated that power transmission companies pay at least 6.5 U.S. cents per kilowatt hour to buy wind- generated electricity from approved power producers, not much above the 4.5 cents an hour they pay for coal-generated power. But the premium is so small that only one-third of one percent of the nationally regulated wind power projects approved in 2004 have actually been built, and none of those approved in the past two years, said Vivek Kher, a spokesman for Suzlon Energy, an Indian manufacturer of wind turbines.

Some provincial governments have ordered payments of 8.1 cents for wind projects they regulate, he said, and these projects are being built.

Plans have slowed in China to expand the use of natural gas, a fossil fuel that burns more cleanly and produces less greenhouse gas than coal or oil. It has proved costly and difficult to build pipelines from gas fields in western China, while liquefied natural gas for transport in ships is in short supply. Oil, which is cleaner than coal but dirtier than natural gas, is becoming prohibitively expensive as prices approach $100 a barrel.

The future of hydroelectric power in China is clouded by severe environmental problems at the Three Gorges Dam on the Yangtze River.

One of the strangest features of China’s energy policy is the paucity of environmental controls on coal-fired plants, because rules governing them were written long ago. Renewable energy projects actually face a more stringent review of their environmental impact; including, for instance, how many birds a wind turbine will kill, said K.K. Chan, CLP’s managing director of renewable energy.

China has begun telling companies that build coal-fired plants that they should choose so-called “supercritical” technology. Such technology increases construction costs, but the plant then requires 10 percent less coal to run, reducing emissions and long-term costs.

CLP’s new coal-fired plant at Fangchenggang, near the Vietnamese border, uses supercritical technology. But it still produces considerably more global-warming gases than burning natural gas or using nuclear power or renewable energy like biomass.

Now CLP wants an international consensus on a broad successor to the Kyoto Protocol, which sets limits on greenhouse gas emissions through 2012. Clear limits on future emissions would force utilities to avoid projects that contribute to global warming, and, unlike Kyoto, might extend to more of Asia. Kyoto exempts developing countries, including China, from emissions limits.

One reason CLP seeks a new consensus is the bruising lesson it recently received. The company had proposed building a coal-fired plant in the Philippines employing supercritical technology and burning low-sulfur coal, a more expensive but less polluting variety of coal.

In the end, though, the developer found an American private equity firm that was willing to bankroll a low-tech, subcritical plant using more-polluting coal, said Brandler, declining to identify the project or the participants. (Greenpeace officials said that they were also not aware of which project it might be among many in the Philippines.)

“You’ve got to get the rest of the industry to come along,” said Brandler. “That’s why we will be agitating more.”

Originally published by The New York Times Media Group.

(c) 2007 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.