Friday, August 9, 2013, 09:01
Asia Weekly: Leading light
By Karl Wilson in Sydney

Asia Weekly: Leading light

Asia Weekly: Leading light

Miners work on equipment for transporting coal at a mine in Huangling county, western China’s Shaanxi province. Despite Asia’s dependence on fossil fuels, continued improvements in power generation efficiency are in place. (AFP)

Asia is fast emerging as the world leader in the race for clean energy investment, with China at its epicenter.

Finding ways to tap into the energy from the sun, wind, waves and water not only produces clean energy but reduces the amounts of greenhouse gas emissions substantially and helps produce a cleaner environment.

Analysts say the competition for clean energy — whether it is solar, wind, geothermal or hydro power — has resulted in a reshuffling of the old world order from Europe and the United States to Asia, which is now leading the way in technologies such as solar and wind power generation.

A recent report by the US-based Pew Charitable Trusts showed China had advanced its position last year as the global leader for clean energy finance. It attracted $65.1 billion in investment, 20 percent more than in 2011 and an unsurpassed 30 percent of the G20 total.

At the same time Asia became the “leading regional destination for clean energy investment” with spending growing 16 percent to $101 billion, accounting for 42 percent of the global total, the report said.

The Pew report, Who’s Winning the Clean Energy Race?, said China had garnered 25 percent of all solar energy investment, setting a one-year record with $31.2 billion invested.

China also accounted for 37 percent of all wind energy investment ($27.2 billion) and 47 percent of the investment in the “other renewable energy” category ($6.3 billion) that includes small hydro, geothermal, marine and biomass.

Meanwhile, Europe, the Middle East and Africa recorded an investment decline of 22 percent in 2012, to $87.6 billion, with investments falling in leading markets such as Germany, Italy, the United Kingdom and Spain as governments curtailed incentive programs.

“Investment fell most precipitously in the Americas, with clean energy financing down 31 percent in 2012, to $50.3 billion,” the report said.

In Asia, however, the picture is quite different.

While investments in India’s and Indonesia’s clean energy sectors have been falling, both countries are pushing ahead with clean energy projects.

India, the fourth largest energy consumer in the world after the US, China and Russia, is also the world’s second largest burner of coal, after China.

India aims for 30 gigawatts (gW) of clean power from 2012 to 2017, which will include up to 15 gW of wind power and 10 gW of solar.

Indonesia, home to an estimated 40 percent of globally known geothermal energy resources, aims to increase its geothermal capacity from today’s 1.2 gW to 9.5 gW by 2025 — a 692 percent increase.

Almost half the world’s population without electricity live in Asia, but many of these people will not remain in the dark for much longer. By 2035, Asia’s energy consumption is projected to double in the face of continued rapid economic growth.

The World Bank, the International Monetary Fund and the Asian Development Bank (ADB) all expect the region to continue growing, albeit at a slower pace, in the coming years. All three predict Asia will grow at around 6 percent next year compared with around 2 percent for the global economy.

Despite the dependence on fossil fuels such as coal, Asia is taking clean energy seriously, says Watson Liu, senior partner at global strategy consultants Roland Berger.

“Wind and solar have seen significant growth in installed capacity among major Asian countries while consumption of other clean energy such as gas, hydro and nuclear have also been increasing,” he tells China Daily Asia Weekly.

According to Liu, China and South Korea have seen growth rates of 16 percent and 9 percent respectively in gas consumption.

He says some major Asian countries have established policy and regulation frameworks to encourage clean energy growth, like financial subsidies such as tariff and tax credits.

“Japan, for example, has enacted energy laws to enforce energy industrial structural reform and use of clean energy. It has established procurement quotas for electric utilities to purchase electricity generated by green energy,” he explains.

“It has also offered financial incentives, including low tariffs for electricity from renewable energy and subsidies for solar industry.”

Furthermore, Japan has established policies to support the research and development of green technology, Liu says.

Japan dramatically scaled back its use of nuclear power following the 2011 earthquake and tsunami which resulted in a meltdown at the Fukushima nuclear power plant.

China, meanwhile, put its nuclear power program on hold and ordered a nationwide review of safety at all its nuclear plants.

Despite the investment in clean energy technologies, Asia is still heavily reliant on coal and oil for its energy needs and will continue to do so well into the future, analysts say.

“Improving energy efficiency is a highly cost-effective means to increase energy availability,” says Vinod Thomas, director general of independent evaluation at the ADB.

“This will be vital for Asia, which is set to become the world’s largest energy-consuming region by 2050 — and be most exposed to risks related to energy security and climate,” he tells China Daily Asia Weekly.

“Governments across the region must encourage measures to contain energy consumption and increase the use of all types of clean energy such as wind and solar power.”

Thomas explains that energy efficiency is the least expensive option to increase energy supplies. It is now recognized that a megawatt saved by using energy-efficient industrial equipment costs about half or less than the cost of adding a megawatt of coal-fired generating capacity.

“Energy efficiency measures are among the most inexpensive and profitable options for greenhouse gas abatement,” says Thomas, noting that these include energy-efficient retrofits of existing buildings and industrial equipment.

Industry and buildings accounted for more than 70 percent of all energy use in Asia in 2008, the most recent year for which complete data are available.

Cost is seen by many low-income countries as a barrier to implementing clean energy programs, but Thomas says this does not have to be the case.

“Governments and their development partners can play a vital role in removing barriers to boosting energy efficient investments, such as the poor awareness of readily available energy efficiency options and the perception among banks that these investments are high-risk.”

Although energy consumption and greenhouse gas emissions in Asia’s emerging economies are far below those of developed countries, there are substantial opportunities to improve energy efficiencies in power generation, reduce losses in transmission and distribution, and end-user improvements, according to a recent study by the ADB’s independent evaluation department, which assesses the effectiveness of ADB operations.

With economic activity and income levels in Asia set to rise, the stock of appliances and equipment used in residential, commercial and public buildings is likely to increase significantly.

Comprehensive standards and labeling programs to improve the energy efficiency of appliances and equipment can bring sizable energy savings. Among the key components of a standards and labeling program are setting energy efficiency performance standards for equipment and technical requirements.

Continued improvements in power generation efficiency have been best demonstrated in China through its much-publicized program to construct new coal-fired power plants to feed rising demand, as well as replace small, old and inefficient coal-fired plants built during the past half century. As a result, average coal consumption for power generation has declined.

Frank Clemente, professor emeritus of social science at Penn State University in the US and editor of the International Energy Agency report The Global Value of Coal, said in a commentary recently: “Clean coal is the global path out of poverty for 1.3 billion people who have no electricity.”

“China is the prime example of the benefits of increased electricity from coal. The socioeconomic progress of China over the past several decades is the most important societal achievement of our time — and coal is the cornerstone of that growth,” he said.

Since 1990, coal-based electricity in China has increased 650 percent to over 3,500 billion kilowatt hours.

Discharge of particulate matter per unit of electricity has decreased 97 percent over the past three decades. Since 2005, relative emissions of sulphur dioxide have decreased 64 percent. Given the smaller coal units slated to be retired, desulphurization will soon be in place at virtually every coal plant in China. Relative nitrous oxide emissions decreased 8 percent in the past year alone. And reduced mercury emissions are a significant co-benefit of these new controls.

With these technological innovations, coal in the 21st century will perform even better over time.

There are about 430 gW of advanced coal units online or under construction around the world — and more than 175 gW of these are in China.

Clemente said: “China is already building some of the cleanest power plants in the world along the eastern coast. At Yuhuan, Zhejiang province, for example, China Huaneng Group operates four 1,000 megawatt advanced generating units at a thermal efficiency more than 20 percent better than the global average.

“Such supercritical and ultra-supercritical facilities produce far more power per unit of fuel than traditional plants — and have far fewer emissions.”


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