POWER July 2010 - 41

POWER IN CHINA
through federal certification processes, at
least four Westinghouse AP1000 reactors are
currently being built at Sanmen and at Haiyang.
At least eight more are being planned
after them, involving substantial technology
transfer, with about 30 more proposed to follow.
China is expected to own the intellectual
property rights for those designs, which
could mean, as the World Nuclear Association
concludes, that the AP1000 is to be the
main basis of the country's move to Generation
III technologies.
This type of " technology diffusion " is a
positive aspect of technology transfer, and
it could bode well for addressing climatechange
mitigation, suggests an August 2009
study from nonprofit and nonpartisan research
group Resources for the Future. That
study separately evaluated the diffusion and
deployment of supercritical and ultrasupercritical
and natural gas combined-cycle technologies
as licensed to Chinese equipment
makers Harbin, Shanghai, and Dongfang. It
found that among 713 supercritical and ultrasupercritical
plants planned, constructed,
or operated in the world in 2008, 38% were
in China. And in 2006, combined-cycle plant
operating capacity was about 10 GW, while
capacity in planning or construction was 21.8
GW. Existing units made in China even exceeded
those manufactured in Japan or Europe,
it found.
Moreover, it said, even if Chinese manufacturing
companies imported key components
from foreign firms, construction costs
for supercritical plants per kilowatt-hour
were about 20% of costs in Japan, while
combined-cycle costs were 25% of those
in Japan. The group noted, though, that the
comparison does not adequately reflect the
differences in specifications for environmental
equipment: " If Chinese power plants were
required to satisfy as stringent environmental
standards as Japanese plants do, construction
costs in China would be much greater. "
One negative impact of technology transfer
is that quality may be sacrificed in some
cases, the study found. But even this could
change, according to Resources for the Future,
as Chinese manufacturers " trade up " to
maintain export markets and to satisfy higher
quality standards set by other governments.
Finally, it adds that intellectual property rights
will not likely be a barrier for technology
transfer. The study suggests that license fees
could cause price increases, but " price reduction
by local production has been so steep that
it seems the price increment by licensing is
almost canceled out. "
How to Fuel China's Growth?
China is the largest consumer and producer
of coal in the world, holding an estimated
114.5 billion short tons of recoverable coal
July 2010 | POWER
reserves-the third-largest in the world, after
the U.S. and Russia. Deposits are spread out
over small and large coal mines in 27 provinces,
with northern China, especially Shanxi
Province, holding most of the easily accessible
coal. Coal in the southern provinces tends
to be higher in sulfur and ash. In 2008, China
consumed an estimated 3 billion short tons of
coal, representing about 40% of the world's
total-and a 129% increase since 2000. According
to the EIA, coal consumption-split
between the non-electricity and power sectors-has
been on the rise in China over the
past eight years.
But plagued by transportation issues, typhoons,
and widespread pit closures, the
sector frequently has to deal with an unreliable
coal supply. Shortages often strike provinces
in the winter, resulting in blackouts or
brownouts. In January 2010, for example,
five provinces suffered rationing during cold
weather-Shanxi, Shandong, Henan, Hubei,
and Chongqing-forcing governments to
move local populations to " safer " places.
To alleviate its predicament, the Chinese
government promotes two remedies: encouraging
energy conservation efforts and expanding
energy supply capacity. China has primarily
relied on domestic energy resources to develop
its economy, and the rate of self-sufficiency
has been above 90%-much higher than that
in most developed countries. Increasingly keen
to keep more of its coal at home, the government
has also been considering importing to
protect domestic supplies. In 2009, for example,
coal imports (primarily from Vietnam
and Australia) jumped to 130 million mt, 2.1
times the amount imported a year earlier, with
the average price being $84 per mt.
Beijing takes a similar approach with uranium-a
commodity whose importance has
shot up in recent years. This January, China
imported roughly 3,337 mt of uranium, with
57% coming from Kazakhstan and smaller
volumes from Russia, Namibia, and Uzbekistan.
In March it set its sights on Australian
yellowcake stocks. Import volumes were up
more than 10 times year-over-year. Yet, government
officials suggest this may be the tip
of the iceberg: State-run Guangdong Nuclear
Power's annual uranium needs will jump to
10,000 mt in 2020 from 2,000 mt in 2009, as
Zhou Zhenxing, chairman of the company's
uranium-supply unit, told The Wall Street
Journal in November.
The Emissions Spin
Two weeks before the Copenhagen climate
summit last December, China unveiled its first
firm goal for limiting greenhouse gas emissions.
Beijing said it would aim to reduce its
" carbon intensity " -or the amount of CO2
emitted for each unit of GDP-by 40% to
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45% by 2020, as compared to 2005 levels. Observers
hailed the target as ambitious, though
many pointed out that meant that China's carbon
emissions would not necessarily fall.
Many noted that the country could meet the
target by either using energy more efficiently
or increasing the proportion of energy derived
from low-carbon sources such as wind and nuclear.
It could also, however, produce goods of
higher value without changing the nature of energy
production and use-that is, it could raise
GDP while leaving emissions unchanged.
But in China, the target-any target-is
deemed costly. Organizations like the Chinese
Academy of Social Sciences and Tsinghua
University, after drawing up scenarios and evaluating
what could happen if China set a goal of
reducing carbon emissions by 33%, 40%, 45%,
or 50% in 2020 compared to 2005 levels, said
that the country would need to increase its investment
by $30 billion in the next 10 years. In
particular, they found that any target over 40%
would cause costs to sharply increase.
Meanwhile, officials argue that economic
development will continue to be a priority
for the nation peopled by nearly 1.3 billion.
As Su Wei, director of the NDRC's climate
change department, told attendees at the International
Cooperative Conference on Green
Economy and Climate Change this May, the
" high carbon " characteristic rooted in China's
energy infrastructure would not be fundamentally
changed in the short term, as the
development and use of clean energy sources
such as wind and solar power started late in
China. An unreasonable industrial structure
and relatively backward industry technology
also made the nation's carbon emissions reduction
drive difficult, he said.
Nevertheless, besides setting up an accountability
system for energy conservation and
emissions reduction, and investing more in
new energy industries, China has been improving
policies related to low-carbon development,
accelerating research on low-carbon and
environmentally friendly technologies, and
expanding international cooperation to contain
emissions in some key sectors, he said.
" I personally think the emissions reduction
goal China just released is a little high, " Pan
Jiahua, director of the Urban Development
and Environment Institute under the Chinese
Academy of Social Sciences and member of
the State Climate Change Expert Committee,
told The People's Daily this December.
This official noted, as have many others, that
China's average carbon emissions per capita
had reached the world's average of about 5
tons-but was still about a fourth that of the
U.S. level. " However, since China has made
a commitment to the world, we must try our
best to realize the goal, " he said. ■
-Sonal Patel is POWER's senior writer.
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