2014 - The Year In Energy

[cirr]

12/31/2014

2014 - The Year In Energy

The year 2014, ending today, saw a lot of exciting, and horrible, things happen in the energy world:

- OPEC’s battle with the United States produced the lowest gasoline prices since 2009 (Brookings)

- Tesla CEO Elon Musk announced in September plans to construct a “Giga factory” in Nevada to pump out lithium-ion car batteries at a rate unheard of in history

- Premature closures of nuclear power plants and distorted power markets have made long-term power planning difficult (Nuclear Matters)

- The first commercial coal plant with carbon capture and storage went online in Saskatchewan (MIT)

- New York banned hydrofracking for natural gas

China’s largest shale gas and shale oil basins. China has over four quadrillion cubic feet of natural gas reserves that exceed even those in the U.S. Source: ARI 2013

- The Keystone XL pipeline still went nowhere

- MIT announced a battery that is non-toxic, can be recharged in 2 minutes and will last for 20 years

- Fossil -fuel subsidies were more than four-times those to renewable energy

- Russian aggression has caused Europe to rethink future gas and energy supplies

- Coal continued to be the fastest growing energy source in the world, and

- 2014 will surpass 2010 as the warmest year since record-keeping began in 1880

But despite all of these notable developments, one country stood out this year in the energy world – China. China has embarked on the biggest energy expansion in world history. All energy sources in China are growing and China is diversifying its energy mix like no other country in the world. 2014 provided some clues to what this might mean:

- China is the world’s largest producer of wind and solar power, installing 70 GW of solar in just two months earlier this year

- China has over four quadrillion cubic feet of natural gas reserves exceeding even those in the United States (EIA/ARI; see figure)

- China signed a $400 billion natural gas deal for Russia to provide China with 1.3 Tcf of natural gas per year for the next 30 years

- China is expanding gas pipelines like crazy, is expanding unconventional fossil fuels with fracking, is developing a behemoth coal-to-gas project in Inner Mongolia, and is building the largest LNG infrastructure in the world

- China uses more coal than any other country in the world, in fact, about as much as the rest of the world combined (EIA)

- China produces more coal than any other country in the world

- China just became the largest importer of oil in the world

- Chinese refinery capacity is steadily growing

- China is poised to be the world leader in nuclear energy in all ways; in the number of reactors in the country, in exporting the technology to other countries, and in industrial cooperation with other world nuclear leaders (Rumania; Argentina; Jinping; NextBigFuture; Chinese Academy; WNA)

- China began construction of its first high-temperature gas-cooled nuclear reactor (Chinese HTR) in April, and their new fast nuclear reactor went to full power right before Christmas (we don’t have either one)

- China is steadily firing up new nuclear reactors (Both Fangjiashan reactors go critical) and will begin construction of a new nuclear reactor every three weeks on average for the next few decades (WNA; see figure)

China’s new sodium-cooled fast-reactor nuclear power plant was up and running at full capacity just before Christmas. Like all fast-reactors, the CEFR burns U-238 as well as U-235, so obtains about ten times as much energy as normal reactors, dramatically reducing both the amount of nuclear waste produced as well as the length of time it is radioactive. Source: Nuclear Street

- In May, China National Nuclear Power filed for a $2.6 billion IPO, one of the largest Chinese IPOs in recent years

- Canada and China signed a Memorandum of Understanding and a Framework Joint Venture Agreement on nuclear energy projects, particularly to build Advanced Fuel CANDU Reactors in China and then globally (CANDU Energy)

- the UK and China signed two agreements this year to build Chinese-designed nuclear reactors in the UK as well as enabling Chinese companies to invest in nuclear power plant projects. China may also build the UK a high-speed rail system (The Telegraph)

- China and Lockheed Martin opened a new joint nuclear research and development facility in June in Fort Worth, Texas (World Nuclear News)

China’s nuclear energy capability is on track to triple by 2018 and increase five-fold by 2030, which will make China the largest nuclear nation in the world. New nuclear construction starts every three weeks. Source: Research Institute of Tepia (updated)

- China has budgeted almost a trillion dollars over the next two decades to build the most sophisticated electrical grid in the world

- China has been working on the biggest water diversion project in history, and when completed, will be one of the world’s greatest engineering feats (China’s Huge Water Project) annually moving the same amount of water as the entire Yellow River.

- China is strategically investing in Africa more than any other country, reflected in its annual trade of over $200 dollars (Brookings)

- China has passed the U.S. in electricity generation

- China passed the U.S. in carbon emissions

- China signed an historic agreement with the U.S. on climate change (Brookings)

China adopted its twelfth Five-Year Plan three years ago in 2011 (China’s Five-Year Plan) and its next Five-Year Plan is coming up in 2016. This is important because, unlike the U.S. and Europe, China tends to meet almost all of the objectives in its Five-Year Plans, a distinct advantage of an authoritarian government.

China’s energy policies have little to do with climate change, they don’t particularly care. They care about their country’s rising middle class, its burgeoning position as the global leader in manufacturing, and the national security of a diverse and reliable energy mix.

Coal was simply the easiest and quickest way to get enough energy to enter the world’s exclusive top economic club. But the health issues that go along with massive coal use have pushed China to bring up alternatives even faster than it did with coal.

Which is pretty fast. China built almost 600 coal-fired power plants in only 18 years beginning in 1992. This was the largest energy expansion in history, and moved 500 million Chinese into the middle-class. Since a country’s economic and military strength derives directly from the absolute number of middle class citizens in its population, this began a new world economic order.

China’s new energy expansion will be even bigger, and is meant to bring its other 800 million people into the middle class. Bringing this many people into the middle class, and keeping them there, will take more infrastructure building than at any time in the history of civilization.

Barring some bizarre event, this will happen before mid-century.

But well before that point, China’s GDP will become number one, their conventional military will be enormous, and their dominance of Asia and the Pacific will be uncontested.

The United States needs to prepare for this new reality. We have time. After all, 2015 is just beginning.

Have a Happy New Year!

2014 - The Year In Energy - Forbes

 

[cirr]

Guest post: China as a model renewable energy economy

Guest writer | Dec 31 2014 13:40 |

By Li Hejun, China New Energy Chamber of Commerce and Hanergy Holding Group

Almost 200 governments met in Peru this month to hammer out a first draft of a global deal to cut emissions, ahead of a new round of climate talks next year in Paris. If the world is to arrest climate change, global economies need to embrace renewable energy. Those looking for a model of how this might be done should consider a possibly surprising source: China.

It has been little noticed by the outside world, but in China a technological revolution that will result in huge gains in efficiency and new applications for renewable energy has already begun.

Many in the West are sceptical of China’s commitment to renewable energy. This scepticism has been especially evident following the recent agreement by China and the United States to address climate change. As part of this agreement, the United States has promised that by 2025 its emissions will be at least 26 per cent lower than they were two decades earlier. Meanwhile, China has pledged to boost its share of renewable energy from the current 8 per cent to 20 per cent by 2030 in order to allow emissions to peak that same year. The agreement has been dismissed by critics as a “non-binding charade”. They point to the fact that China builds a new coal-fired power station every 10 days.

It is true that meeting China’s renewable-energy goals will not be easy. Over the next 15 years, the International Renewable Energy Association predicts that China will have to invest $145bn in zero-emissions energy each year to add the 800-1,000 GW of new generating capacity needed to meet its targets. That is nearly equivalent to all of its current coal-fired capacity and almost as much as total installed capacity in the US energy sector today.

But China’s renewable energy goals are not simply hot air. The country’s leadership recognises that China must break its dependency on coal if it is to satisfy the surging power demands of a growing middle class and an expanding economy without blanketing the country in smog. China’s renewable energy goals are also necessary for the country’s long-term energy security. Neither coal, shale gas nor any other fossil fuel can secure our energy future.

The sceptics have also missed the fact that China’s 2030 goals do not mark a radical departure from existing policy, but build on existing foundations. In 2013, China was the world’s top investor in renewable energy. It also leads the world in hydropower capacity, wind power capacity, and in 2013 it surpassed Germany to lead the world in new solar power installations.

The new goals will trigger a huge investment push towards renewables. The scale of the new generating capacity to be installed in the next decade will reshape China’s renewable energy market, weeding out weak companies as the government gradually phases out subsidies, and driving gains in efficiency and technological innovation as the remaining industry players compete for market share.

I believe that solar will be at the forefront of this technological advance. Solar energy is fast becoming more affordable. The cost for solar power generation is now 50 per cent lower than it was three years ago. China’s cost of solar power generation has fallen to below Rmb1 per kWh and if we continue that trend, I predict that within 3-5 years the generation cost of solar cells will approach that of coal-fired power.

Even more exciting than falling costs are the new ways in which China will use and transmit power. China is now intent on developing a distributed power grid that will rely on the interconnection of thousands of rooftop and building-integrated solar installations generating power close to the point of consumption. This is a drastic departure from the current centralised power system that relies on goliath, coal-burning power plants and costly, inefficient power transmission over hundreds, or even thousands of kilometres. This new, smart grid will help eliminate pollution, slash costs, and increase reliability.

In addition to making the distributed grid possible, new forms of solar technology are ushering in an era of mobile energy in which customers can take power with them wherever they go.

At present, around 90 per cent of the world’s solar power output is geared towards first-generation crystalline silicon panels, which for a long time were the most efficient technology available. But traditional silicon panels are hard, opaque and heavy, while thin film solar technology can be can be lightweight, flexible, and translucent, making it ideal for a wide variety of applications, from curved automobile rooftops and building integration to consumer clothing and portable power stations.

In recent years, thin-film technology has caught up with, and even surpassed, crystalline silicon in terms of both conversion efficiency and cost. Furthermore, producing thin-film cells requires just a fraction of the material and energy necessary to make crystalline silicon, conserving resources, cutting costs, and reducing pollution.

In the coming years, technologies will continue to improve, and prices will continue to fall. Two of the most promising technologies now are solar cells made from CIGS (Copper, Indium, Gallium, Selenide) and those from GaAs (Gallium-Arsenide), with maximum conversion efficiencies topping 20 percent, and 30 percent, respectively. As these are further developed and brought to market on a mass scale, solar panels will transform into something capable of being integrated into nearly every fabric, product, and structure at a reasonable cost.

I believe that China will be the country that leads this technological revolution because China now has not only the production capacity, but the capital, talent, and political support to make it happen.

Over the past two years, Hanergy has acquired US and German companies with cutting edge thin-film technology and is now exploring the best ways to bring it to scale. There are hurdles to overcome. Building a sustainable production capacity will take a substantial upfront investment in core resources and manufacturing equipment but the investment will pay off. At Hanergy, American, European and Chinese scientists are working together to find imaginative ways to integrate and optimise solar technology from around the globe.

Every important industrial revolution has actually been an energy revolution or an energy substitution, first with coal for wood, then oil for coal, and now clean energy for traditional fossil fuels. This third revolution is not a competition for resources, but a race to master core technologies. I think that China will lead the world to a brighter, cleaner future.

Li Hejun is Director of the China New Energy Chamber of Commerce, and CEO of multinational clean energy company Hanergy Holding Group.

 

[Edison Chen]

Coal use for industrial consumption is gradually coming down these years, too bad for the environment. The "new norm" requires clean energy to replace the traditional resources.

 

[terranMarine]

Coal use for industrial consumption is gradually coming down these years, too bad for the environment. The "new norm" requires clean energy to replace the traditional resources.

That's great, this kind of policy must be pursued in order to save the environment and improve public health.
By the way the French made some intriguing silent wind tree turbines, perhaps it could become useful in China.

 

[Edison Chen]

That's great, this kind of policy must be pursued in order to save the environment and improve public health.
By the way the French made some intriguing silent wind tree turbines, perhaps it could become useful in China.

Yeah, the carrying capacity of the environment will come to the upper limit in many places in China soon, demand for new energy is urgent. Not only for environment, but for the economy as well. Usually only the companies with low industrial output producing raw materials requires outdated resources, to limit the use of these resources will push these companies to explore for new profit growth point, or close down. China should introduce this silent wind tree turbine or any other thing equivalent if possible.