Clearing the air on Chinese clean energy

“It doesn’t matter what Australia does on climate change because China will just keep polluting regardless.”

It is surprising how often a statement like this turns up in the comments section of a news website or a panel-style TV show when the topic of climate change is raised. The argument is that China feels that it has more important things to worry about as it rapidly industrialises, and there is nothing we can do to force them to change.

Luckily it’s not true. I’ve seen first-hand how much China’s leaders and population care about cleaning up their energy system. And while that’s great news globally, it is also good news for Australian towns and workers who stand to gain from billions of dollars in new investment in wind energy from Chinese investors – if we don’t mess it up.

Recently I presented a session at the enormous China Wind conference in Beijing. It was one of the less smoggy days in the city, but there were several other days that week when the sun was reduced to a hazy glimmer and visibility was down to a few hundred metres.

Many Chinese are extremely concerned about air quality, and it’s not hard to understand why. Pollution readings are often more than 10 times what the World Health Organisation rates as ‘unacceptable’ and the poor air quality has been found to directly cause life-threatening illnesses such as lung cancer. During the 2008 Beijing Olympics, hundreds of factories were shut down to temporarily preserve the city’s air quality, but this is obviously not a long-term fix.  

Something had to give. China has set ambitious clean energy targets, has started to embrace energy efficiency and is considering introducing a price on carbon and a tax on coal mining as a way to reduce its reliance on coal-fired power.

On clean energy, China is building wind farms at a rate we Australians can barely get our heads around. According to the Global Wind Energy Council, last year China installed more than four times the amount of wind power we have in our entire country. In fact China’s total installed wind capacity is almost 30 times what we have here. And Australia’s 62 operating wind farms last year produced enough power for the equivalent of more than a million homes.

Wind turbine technology continues to improve and the Chinese are one of the countries driving the evolution of larger turbines and new offshore models. Sinovel installed China's first 6 megawatt prototype wind turbine two years ago, which can generate twice as much power as the largest onshore wind turbines in Australia. And, according to Sinovel’s vice president and technical director, a new 10 MW turbine design is nearly complete with funding from China's Ministry of Science and Technology. All this investment and development will have these machines export-ready in the short- or medium-term.

The rapid expansion of wind power in China has run into problems plugging into the grid in some areas. The windiest regions are in the sparsely-populated north and north-east, where the transmission lines are few and far between. The quality of the grid connection in these areas means that on very windy days, not all of the power generated by the wind farms can be put into the grid, and some is wasted. Although this is being worked on, it’s a serious issue and will take time.  

While the domestic market settles, China is extremely interested in investing in other countries such as Australia. On our visit to China, the Clean Energy Council met with huge equity investors like Guohua who own a majority stake in the Musselroe wind farm in Tasmania, and Trina Solar, one of the largest solar companies in the world.

The message from these huge players was always the same: When will Australian wind energy policy stabilise so that we can invest confidently? These financiers have the money and they’re ready to build and buy projects, but not while our Renewable Energy Target seems constantly under review. The acrimonious debate on the carbon price has also put off a lot of companies who see it as indicative of a wider attitude towards renewable energy.

Let’s clear the air here – wind power is just one small part of what China is doing to reduce both pollution and emissions, but they’re doing it fast and they’re doing it on a huge scale, with a goal of improving the quality of life of its citizens. They’re also keen to spread their successes globally, with new technology coming online and plenty of finances ready for those markets which can guarantee a stable investment environment.

Alicia Webb is a senior policy advisor at the Clean Energy Council.

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Could the explain why we need Chinese investment to build wind farms here ? Is it because we have no funds to invest, or not viable according to local metrics. Please provide the rate of growth of wind power in China so we can 'get our heads around it'.

Leaving aside the issue of evil, Abbott's Noalition is working hard to destroy exactly the wide range of specialist bodies that are essential to turning the potential and the complexities of the 21st Century to our advantage.

We are all aware of many inventions that have gone overseas because there was no support for promotion here. we are equally aware of how ignorant we are of so much about Australia's land, sea and maritime environment, an ignorance Abbott's cuts (building as they do on those of Krudd) can only magnify.

Business Spectator and other publications repeatedly emphasise the need for investment, while avoiding the gross failure of the domestic finance market to provide. Dr Peter Brain, for instance, emphasised twenty years ago that market failures (which by definition continue) strongly justified a government Manufacturing Investment Bank. Superannuation investment is essentially in the housing and stock market casinos; indeed, the extent of SMSF speculation in that regard is now officially a cause for concern.

NBN Co had all sorts of problems precisely because its Board accepted the Rabid Right nonsense that a good job can be expected of a motley crew of poorly-paid contractors.

Yet here we have ARENA – and CEFC - two promising and certainly useful organisations being destroyed precisely because their success would be an ideological embarrassment. ARENA will be left to run its current programmes with a third of the money it had originally had available to support new projects. CEFC - which would certainly lend to build wind farms - is to be destroyed completely as soon as the Senate allows.

China had around 450MW wind farms in 2002, and this figure by the end of 2012 was 60830MW--- about 5.3% of the nation's total power generation capacity.

'The acrimonious debate on the carbon price has also put off a lot of companies who see it as indicative of a wider attitude towards renewable energy."

Exactly why GM Holden decided to pull the pin, and why Toyota and the car industry will be following.

Holden’s departure is a deliberate public policy aim by the Abbott government, destruction of motor vehicle industry unions through destruction of the industry being part of its wider policy of class warfare. Hockey et al put pressure on GM senior management in the way most likely to ensure that result.

As with the vilification of Prime Minister Gillard's Labor government, and the depiction of it as dysfunctional, the mainstream media - not only the duplicity of ideologues at The Australian - lets the Noalition get away with heaps. It should be very very easy to imagine the frenzy of headlines had GMH's demolition been done by Prime Minister Gillard instead of Hockey.

Why don't the clean energy wannabe providers go direct to the superannuation funds and give them a percentage of the action just for providing the cash, as well as the normal return on investment??
No government required. The infrastructure created would truly be Australian owned and the money stays here.

Some articles you read and read again and just don't know where to start to make comment as the basis, the logic, the rationale, the data is enmeshed in a such a manner it provides a circular argument of irrelevance and often hides pertinent facts that could distort the circular argument. Reminds of the evangelistic religious sects of the 1970's.

Right now coal is our main source of power generation whether we like it or not, in fact in excess of 40%. To develop alternatives is fine but until they are proven beyond any doubt that they can support a base load and handle short start up times for peak periods then they will always be marginal, or localised options. Those that consider it already has aren't facing the real truth about testing tolerances, it can't and doesn't.

For the anti-fossil fuel community, of which there are many different flavours of them, your alternatives to date do not provide commercial robustness needed to support the economy at large. What you really seek is not a new energy source but a shifting of the power base away from the existing wholesale generators and infrastructure owners to a more self-interest approach. By the way this rationale you apply is diametrically opposed to what many of the same persons seek from the NBN - a national based superfast, instantaneous electronic world delivered to the door, by somebody else, for free.

Wind farms are fine so long as the animal rights can be guaranteed no annihilation of migratory patterns of birds that have been using the same pathways for centuries. Air movement disruption is a rather selective debate but try being close to one when it is running is not exactly the most peaceful event.

Solar panels that use hard to find and expensive REO and REE's that need to be mined or even artificial polymers that don't break down for extended periods when dumped. The same applies to the batteries in electric cars for that matter.

Geothermal development is fine if you like playing with the acquifers and competing with the mining industry and their desire to frack anything under our feet.

Tidal and hydro in this country is limited from two dimensions, hydro in that we have optimised this to maximum as it is without compromising other industries, including irrigation farming. Tidal needs body of movement and the Kimberley's is often touted but its proximity reduces the value to low and personally I would rather the Kimberley's be preserved for what it is - that's me being an extreme environmentalist.

All of these "alternatives" are not able to provide the scale necessary for this country. What they can do is provide localised power where it is needed as either a supplement, backup or emergency at best. Certainly a better source than diesel.

One area we do miss out on is biomass and there is a US company that does this well and does it within containerised type units. It can also use other fuels types. Whilst we were all bleating about how nasty we are using such grubby fossil fuels and writing "white papers" on how effective alternatives are and presenting at trendy forums with cheesy smiles and voracious arguments of hard to verify facts this company just got on with it on a small and medium scale. http://www.capstoneturbine.com/

Wind and gas power generation platforms come from primarily General Electric (GE) and most investors should be aware of GE's track record of social and environmental responsibility.

So a suggestion to all those naïve creatures out there who see the world as a loving place where harmony takes precedence over economic security look at the trade offs for all energy types and you will find why we are where we are today. So stop wasting coal generated electrons and acid bathed paper to say how bad everyone else is whilst failing basic research and analytics.

Your first step might be to try and get all ASX listed companies use triple bottom line reporting. Then you will have the basis for some solid data of relevance and can start to build a case for alternatives. In the meantime offer your time, for free, to those local companies that are exploring and experimenting with possibilities for the future that might make a difference.

If you really want a safe, high efficiency power generator than can be harnessed try Thorium, but this one will be beyond most readers.

macallan@bigpond.net.au
0419 504 255

The linked chart gives the clue to Australia's future energy:
http://solargis.info/doc/_pics/freemaps/1000px/ghi/SolarGIS-Solar-map-Wo...
The country enjoys unparalleled solar radiation for any populated place on earth. This is the ultimate nuclear energy - clean fusion with no high consequence risks.

Solar panels retail for 90centrs/W and high efficiency lithium batteries cost 30cents/Wh of storage. Actual manufacturing costs are approximately half this. Combined they give an investment return of around 10% against current electricity tariffs in Australia.

Why rely on central generation, expensive distribution, inordinately complex marketing, complex metering and billing systems with their inevitable disputes resolution plus taxing at every transaction when it is possible to collect and use the solar radiation that arrives at your rooftop in abundance every day.

With the rapid uptake of solar in Australia the power supplies really have no idea how much power is being used because most solar used internally is unmetered.

Most homes used to have wired telephones. Many now use wireless connection. It is only a matter of time for the number of people relying solely solar power in Australia to swell to be the majority. Those left connected to the grid will be paying an ever increasing portion of the high costs involved.

Rick et al,

Industry will still be connected to and highly dependent on the national electricity grid. Not just single phase for home appliances either.

Obviously they are not important in a self interested world where everything stops at one's doorstep and the rest we can buy from overseas online via the upcoming national communications grid of course.

No wonder Australia is going down hill with such forward project like thinking.

macallan@bigpond.net.au
0419 504 255

Industries have a large range of options open to them for power supply including solar. Industrial parks elsewhere in the world have their own generation plant and make use of waste heating for process heating. There is growing use of Cogeneration plant in Australia since the State monopolies on power transmission were overcome in the 1990s. The Ravensthorpe nickel plant uses heat from burning sulphur to produce electricity. The resultant SO2 is used for acid making that is consumed in the process.

Aluminium smelters in Australia have become uncompetitive due to the rising price of electricity. To be viable they need to control the production of electricity as is done in other locations that have viable plants. Many of the Canadian smelters reduce production of aluminium so they can sell their hydro produced electricity into the North American grid if they have a grid tie. They can make more money selling power than making aluminium.

Whether there is any sense in retaining a grid in Australia is something that really needs investigation. Power reticulation into new residential subdivisions should not be standard practice. The savings would contribute to lower development costs, reducing the price of land enabling new home buyers to invest in roof top solar. This is all economically viable now.

Rick,

I don't know your background or interest or knowledge in this area so hard to assess your interest here or depth of knowledge. My interest is a pure economic one from a country's productive output self interest one in an intense global market where the "playing field" is not level and the playing is not exactly fair. It is harsh and brutal and we are in an economic war where what we do and how we do it will determine our survival.

I don't know anything about the Ravensthorpe Nickel operation other than what I have found online. It is a pity it got sold offshore and BHP took a hit it seems on the development cost. Maybe BHP didn't find it profitable so maybe it was the price of nickel then or maybe they have a higher NPV target or something else but its self generating power would certainly not be the primary reason, maybe a small cost reduction contributor at best. Although as a one off example perhaps it does have merit and it is good to see it using ISO 14000 family of environmental standards even if the mine does end up being closed because it is economically unprofitable but environmentally wonderful (sarcasm inserted).

I do question some of the methods for sustainability, like the effort and power source to ship seawater that distance to use some other power source to refine the saltwater so to have water that can be heated to generate steam to drive a turbine to produce electricity. Also the plant is a partial process plant as the nickel is shipped elsewhere for further processing so the power consumption is light as a result.

Philosophically it is all very nice but economically it isn't sustainable and if closed will leave an open mine next to a medium national park, mining waste, unusable infrastructure and tailings.

As for the whether Australia has a national grid is a good question, perhaps it needs to be state based with a single interchange for emergency purposes only. But rest assured there does need to be some sort of grid from a business continuity and operational risk perspective and self generating doesn't cut it, yet. It needs substantial more R&D. The next wave is, I believe, will be LNG, then maybe something else of wholesale scale. LNG has more by-products potential and R&D opportunity than any other natural energy source outside of radio-active elements, my favourite being Thorium.

macallan@bigpond.net.au
0419 504 255

P.S. I hate using a small comment box for long comments, I usually get the spelling or grammar or something else wrong.