Not all biofuels are created equal: in fact, depending on how they are produced, biofuels like ethanol and biodiesel can be environmentally destructive, raise the price of food, and even hurt efforts to tackle global warming.
Biofuels - ethanol and biodiesel - present a potentially important (partial) solution to concerns about global warming and our over-reliance on oil. However, to paraphrase a great LA Times op ed on the ethanol craze, alcohol is best enjoyed in moderation, and the same goes for these alcohol-based biofuels.
So before we all get drunk on ethanol, we'd better take a close look at the benefits and potential drawbacks of biofuels and make sure we get it right.
The Benefits - In Pursuit of Energy Independence and a Safe Climate
Biofuels offer the potential to displace foreign oil and depleting fossil fuels with a more sustainable and domestic fuel while reducing greenhouse gas emissions.
Still, depending on how they are produced, ethanol and biodiesel require considerable fossil fuel inputs - diesel for tractors, natural gas for fertilizers, fuel to transport the feedstocks, and typically fossil fuels to produce the biofuels at a biorefinery. So while the biofuel itself may be made from renewable crops and contains only carbon that was absorbed from the atmosphere during the growth of the plants, the total net benefit of biofuels after taking into account inputs is far from carbon neutral nor fossil fuel free.
Exactly how much net benefit there is to biofuels depends largely on the production methods and feedstocks and has been the subject of much debate. While some have repeatedly made the case that conventional biofuels - corn-based ethanol and soy or rapeseed-based biodiesel - take even more fossil fuels to produce than the offset, the consensus has been that conventional biofuels offer a moderate reduction in fossil energy use and greenhouse gas emissions - on the order of a 10-30% reduction when compared to conventional petroleum-based gasoline and diesel.
Next-generation biofuels produced from cellulosic feedstocks - a fancy term for a wide variety of generally inedible plant matter including wood, straw, and grasses as well as agricultural wastes like corn stalks and rice hulls - are an exciting prospect and could maximize the potential for biofuels to offset oil and fossil fuel use and greenhouse gas emissions.
Making ethanol or biodiesel from cellulosic feedstocks can be a much more energy efficient process than conventional corn or soy-based biofuels, can be made from inedible crops and even agriculture, forestry, or urban waste materials.
However, next-generation, cellulosic biofuels are currently in the early stages of commercialization. The first pilot and commercial scale cellulosic biofuel refineries are under construction or on the drawing boards these days and how long it will take to fully scale up and commercialize the emerging biofuel technology remains to be seen.
Up in Smoke - How Slash and Burn Agriculture Wipes Out the Climate Benefits of Biofuels
Land use changes - most notably the loss of tropical forests - account for about 20 percent of total global greenhouse gas emissions - roughly the same as both the total annual emissions from the United States or China.
That's right: slash and burn agriculture can be just as large a threat to the climate as China's rampantly growing economy or the hundreds of millions of cars plying American highways!
So if we're going to start replacing oil with biofuels, we'd better not be trading one problem - rampant oil consumption - for another equally devastating problem - accelerating the conversion of tropical rainforests into farm and grazing lands.
Unfortunately, that's exactly what we're beginning to see, with massive swaths of tropical forests, savannas and grasslands - all productive carbon 'sinks' - being slahed, burned and replaced by biofuels plantations. Massive expansions of palm oil plantations in Malaysia and Indonesia, soy and sugar plantations in Brazil, and jatropha plantations in China's forested Southeast have all been proposed to feed the growing global demand for biofuels.
Slashing massive swaths of forests to clear the way for biofuel plantations clearly amounts to a devastating ecological loss. These tropical and semi-tropical forests are some of the most biologically-diverse habitats in the world and have already been devastated by traditional timber and agricultural demands. It's no wonder the Worldwatch Institute has called China's biofuels expansion "an ecological disaster," and the same can be said for similar biofuel expansion plans across the world.
But even beyond the massive loss of biodiversity and habitat when forests are converted to biofuel plantations, the destruction of these forestlands also wipes out any global warming benefits of biofuels.
According to a new study published in Science last week ($ub req., see this New Scientist summary) the climate benefits of ethanol and biodiesel are completely wiped out by tropical deforestation.
When you destroy forestlands, grasslands, savannas and other wilderness, much of the carbon stored in the ecosystem's living matter ends up in the atmosphere - burned, decomposed or otherwise oxidized. Additionally, forestlands represent an important carbon sink, 'breathing' carbon dioxide out of the atmosphere and storing it as trees and other plants grow.
The loss of these important natural carbon 'scrubbers' more than makes up for the moderate reductions in greenhouse gas emissions from burning biofuels instead of gasoline or diesel: according to the study, it would take up to a century for the benefits of biofuels to recoup the initial loss of the tropical forestland and the emissions associated with slashing and burning the land to make way for biofuel plantations!
"We cannot afford that, in terms of climate change," says Renton Righelato, co-author of the new study.
Furthermore, the study concludes that the climate benefits of biofuels are trumped by reforestation efforts, even in temperate climates. "You get far more carbon sequestered by planting forests than you avoid emissions by producing biofuels on the same land," says Righelato.
The study's authors found that reforestation would store and sequester between two and nine times as much carbon over 30 years than would be saved by burning biofuels produced on the same amount of land instead of gasoline (see bar chart below).
[Graphic: the carbon savings from burning biofuels instead of gasoline (top six bars) compared to the carbon emissions resulting from clearing tropical forestland for biofuel plantations (red bar) and the carbon savings from reforestation efforts (bottom three bars). Figures are expressed as metric tons of carbon equivalent saved or emitted per acre devoted to biofuel production or reforestation. (Source: New Scientist)]
No Free Lunch When Fuel Competes with Food
We all know the old adage: there's no such thing as a free lunch. Well, when fuel competes with food, everyone's lunch gets more expensive (as the LA Times accurately observes).
The vast bulk of global biofuels production utilizes edible feedstocks like corn and soy. As demand for corn to make ethanol has soared, corn prices have shot up, nearly doubling in the past year. Record high prices are encouraging a record acreage of corn planted in the United States - the highest in 63 years - and prices for other foods are on the rise as farmers plant corn in acreage they have otherwise planted wheat or soy.
Prices for all kinds of food have soared in the first half of 2007 (see chart below) and the LA Times op ed reports that grocery-store food prices rose 8%. It's unknown how much of that hike is attributable to corn, and rising fuel and fertilizer costs are certainly a major factor in rising food prices, but soaring demand for corn for ethanol production is certainly playing a significant role as well.
[Graphic: Food prices on the rise in 2007. (Source: McClatchy Newspapers)]
Middle class Americans may be able to shrug off higher prices at the grocery store, but increasing food costs hit lower income folks harder.
And if low-income Americans are feeling the crunch, things are even harder in the developing world. When you get buy on just a few dollars a day, doubling corn prices are no small matter. Rising corn prices have already launched public outcry and even riots in Mexico, which depends on imported American corn for tortillas and other affordable, nutritious stables.
Producing biofuels from inedible cellulosic feedstocks could provide a solution to this fuel-or-food dilemma, although producing energy crops like switchgrass - an excellent biofuel feedstock and native North American grass that once dominated much of the Great Plains - on limited agricultural land could continue the competition between biofuels and foodstuffs.
Clean Green Fuels? - Other Environmental Effects
Industrial farming to produce biofuel feedstocks, particularly corn, consumes large amounts of water and chemical fertilizers, herbicides and pesticides. Many of these chemicals seep into waterways, polluting the water and providing nutrients for algae blooms that suck up all the oxygen and kill everything else. A 'dead zone' the size of Connecticut and Delaware put together has repeatedly formed in the Gulf of Mexico, caused by algae gorging on chemical fertilizers carried into the Gulf by the Mississippi river.
Additionally, farmers ordinarily rotate crops annually to avoid soil exhaustion, but high corn prices encourage them to plant corn in the same fields year after year. This high-intensity farming accelerates the loss of topsoil and depletes soil nutrients and the only way to make this work is to pour on more fertilizers, further exacerbating problems.
Finally, while ethanol may be "cleaner burning" when it comes to many pollutants and is a better fuel additive or "oxygenate" than toxic MTBE, burning ethanol in high concentrations could increase certain air pollutants. A recent Stanford University study argued that E85 - a blend of 85% ethanol and 15% gasoline - produces so much ozone, a key ingredient in smog, that if it were used in Los Angeles instead of gasoline, it would raise ozone-related deaths 9%.
Don't Throw the Baby Out With the Bathwater - If We're Smart, Biofuels Still Have a Role to Play
Given all of these concerns about increased use of ethanol and biodiesel, should we just bag the whole idea and move on to something else? No, I would argue.
When it comes to confronting the climate crisis and ending our oil addiction - two massive problems - we're going to need all the tools we can get. Biofuels, if done right, still have an important role to play in reducing our reliance on oil and our contribution to global climate change.
I present the above concerns about biofuels because understanding the potential pitfalls, problems and limitations of biofuels - both conventional and next-generation - will be crucial to developing the standards that are necessary to ensure that biofuels can help make a dent in our oil addiction and help solve the climate crisis without exacerbating other environmental problems.
We should focus on developing cellulosic biofuels that rely on readily available cellulosic biomass in existing waste streams - timber slash and mill residues, urban wood wastes, agricultural residues, etc.
These feedstocks offer the least environmental impacts, do not compete with food crops, and according to this study (pdf) are available in large enough quantities to be worth pursuing - roughly 3/4 of a billion dry tons each year, or enough to produce around 75 billion gallons of ethanol or biodiesel if estimated yields from next-generation biorefineries prove correct.
That is enough biofuel to provide about 1/3rd of all the energy consumed by cars and light trucks in the United States.
Additionally, unlike producing ethanol from corn, which typically requires large amounts of coal or natural gas, converting cellulosic biomass to biofuels requires little or no fossil fuel inputs. In fact, cellulosic biorefineries should be able to utilize the lignin portion of the biomass left over after the cellulose is removed to produce all of the energy inputs for the refinery process and even produce electricity for export (potentially offsetting electricity from coal or natural gas).
Getting on the Right Path - Time for a New U.S. Biofuels Strategy
To be done right:
Employing these kinds of standards in our public policy would necessitate a dramatic shift away from heavily supporting corn-based ethanol and soy-based biodiesel.
It would necessitate the creation of environmental sustainability standards for the U.S. biofuels industry and would imply a ban on imported biofuels from countries that do not adopt satisfactory sustainability standards on their own domestic biofuels industries.
It would require a focus on commercializing next-generation cellulosic biofuel technologies and exploring the most sustainable feedstock sources and harvesting/collection methods.
So, given all of the concerns about biofuels, why aren't any of our elected officials calling for a change in direction for the U.S. biofuels industry? Why do we continue to subsidize the corn ethanol industry to the tune of several billion dollars a year? Why do all of the presidential candidates pay at least lip service to corn ethanol, even those like Hillary Clinton and John McCain that have been openly critical of corn ethanol in the past?
Well, the political power of agri-giants like ADM and Cargill and the importance of corn-growing Iowa in presidential elections are certainly standing in the way of a sensible biofuels policy. It's hard to find another explanation for an energy policy that is so clearly designed to do little to actually solve any of the problems it's supposed to solve while so clearly benefiting narrow but politically powerful special interests.
The latest Senate energy bill continues this trend with a massive 36 billion gallon/year by 2022 biofuels requirement, 40% of which will likely come from good old corn-based ethanol, necessitating a quadrupling in the U.S. corn ethanol industry! (To be fair, the bill does require that 60% of the standard is met with next generation biofuels...)
It's time for a change in American energy policy when it comes to biofuels. It's time to actually have an energy policy when it comes to biofuels, and not a massive agricultural subsidy program disguised as an energy policy.
Let's heed the warnings of climate scientists, ecologists and rioting Mexican peasants: the path we're on right now means biofuels exacerbate the climate crisis, amount to an environmental disaster, and drive up prices for food around the world.
But there's another path, a path where sustainably-harvested, next-generation biofuels coupled with a dramatic increase in fuel efficiency and the adoption of plug-in hybrid electric vehicles makes gasoline a thing of the past.
It's time to get ourselves on the right path.
[A hat tip to Glenn Hurowitz at Gristmill]
Monday, August 20, 2007
Before We Get Drunk on Ethanol, Let's Make Sure We Get It Right
Tuesday, July 10, 2007
News From My Backyard: Oregon Legislature Wraps Up Landmark Session for Clean Energy
The 2007 Oregon Legislature closed a landmark session advancing clean energy legislation and putting Oregon on the map as a clean energy leader.
The Oregon Legislature wrapped up it's 75th Legislative Assembly on June 28th, ending a session that can only be considered a landmark year for clean energy and the environment.
The 2006 Elections saw Democrats strengthen their majority in the Senate and squeak out a one vote majority in the House while Oregonians re-elected Governor Ted Kulongoski who made clean energy a top priority of his second term. The Governor and the Legislature certainly delivered this year, passing a slough of bills this session promoting renewable energy generation, renewable transportation fuels, increased energy efficiency and even took an initial step towards addressing climate change.
Here's a recap of the flurry of activity in Salem this session:
Renewable Energy Standard: Perhaps the most high profile, and arguably the most important, piece of clean energy legislation to pass this session was the 25% by 2025 Renewable Energy Standard legislation, the Oregon Renewable Energy Act (SB 838).
The standard enacted by the Act requires Oregon's three largest utilties - Portland General Electric, Pacific Power and Light (PacifiCorp) and the Eugene Water and Electric Board - to acquire at least 25% of their electricity from clean, homegrown renewable energy sources like wind, solar, geothermal and ocean energy by the year 2025. The utilities face interim targets of 5% by 2011, 15% by 2015, and 20% by 2020 as well.
Oregon's numerous smaller publicly-owned utilities are required to meet smaller standards of just 5% or 10% by 2025, depending on their size. However, if any of these utilities invest in new coal-fired power plants, they lose their exemption from the full standard and must meet the full 25% by 2025 requirement. Oregon's public utilities had argued that the 25% standard was unnecessary for them, since they relied largely on hydropower to meet most of their load. This provision provides a strong incentive to put their money where their mouths are and stay away from investments in dirty, coal-fired power plants.
The Oregon Renewable Energy Act will require Oregon utilities to generate approximately 1,500 average megawatts (aMW) of renewable energy generation by 2025, enough to meet the needs of 1.25 million average Oregon homes. Increasing Oregon's use of clean, homegrown renewable energy sources will also strengthen Oregon's economy, increase the state's energy independence, help hedge against volatile fossil fuel costs and make a major dent in greenhouse gas emissions from the electricity sector.
Given this win-win-win-win-win situation, it's no wonder the Oregon Renewable Energy Act was supported by a remarkably broad and diverse range of constituencies, received strong, bipartisan support in both the Senate and House and was hailed by Governor Kulongoski as "the most significant environmental legislation ... in more than 30 years.”
In addition to establishing the Renewable Energy Standards, the Act requires all Oregon utilities to offer their customers a voluntary green power product, extends the public purpose charge on PGE and Pacific Power customers' bills to 2025 and re-dedicates the renewable energy portion of those funds to support small, 'community-scale' renewable energy projects less than 20 megawatts.
If you're curious, there's plenty more on the Oregon Renewable Energy Act at the Powering Oregon's Future site.
[Full Disclosure: I maintain the Powering Oregon's Future site and am responsible for much of its content. I also worked directly to help pass the Oregon Renewable Energy Act in my position at the Renewable Northwest Project].
Biofuels: Succeeding where it failed last session, the Oregon Legislature also passed a bill promoting the use of renewable biofuels in the transportation sector. The biofuels bill, HB 2210, includes a package of tax incentives promoting the production of biofuels and feedstocks in Oregon.
The bill also includes a renewable fuels standard requiring the use of ethanol and biodiesel in gasoline and diesel fuels sold in the state, but only after biofuel production in the Oregon and the Northwest reaches a substantial level, to ensure that the standard will support a local, homegrown biofuels industry.
Fuel stations will be required to sell at least a 2% blend of biodiesel in their diesel fuel once biodiesel production in Oregon, Washington, Idaho and Montana reaches at least 5 million gallons per year and a 5% blend once production in the Northwest states reaches 15 million gallons per year. A 10% ethanol blending requirement will also kick in for gasoline sold in the state once ethanol production within Oregon reaches 90 million gallons per year.
The bill also directs the state government to use biofuels in fleet vehicles and stationary backup power generators and provides a $200/year tax incentive to individuals who use biodiesel (B99/B100) and ethanol (E85) for transportation and solid biomass from agricultural or forestry wastes for heating.
The biofuels bill received very strong support, passing the House 53-4 and the Senate 24-3.
Clean Energy Tax Incentives: The Legislature also expanded two popular and successful tax incentives supporting renewable energy and energy efficiency investments. Eventually rolled into an omnibus tax package, HB 3201 , expansions of Oregon's Business Energy Tax Credit and Residential Energy Tax Credit passed with unanimous support in the House early in the session and finally passed the Senate in the final days of the session.
The tax bill expands the Business Energy Tax Credit (BETC), which businesses and corporations can claim on investments in solar, wind and other renewable energy systems, energy efficiency investments as well as investments in manufacturing plants used to produce clean energy technologies or components. The credit is expanded from a credit worth 35% of eligible project costs, capped at $3.5 million, to a whopping 50% credit, capped at $10 million.
The BETC expansion also includes a new $9,000 tax credit available to homebuilders for solar electric and solar water heating systems installed on new construction single family dwellings.
Additionally, the tax bill expands the Residential Energy Tax Credit, available to homeowners who invest in renewable energy systems, efficient appliances, weatherization and other home efficiency retrofits. Homeowners can now claim the credit on more than one investment in a given year, allowing them to claim a credit on both a solar electric system and a solar water heating system installed in the same year, for example. The bill also raises the maximum credit for fuel cells and small wind power systems to $6,000 (up from $1,500), the same maximum credit available for solar photovoltaic systems.
The Legislature also passed two other tax bills aimed at clearing up important problems in the tax code. One bill, SB 819, fixed a problem in the interaction between the Business Energy Tax Credit and Oregon's corporate income tax 'kicker' refund which hampered businesses ability to take full advantage of the credit.
The other bill, known as the Solar Teamwork Bill (HB 3488), amended the exemption given on property taxes leveled against the increased property value due to renewable energy investments, like the installation of solar arrays. The exemption now applies to systems installed by a third party on a property-owner's property, as long as that system is a net metering system or otherwise designed to primarily offset on-site electricity use. This provision will help encourage distributed generation for renewable energy by not discouraging building owners from allowing alternative energy systems to be installed on their buildings because of increased property taxes.
HB 3488 also directs the Oregon Public Utility Commission to authorize the state's two large investor-owned utilities to provide low interest loans for customers who install solar arrays.
Finally, an uncontroversial tax credit bill, SB 875, added ocean wave energy to the list of BETC-qualifying renewable energy resources.
Solar on Public Buildings: Rounding out a series of measures that ought secure Oregon's position as a leading pro-solar state, HB 2620 also passed this session and provides that public improvement contracts for construction or major renovations of public buildings appropriate at least 1.5 percent of the total contract price to pay for the installation of solar energy technology, including solar electric, solar water heating and solar space heating systems.
It's solar on every public building in Oregon from now on!
Energy Efficiency: A bill establishing minimum efficiency standards for a number of additional home and commercial appliances not previously covered by efficiency standards passed the Legislature this session as well. While not including as many appliances as originally hoped, SB 375 will help Oregonians save energy, reducing our energy costs and environmental impacts.
Unfortunately, a bill requiring all major facility projects to be planned, designed, constructed and renovated to meet sustainable building standards died in the Senate Ways and Means committee and a bill requiring the state government to reduce energy use 20% by 2015 passed the House 44-14 but died in a Senate committee. [Well we had to leave something left to do next session, right?]
Global Warming: Last but definitely not least, the 2007 Legislature passed it's first piece of legislation specifically addressing global warming in Oregon!
Originally seen as a long shot, three global warming bills were introduced early this session in the hopes that the large clean energy agenda might move quickly, allowing the Legislature to move on to specifically tackle global warming. In reality, the measures were introduced largely to lay the groundwork for upcoming sessions, and while public hearings were held on the bills, it wasn't expected that they would pass until future sessions.
Well, while two bills were indeed dropped after two hearings, as the session neared it's end, it looked like one, the Global Warming Integration Act, just might have some legs and the Act, HB 3543 managed to squeak passed the finish line right before the end of the session.
The Global Warming Integration Act codifies greenhouse gas emissions reduction goals (10% below 1990 levels by 2020 and 75% below 1990 levels by 2020) and creates the Oregon Global Warming Commission which will coordinate local and state efforts to halt growth of greenhouse gas emissions. It will also fund a new Oregon Climate Change Research Institute within the Oregon University System.
The bill not only passed, it passed with a bipartisan 40-16 vote in the House with moneys fully appropriated to not only fund the commission's activities, but also fully fund the research center. Not at bad ending to a busy session for clean energy advocates and a hopeful sign for the chances of future global warming legislation!
Next Steps: In the face of such a landmark session for clean energy legislation - clearly the most significant session for energy legislation since Oregon's electricity restructuring law passed in 1999 - you might be wondering what's left to do to complete Oregon's transition to a clean energy state?
First, while the clean energy provisions passed this year will certainly make a major dent in the state's greenhouse gas emissions and help promote a sustainable energy future, work has just begun to specifically tackle climate change. The Global Warming Integration Act is a nice step forward, but far from the end of the road, and the Legislature is likely to consider a cap and trade program and an emissions performance standard, both designed to limit global warming pollution from the electricity sector, when next they meet (perhaps as early as a short special session in early 2008 - the Oregon Legislature normally meet biennially).
Additionally, Oregon would probably be smart to follow in the footsteps of other states pushing renewable energy development, including Colorado and Texas, by working to establish renewable energy resource zones and expedite investments in electricity transmission to tap the resources in those zones and bring them to population centers.
I hope the Legislature also revisits the two energy efficiency and green building bills that died this session and takes a hard look at how Oregonians can push energy efficiency to the max. Stronger building codes that include advancements in sustainable and energy efficient design would make sense, and there are always updates to appliance and lighting codes that can help us squeeze more out of the same amount of energy.
A Session to be Remembered: While there's always more work to be done, the 2007 Oregon Legislature should go down in history as the year Oregon took a giant step towards a sustainable energy future. 2007 was clearly the 'Year of Clean Energy' in Salem. Let's hope 2009 (or even 2008) is the 'Year of Global Warming Solutions'...
[A very appreciative tip of the hat to the folks at the Oregon League of Conservation Voters' SalemWatch newsletter whose diligent reporting kept me up to date all session on the wide range of clean energy bills moving through the legislature.]
Thursday, May 31, 2007
Senators Cantwell, Kerry and Smith Introduce Clean Energy Package
Senator Maria Cantwell (D-WA) introduced a new energy bill to Congress last week that would provide long term extensions of several key clean energy tax credits, including the Federal Production Tax Credit. The bill, the "Clean Energy Investment Assurance Act of 2007" (S.6020) has been co-sponsored by Senators Gordon Smith (R-OR) and John Kerry (D-MA).
According to a summary of the bill from Senator Cantwell's office [word doc] the purpose of the bill is three fold:
The bill would do the following:
Expands and Extends the Federal Production Tax Credit:
Expands and Extends the Clean Renewable Energy Bonds:
Expands and Extends Residential and Business Renewable Credits:
Extends Energy Efficiency Credits:
Promotes Smart Meter Technology:
This is a good package of expanded credits and incentives for renewable energy and energy efficiency. I'm particularly happy to see my senator, Gordon Smith, co-sponsoring this bill.
The long-term extensions of these important credits will provide the long-term planning and financial certainty the renewable energy industry needs to make investments, both in renewable energy projects, but also in manufacturing facilities in the U.S. The boom-and-bust cycle of the PTC in the past has severely hampered the pace of renewable energy development in the US and has also discouraged significant investment in manufacturing capacity. Without long-term certainty that a strong North American market for wind and other renewable energy technologies exists, manufacturers are reluctant to make major long-term investments in factories in the U.S. This has led to a shortage of wind turbines and other crucial components and meant that many turbines used in US wind farms have to be imported from overseas, increasing costs (especially considering the weakening of the dollar versus the euro and other currencies).
I hope that this bill is incorporated into the package of energy legislation Congress plans to consider and pass in June and July. These incentives are crucial to the accelerated deployment of clean, homegrown, renewable energy technologies and increased energy efficiency. They will help level the playing field between highly subsidized fossil and nuclear energy industries and emerging renewable energy industries and the long-term certainty this bill provides will incentivize both quicken the pace of renewable energy development as well as increased US-based manufacturing of clean energy technologies - a win-win for the U.S. economy.
Read more!
Wednesday, October 04, 2006
Eye on China: China's Energy Focused on Renewables - Dedicated Fee to Pay for Renewable Energy Costs
China's top economic planning body, the National Development and Reform Commission (NDRC), announced at the end of June a plan to raise consumer electricity rates by the equivalent of 2.5 US cents per kilowatt-hour, according to Asia Times Online. A tiny fraction of that additional charge, about 0.1 cent per kilowatt-hour, will be used to develop renewable energy sources, a senior NDRC official said weeks later.
This dedicated renewable energy charge is unprecedented, the official said. The money would be used to cover the portion of the above market costs of renewable energy development, the Times reports. The practice complies with the principle enshrined in China's recently enacted Renewable Energy Law that the extra costs of renewable energies should be shared by all end users of electricity across the country. The Renewable Energy Law came into effect in January of 2006.
On April 20, at the second gathering of the State Energy Leading Group, the highest authority in China on energy issues, Premier Wen Jiabao stressed that renewable energy is strategically important, the Times reports. He reportedly urged all government departments to take effective measures to accelerate the development of renewable energies, so as to "lift the share of quality, clean energies in the total energy mix".
China's energy industry is growing at a remarkable rate. According to the Times, the production of primary energy reached 2.06 billion tons of coal equivalent last year, or roughly 47 quadrillion British thermal units (Quads). This is still about half of the 100 Quads of primary energy consumed in the United States, but has grown by 238% since 1978. At the end of 2005, China's total installed electricity capacity exceeded 500 gigawatts, according to the Times. Again this is about half of the United States' installed capacity of about 930 gigawatts, but China's adding generating capacity at the rate of about one large 500 megawatt coal-fired power plant per week!
The Asia Times Online article continues [with a few edits to improve the readibility of their English translation...]: In the past two decades, growth in production supported a 5.16% average annual growth in primary energy consumption. However, gross domestic product (GDP) went up even faster, at an annual average of 9.6%. The result was a supply shortage that short-circuited in 2004, when 24 of the 31 provinces suffered power cuts.
Last year's coal output, a record high and double the 2000 figure, was still not enough to meet market demand. Meanwhile, China's net imports of crude-oil products climbed to 143 million tons, nearly doubling the 76 million tons it imported five years ago.
Domestic energy resources are limited. In per capita terms, China is relatively poor in many energy resources. Its remaining exploitable reserves of petroleum, natural gas and coal equal merely 7.7%, 7.1% and 58.6% of the world averages respectively. At the current speed of extraction, experts say, these energy resources will last just 15, 30 and 80 years respectively. The corresponding world averages are 45, 61 and 230 years.
The situation prompted the country's economic planners to look for alternative energy sources. Renewable energies were high on the wish list.
[Hydropower] has a relatively long history in China, where more than 40,000 small hydropower facilities [produce a total of] 34 million kilowatts [34 gigawatts] in capacity [. China is also home to the largest hydropower facility in the world, the massive 18.2 gigawatt Three Gorges Dam]. 
Given its grave energy-security concerns, China is stepping up efforts to develop renewable energies. According to the Medium- and Long-Term Program for Renewable Energy Development, prepared by NDRC, renewable energies are expected to account for 16% of the country's total energy mix by 2020. Hydropower capacity will reach 300 million kilowatts, wind power 30 million, biomass energy 30 million, and solar energy 1.8 million.
The program has been scrutinized by the State Energy Leading Group and a revised version will soon be submitted to the State Council, China's cabinet, for final approval.
China has three laws pertaining to energy issues: the Electricity Law, the Energy Conservation Law, and the Renewable Energy Law. The almost unanimous endorsement of the Renewable Energy Law by the National People's Congress (NPC), China's parliament, in February 2005, ahead of schedule, caught many people by surprise. The law became effective on January 1 this year. A dozen or so implementation measures that accompany the law were made public about a month later. And measures for managing a special state fund for renewable energies and measures for giving renewable energy projects discount loans and preferential tax treatment are reportedly being worked out.
Ma Kai, minister in charge of the NDRC, said in July that [the government's agenda for 2006-10 included plans] to enact an Energy Law and revise the Energy Conservation Law.
Relevant government departments vowed to see through the new legislation within two years. The Energy Law will deal with basic and strategic energy development issues in China. It will rely on economic leverage to regulate the energy sector, making sure that extravagant users of energy pay a higher price, and encourage the prospecting and extraction of energy reserves and the development of renewable and new energies, said sources who were closely involved in the drafting work.
Officials in local governments are enthusiastic about promoting renewable-energy projects. Their motives vary, though, from securing a lucrative source of government tax revenues to building up a "green government" image and gaining plaudits for their personal work performance records. The so-called "green GDP" factors now have a considerable bearing on the government's assessment of an official's performance [see this previous post for more on China's new 'green GDP'].
Companies, state-owned or private, domestic or foreign, are also eager to embrace renewable energy projects, for reasons similar to those mentioned above, or out of a belief that the energy sector is a gold mine - or will be in the future. And for some companies, state-owned enterprises in particular, government pressure is also playing a role. On a number of occasions this year, NDRC Deputy Minister Zhang Guobao has said a certain proportion of the products produced by big energy developers would have to come from renewable sources.
A major barrier that has prevented renewable energies from being developed faster is the weakness China has shown in independent technology development. To date, most renewable-energy equipment or components used in China for wind power, biomass or solar energy have been imported, resulting in high costs. 
The push for renewable energies is not entirely driven by energy concerns. Environmental factors are also critical. China ratified the Kyoto Protocol in May 1998. Although it was not obliged by the pact to meet a specific emission-reduction quota, China is making efforts to show that it is a responsible member of the global family. International cooperation is necessary in addressing problems such as duststorms because, more often than not, the dust that sweeps through Beijing a dozen times each year comes from abroad, said an official with the Beijing Meteorological Bureau.
And China has a promise to keep with the upcoming Summer Olympic Games in Beijing. In its bid to host the event years ago, Beijing pledged to stage a Green Olympics, which would be more environmentally friendly than any previous Games. The 2008 Beijing Olympic Games are expected to recruit a diverse selection of renewable-energy technologies. Its main venue, the Olympic Green, is to have 20% of its power supplied by wind-generated electricity.
According to statistics, US$38 billion was invested in renewable-energy development worldwide in 2005. China topped the list with a commitment of $6 billion, which did not include its spending on large hydro projects.
[A hat tip to Renewable Energy Access]
Wednesday, November 09, 2005
Eye On China: China Bolsters National Renewable Energy Commitment
Renewable Energy Access.com reported yesterday that Chinese officials, speaking at the Beijing International Renewable Energy Conference (BIREC), announced a stronger commitment to renewable energy that includes a doubling of China's current use of renewable energy to 15 percent of the rapidly developing nation's energy mix by the year 2020.
China's new national renewable energy law comes into effect January 1st, 2006 and sets tariffs in place to foster renewable energy use. The Chinese government had originally stated a goal of reaching 10 percent renewable energy use by 2020. This new 15 percent commitment raises a renewable energy standard that had already been lauded around the world as a crucial step for a nation with limited and largely coal-based energy resources and a rapidly growing economy.
According to China Daily, this goal will likely involve investments of up to 1.5 trillion yuan (USD$ 184 billion). China is already the world leader in the use of solar thermal hot water systems and these new commitments could make it a major player with the other renewable energy technologies like solar photovoltaics, wind power, and biofuels.
The China Daily reports that Zhang Guobao, vice minister of the National Development and Reform Commission, has said that the business sector, instead of Government, will play a leading role in the investment and that international cooperation would be essential for China to meet its goals.
The government planned to specifically step up efforts to make renewable energy electricity available to the country's approximately 30 million people who do not have access to grid electricity. This mean there will be many stand-alone and distributed-generation renewable energy opportunities developed in the near future.
A 15 percent renewable energy commitment will mean a lot of renewable energy but the unfortunate reality is that the bulk of this commitment will be in large hydropower.
According to a report from Reuters, Zhang Guobao also said that hydro would generate 290 gigawatts (GW) by the year 2020, while biomass energy capacity would hit 20 GW, wind 30 GW and solar 2 GW.
The UK-based Guardian Unlimited newspaper reports that environmentalists have characterized Beijing's new renewable energy target as a good first step but "still not ambitious enough to offset the climatic damage caused by its spectacular economic growth, which will continue to be predominantly fuelled by coal."
"Environmentalists concerned about the impact of dams, which are ruining some of the world's most beautiful rivers, will be alarmed that hydropower is considered the main alternative to coal and oil," the Guardian stated.
Additionally, despite what may appear as a good first step effort, an inescapable reality for China is that the country's ongoing commitment to renewables -- whether largely through hydropower or not -- will do little to lesson the country's use of coal as the primary means for electrical production. The country currently uses coal for 70 percent of electricity in China and speakers at BIREC admitted that figure was not expected to change anytime soon.
This is good news, but like the article said, the bulk of this power will come from hydro, not wind and solar. Furthermore, while renewables will make up a growing portion of the pie by 2020, the pie itself will have grown much larger and this will most certainly mean significantly more coal consumption as well as natural gas (if China can get it; it will likely come from Russia).
This is a good first step, but China's rampant growth means that it's emissions, both of greenhouse gasses and criteria pollutants, will continue to rise, presenting a significant problem for Chinese health standards as well as the world (i.e. global climate change concerns, smog/acid rain forming emissions crossing national boundaries etc.). The developed world needs to work very closely with China (as well as India and other developing countries) to avoid such a scenario and continue to push for the development of cleaner burning and renewable energy generation to meet China's growing demand. It seems to me that one of the best things we could do would be to openly share Internal Gasification Combined Cycle coal-fired generation technology with China. If they have to use their coal, we should at least make sure it is used as cleanly as possible (with or w/out carbon sequestration, IGCC plants are significantly cleaner, and more efficient, than coal-fired steam plants).
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