Cleaner Greener China

Steve Papermaster - Powershift Ventures - President Council of Advisers on Science and Technology

US Energy issues 2008/ 2009
- volatility in oil markets has highlighted the concept of “global markets”
- investment oil exploration and production resumed, but many projects have been delayed
- ethanol drove food prices up

Trends that are historically not predictable on the short term, have been.. expectations for 200 USD became common.

Demand drivers
- fundamental supply constraints / growing demand
- oil deman in 1960 20mm/ 2008 87mm/ day
- US imported 2008 11.3mbd

US peaked in 2005 from transportation efficiencies

Key drivers going forward:
- Demand growth (GDP/ population)
-Supply growth (resources, infrastructure)
- environmental constraints (local pollution/ climate Change)
- security of supply (import dependence/ competition)
- in the middle of all these is technology

2008/9 policy
- energy independence and security act
- 2009 federal energy policy
– 150 billion, 10yr proposal for energy technology
– 1 million PHEV cars by 2015
– accelerate smart grid
– cap and trade policy
– renewable energy plans
- clean coal and nuclear

Technology Developments
- biofuels
- PHEV plug-in hybrids
- Electricity production (nuke, smart grid, renewable energy)
- electricity generation
- next generation solar, wind, geothermal
- energy storage

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Shangahiist has a short interview of Denise Cheng, founder of Kiwing Foods, that I found interesting.

How does a group of people that has no experience in the business of farming go about doing it?

We brought in experts that had done work at the School of Agriculture here. We also are surrounded by farmland that is tended to by small farming families. It was just a matter of bringing in the right people at the beginning. It’s not as if members of my family and I are the ones out there actually planting everything. But these experts know the best growing practices, know which seeds are the best.

and on the industry itself

What is your take on the local organic food industry in China? Is there increasing awareness and interest and thus more competition?

This is already happening. Around Shanghai, there is a growing interest in organics in bigger cities like Hangzhou and Nanjing. There are actually organic farms and companies that have been around for over a decade, but it has been a bumpy a ride. From my knowledge, a lot of them have gone out of business, and those that have hung around may only now be seeing the kind of market develop the way they anticipated earlier on.

With their home delivery business still not off the ground, when I spoke to Kiwing at the recent Greenovate party, they told me that they have been operating on a wholesale basis and will continue to seek opportunities there.. and given the order size and stability of restaurants is better, that is clearly a smart move in such a competitive market.

Quickly turning into a sizeable industry here in Shanghai, a number of new farms open their farm doors and have placed their goods in City Shop, JiuGuang, Lianhua, Carrefour, and others.

Shanghai seems to be a great market for products that often seen as a luxury, and while I have my own ideas for organic in Shanghai, I must admit that I am enjoying seeing these groups come online at the speed they are.  they are entering at a time when confidence in local goods is at an all time low, and that will open doors.

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Scientific American has recently highlighted a Tianjin based project called GreenGen in their article China Targets Cleaner-Coal Power Plants

A high profile project, GreenGen’s shareholders:

come from five largest power companies, two biggest coal companies and one important investment company: the China Huaneng Group (CHNG), the China Datang Corporation, the China Huadian Corporation, the China Guodian Corporation, the China Power Investment Corporation, the Shen Hua Group, the China National Coal Group and the State Development and Investment Corporation.

and it has a simple goal

GreenGen’s objective is to design, build and operate the first IGCC power plant in China in 2009 and coal-based, near-zero-emission GreenGen power plant in China with independent intellectual property rights.

to put the project into context, Kelly Gallagher of Harvard was quoted as saying:

GreenGen must function as a for-profit power plant, so even though Chinese officials agree on the long-term benefit of removing CO₂ from the air, the future of climate change may depend on the economic value assigned to that benefit.

To some extent, I would agree.  However, I still believe that for many of these programs the economic value is not a primary concern.  Cleaning the air and water locally is… as is creating the technologies of the future that will address environmental issues internationally.

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There are few sources of clean energy more discussed than solar, but as we recently highlighted, solar energy in China has faced a lot of hurdles.

Put into operation last week, this project could offer some hope as more and more firms are looking to put panels into operation.

However, before jumping to conclusions, I would be interested to know if the hotel is off the grid and storing energy in batteries, or is able to put energy onto the grid.  I would also be curious to know what (if any) tax breaks, loans, or other incentives were given to the group to put the panels on.. or if this was an organic decision.

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I so was excited to see that Google had granted 250,000 USD to sponsor a study of China’s power grid, that I almost screamed Yahoo!

The 18-month transnational study has three goals:

• Assess the potential of utility-scale renewable energy in China and the U.S.
• Explore near-term market opportunities for mature technologies
• Recommend energy priorities with a focus on grid connectivity and storage

In addition to this investment, their site Google.org lists an NRDC project that also looks quite good.

$2,000,000 to create a Center on Energy Efficiency Standards to help the US and China achieve major reductions in the use of electricity and natural gas – and significantly cut associated global warming pollution and energy bills – through voluntary and mandatory efficiency standards for buildings, equipment and appliance.

For me, it is clear that Google is just becoming one of those transformational companies that will have an impact in many areas that we will look back on and say… thank god there was Google.

To learn more about this study, you can visit the project website at the National Acadamies Website

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UK Trade & Investment has come out with a guide on Opportunities for Environmental Industries in China (PDF HERE), and I would suggest that anyone who is manufacturing or marketing green products look at this document to learn more about China’s landscape.

At a brief 2 pages, this document gives a couple of paragraphs on Air, water, and solid waste pollution issues in China.. and a few areas where companies can enter… but the core reason for you to view the document is for the names and contact details of people who can assist you.

As an additional resource, here is also the guide from the American Chamber of Commerce (PDF HERE) and from the Alberta China office (PDF HERE)

Additionally, UK Trade & INvestment does have an online magazine called Environmental Opportunities Overseas that is also quite good as well (it is not China specific)

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A couple weeks behind on this story, but the China Daily had an article last month titled Alcoa moves to build a sustainable future in China that I thought was really interesting.

According to the article, Alcoa’s position is :

To build a sustainable city, urban traffic capacity and urban resource supply are decisive factors that cannot be neglected.

The application of environmentally friendly materials in traffic and transportation and urban construction is of great importance, according to Alcoa.

Using a considerable amount of aluminum in automobiles will improve fuel efficiency and reduce emissions of greenhouse gas. With China’s large population, transportation such as trains, automobiles and others are frequently used. If aluminum is widely adopted in transportation, the discharge of the greenhouse gases will be greatly reduced, Wieser said.

And they have a few case studies

Alcoa cooperated with the Beijing Public Transportation Co and provided the forged aluminum wheels for 50 electric motorcycles. A new type of environmentally friendly bus jointly introduced by Alcoa and Yutong Bus was road tested in August

and

Alcoa’s construction product Reynolux has been widely used in many newly built facilities including the Terminal 3 of the Capital International Airport and the National Indoor Stadium for its aesthetic appeal and exceptional weather resistance.

No doubt, by making lighter modes of transportation, a savings in petroleum will be found, and that by using Alcoa products vs. a local steel smelter we can be assured that the VOCs released into the atmosphere are fewer.

However, Aluminum is one of the most energy intensive products there is, and the smelting process is a nasty one filled with VOCs.. so when I read something like the below, I have to wonder if they are a “sustainable” company at the core.. or are just regulated that tightly

“Considering that sustainable development is a long-term investment, we will do our best to minimize the impact of operations on the environment. At the same time, we are always ready to share with the industry the achievements that Alcoa has made in the fields of environmental protection and energy conservation because we are convinced that only by making great strides in those areas can we achieve the sound and long-term development of the enterprise itself and the whole industry.”

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For China, algae blooms are an issue they have been dealing with for a long time.  In the last 2 years, there has been international coverage of blooms in Wuxi (China’s 3rd largest lake) and Qingdao (right before the Olympics), but the problem is much larger and has a longer history.

When covering the issues last year, I began looking at biomass applications that would use algae, but everything I saw kept telling me that the algae that China is constantly fighting is not the same breed - of the right strain - as the type needed to create energy.

Two article this week may change that, and there may now be firms who are able to use the pond scum of China and turn it into something useful.

the first comes from Earth2Tech who are reporting PetroSun to Make Algae Fuel in China.

plans to establish an algae farm in China that will produce algae to be converted into biofuels. The company says it has an agreement with the Shanghai Jun Ya Yan Technology Development Co., which will commit $40 million to fund the initial construction of the farm. The profits of the venture will be split between PetroSun’s China subsidiary and Shanghai Jun Ya Yan Tech.

The next post, 15 Algae Startups Bringing Pond Scum to Fuel Tanks, is an older post from Earth2Tech that lists 15 different firms who are working on various common algae conversions

despite the fact that algae-to-biofuel startups have been taking their sweet time bringing a pond scum fuel product to market, some inroads have been made recently

Where this will get interesting, and perhaps exciting, is if firms are able to capture the algae blooms that China is normally producing and convert that into energy.

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KPMG has put together a highline report on China’s waste water industry from the investment perspective entitiled the The Water Business in China: Looking below the surface.

It does a nice job of highlighting some of the successes of foreign investors, hurdles, and legal structures in China for potential investors.

for a country as large as China, and with large amounts of investment in the treatment and delivery of water needed, this report will go a long way to introduce firms into the environment.

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Located an hour away from Beijing in the Binhai area, Tianjin has a long history as a port city and a commercial city.  Its 11 million people are know to be strong in industry, and the government has spent a lot of time and energy in creating it as a financial services hub as well (helps with Hu Jin Tao calling Tianjin home).

As a means to catalyze its cleanup, Tianjin has made a few announcements that would lead us to beleive that it is a city in the midst of a transformation.  It main economic zone (Tianjin Economic Development Area) lined its streets with LED bulbs, it moved all the chemical parks out of the city to the south of the city, and it has recently partnered with the Singaporian government to create an “eco-city”

The project will be developed in three stages over the next three to five years by the proposed Sino-Singapore Tianjin Eco-City Investment and Development Co  Ltd (SSTEC Investment & Development).

Stage One occupies a land area of approximately 110 hectares, one third of the size of the SUA. It is the template for the development of the Tianjin Eco-City and will comprise of residential developments, a commercial sub-centre and a business park. There will also be amenities such as schools, clinics, recreational facilities, shopping malls and parks.

The main focus in on on energy efficiency and eco-solutions to ensure the effective and efficient recycling of refuse, sewerage and wastewater as well as the practical use of renewable energy, will be integrated.

A convenient light rail system, smart road designs and well-connected walk paths will ensure an eco-friendly transportation network to reduce the use of private cars.

Where I am holding my breath a bit on this though, is that I have recently spent quite a bit of time in the area of Tianjin, and the city has a very serious air quality issue - particularly near the port and in the areas along the Binhai Bay where the dirtiest industries have been moved.

Keeping in mind It will take more than a couple hundred hecters to fulfill “eco-city” standards, where I am encouraged is that this project will become a model for others.  The previous partnerhsip between Singapore and China at this level led to the development of the Suzhou Industrial Park, one of China’s most prosperous and clean, and with Singapore being a “fine city”, I believe that they will have the power to influence cleaner greener advances going forward.

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