China's Economic Transition Has Strong Implications for Energy

Kristopher Settle | Aug 05, 2013

China has a fascinating portfolio of energy usage; filled with much potential, but also filled with various challenges. The simple fact is that China continues rapid industrialization to meet the demands of its 2.1 billion citizens, as scores of people are transitioning from traditional means of agriculture to a more modern way of living.

In the `60s, over 60% of the Chinese labor force was predominantly focused on farming. However, in the following thirty years, that figure was nearly cut in half in favor of industrialization and urbanization.

For quite a while, the Chinese answer to growing capacity concerns was building additional coal plants. And they still do; as of today, nearly 80 percent of electricity production is derived through coal, and about 70 percent of that demand is utilized for manufacturing. Collectively, its share of the world's production of coal increased from 28% in 2000 to over 48% in 2009 as well.

Since coal has remained the lowest cost option for energy generation, and since it's readily available within the country, coal has been considered the most sensible means to provide energy. And for the most part, coal has remained successful enough to cater China's growing power demand. The end result, however, has been considerable environmental degradation and overpopulation concerns for urban areas over the last ten to twenty years.

A Smoggy Issue

Smog has become an immense health concern in some cities. The AQ level, which measures fine particulates that are deemed dangerous to human health, often skyrockets over the `safe' level of 50 in many cities - most notably Beijing.

Gideon Rachman has been in the thick of it (literally) for months, describing days where the AQ level crept over 250, and then 350, where the levels "made my eyes sting and lungs ache, even inside a car." What's even more concerning is that reports have confirmed AQ levels as high as 1,000 for Beijing in January this year, where vision was so clouded that citizens in skyscrapers were unable to see further than a block away from the fortieth floor of their building. Although Rachman did clarify these brutal days weren't daily occurrences, Rachman did say that when it comes to smog in Beijing, "a good day in Beijing is often a bad day elsewhere in the country."

Fortunately, concerns have not fallen on deaf ears. I wrote in April how Chinese leaders officially set strict country-wide auto emissions standards to reduce smog. New standards will mandate average fuel consumption for Chinese automakers to exceed 34 miles per gallon (mpg) by 2015 and 47 mpg by 2020, which is undoubtedly a step in the right direction.

Renewables to the Rescue?

To tackle the immense concerns regarding environmentally-friendly energy generation, renewable energies in China are emerging more and more frequently. Based on information from theenergycollective and the China Electricity Council, wind production actually surpassed coal production for the first time ever in 2012.

In addition, the 12th Five-year plan - an energy policy China published in January 2012 - set ambitious goals to accomplish by the end of 2015. Notably, two of those goals include a 17% reduction in carbon intensity and generating over 11% of its primary energy requirements from non-fossil sources.

At least one American company has begun to reap the benefits of a renewable energy focus in China. Last week, Lockheed Martin announced a partnership with Beijing-based Reignwood Group to construct a 10-megawatt floating power plant off the southern shores of China by 2017.

The plant will be the first of its size to use ocean thermal energy conversion (OTEC) technology for generating electricity. Dan Heller, Lockheed's VP of new ventures, believes "China was a very logical place to start" based on the necessity to pursue alternative energy there, along with its very active oceanographic conditions.

For more information on the interesting ins-and-outs of OTEC energy generation, or on the Lockheed Martin-Reignwood Group project, check out otecnews.org.

What's the Next Step?

The ongoing environmental issues stemming from energy production in China today will continue to affect its citizens for the foreseeable future, unless continued measures can be made to alleviate degradation.

The good news is other formerly-polluted cities around the world - like London and Los Angeles, for example - have progressed considerably over the last couple decades. There's little reason why cities like Beijing cannot share the same progress.

Widespread knowledge of environmental hazards, along with steadfast action to minimize them, is going to be an ongoing concern for China's energy policies. One past problem was that full energy information disclosure hasn't exactly been China's policy throughout its history. Believe it or not, there was a time in recent history where Chinese authorities didn't share its AQ level information with its people.*

In a stark contrast, however, the government today provides a phone application that Chinese citizens can download to give up-to-the-minute updates on AQ levels around every part of each city. If that is any indication of which direction the country is moving, then perhaps clearer skies are within reach after all.

*Granted, the US embassy shared the information with the rest of the world, but many Chinese people remained unaware

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Kristopher Settle ECS Grid

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