realitybase - Journal

China is surging ahead of the US in cleaner coal combustion technology, according to this NYT article.

China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants, mastering the technology and driving down the cost.

While the United States is still debating whether to build a more efficient kind of coal-fired power plant that uses extremely hot steam, China has begun building such plants at a rate of one a month.

Construction has stalled in the United States on a new generation of low-pollution power plants that turn coal into a gas before burning it, although Energy Secretary Steven Chu said Thursday that the Obama administration might revive one power plant of this type. But China has already approved equipment purchases for just such a power plant, to be assembled soon in a muddy field here in Tianjin.

It appears that China has implemented a policy that encourages the use of these advanced coal combustion technologies. I wonder what it is. Has China subsidized the more advanced—and more expensive—plants, or has it started denying permits to use the older, less-efficient technologies? There have been no reports that China has adopted a cap and trade system, but has it raised the price of coal or imposed a tax on CO2 emissions? Something else, or a combination, perhaps?

It also appears that China has made a long-term commitment to greatly expanded use of its domestic coal resources for power generation. In contrast, it is by no means clear that any more coal fired power plants will be welcome in the US unless they include carbon capture and sequestration. In the US, the policy trends seem to be demand reduction and green power (including nuclear) and, if any new fossil fuel power plants are necessary, natural gas.

There is great political resistance in Congress to adopting a cap and trade (or other regulatory) regime that will increase the cost of burning coal in US power plants. Part of that resistance is based on the absence of an international regime that requires emerging nations like China to do “their fair share” to limit CO2 emissions. If China is determined to make coal a cornerstone of its energy supply system, the prospects for an effective international agreement do not seem rosy. China's unilateral moves may limit US policy options.

Update on Thursday, May 14, 2009 at 04:01PM by

Skeptic

A friend in the energy business emailed these comments:

It may be the NYT a bit overstates what's happening in China and I'm not sure how much to read into it except that there does seem to be a push underway. Can't say whether it's the result of a new policy. At least 2 Western companies with established gasification technology have been trying to move into that market, but primarily with lower pressure petrochemical plant gasifiers. I don't believe that any has sold an advanced IGCC unit. But a new US consortium seems to be making inroads. See http://www.greatpointenergy.com/pdfs/newsandevents/GPEInksHugeChineseDeals.pdf and http://www.gasification.org/Docs/Legis/2007%20China%20Roundtable/Senate%20RT%20Review%20DOW%20JPH%202007%2003%2023.pdf

But like the US, the Chinese don't yet seem to have yet built a true commercial plant. I sent the NYT article to a friend doing some work over there who states that most of the plants proposed are Chinese models and supposedly not very efficient. My guess is that the Chinese are balking at the costs of the foreign gasifiers and trying to go it alone. The fact that they're trying is good,but doesn't mean the plants will function well. The only two commercial IGCC plants I'm aware of are in Spain and Netherlands, and have had lots of problems.

There are several US IGCC plants still in some state of development, despite the DOE pulling out last year. IGCC has always been driven by natural gas prices and looked pretty good when gas prices were pushing up to $12+ or so an MCF, but now that they're half of that (and with major new domestic reserves looking probable), it will be tough to justify IGCC (and renewables generally) without huge ongoing subsidies.

US cap and trade. Starting to sound like cap, give away CERs, then trade. (i.e., take the "carbon tax" out of the system.) If the credits are substantially free, I'm not sure what this really means and accomplishes, and might even allow more conventional coal fired plants. But my guess is that the energy source of choice for power generationwill be natural gas for quite some time.

The second link above is to a PowerPoint presentation, the 20th slide of which says the strongly-supportive Chinese central government has a strategy of maximizing energy independence by using domestic coal efficiently. Incentives include grants to government owned entities, tax credits, and assistance with land, infrastructure, water, and logistics at the provincial and local levels.

Update on Friday, May 15, 2009 at 08:38AM by

Skeptic

Paul Krugman, returning from a week in China, reports:

In January, China announced that it plans to continue its reliance on coal as its main energy source and that to feed its economic growth it will increase coal production 30 percent by 2015.

Krugman also heard "outraged declarations" that it is unfair to expect China to inhibit its growth by limiting fossil fuel consumption when the developed nations caused the atmospheric buildup of CO2 with their relatively profligate use of fossil fuels in the past. That seems to me an argument the developed world cannot win in negotiations among nations to ameliorate global climate change. As I have suggested elsewhere, we may garner more cooperation and success if we can make the issue whether every nation that uses coal is using the best available technology for minimizing CO2 emissions. Reframing the issue that way would recruit the powerful forces of national pride to the cause of doing what needs to be done--no nation, and China in particular, wants to be criticized as being technologically backward. In that context, it is interesting that China seems to be trying to take the worldwide lead in clean coal technology.

Incidentally, the UN has published today "the first draft negotiating texts outlining widely varying options for rich nations to cut greenhouse gas emissions." I haven't read them.