Disastrous air pollution said to be killing thousands
Record-breaking levels of air pollution in northeastern China, particularly in Beijing, appear to have spurred the government to undertake a major program to boost renewable energy programs across the country.
Record smog is estimated to have caused 8,000 premature deaths in four Chinese cities in 2012, according to research by Peking University - twice as many deaths as occurred in the so-called “Big Smoke” of 1952 that revolutionized the UK's approach to the environment and the outlawing of coal for heating in London.
The World Health Organization considers concentrations of the 25 most dangerous particulates per cubic meter of smog to be hazardous. On Jan. 12, these particulates peaked at 993 per square meter in Beijing - nearly 40 times the hazard limit. A cardiologist in Beijing said the pollution had doubled admissions for heart attacks over that weekend.
Pollution is said to have led to at least US$1 billion in economic losses, a figure that seems inadequate. Seven of the world's 10 most polluted cities are in China, according to a report by the Asian Development Bank, with Shijiazhuang, in Hebei Province, said to be the country's most polluted city, and probably the world's.
Obviously, the cleanup job is going to be gigantic. Over the past two years, Beijing has already invested RMB 12 billion (US$1.9 billion) in replacing the coal-fired heating systems of 160,000 homes in its downtown areas and has offered subsidies to residents who use electricity for winter heating. The city consumed 26.35 million tonnes of coal in 2010, accounting for 30 percent of its total energy consumption, while the other 70 percent of its energy consumption was made up of natural gas, imported electricity as well as new and renewable energies.
That isn't enough. Beijing suffers from an inversion layer of cold air at about 2,500 meters that traps the warm air and pollution under it, holding it firmly in place for months at a time.
The National Energy Work Conference was held in Beijing on Jan. 8 - in the middle of some of the worst pollution ever to strike the country, which should at least have provided some impetus to the cleanup plans.
If China is truly committed by the scale of the environmental disaster to clean its air, it will greatly expand its global leadership in renewable energy. We estimate that renewable energy capital expenditure could reach as much as RMB 500 billion (US$80 billion). The new year is expected to see the largest annual jump in solar, wind, and hydro power capacities in five years, according to goals set by Beijing in the energy work conclave Clearly, Beijing is taking advantage of the slump in the renewables equipment sector, particularly photovoltaic (PV) cells and modules, to push for an early achievement of China's medium-term clean energy installation targets.
This year China is looking to add another 21 gigawatts (GW) of hydroelectric generator capacity, 18 GW of wind farms, and 10 GW of solar power plants, according to details unveiled at the January energy conference. Most surprisingly, China is committed to more than doubling its installed solar capacity by the end of 2013, with corresponding demand for cells and modules possibly making up nearly 50 percent of total nameplate capacity of all Chinese solar equipment makers, which stood at 21GW as of end-2011.
This is a game changer for the struggling solar industry as well as for other renewables. Long-term 2050 wind power development plans call for another 10-fold increase in capacity from the near-term 2015 target of 100 GW. Rising capacity in the outer provinces such as Mongolia, Gansu and Xinjing will necessitate matching grid investment to transmit energy to the rest of China. Beijing should release solar industry guidelines in the coming months.
Photovoltaic power development plans are spread evenly between solar farms and distributed-type power systems. In the energy work conference for 2013, distributed systems are stated as the key focus for the year. According to this report, written by the director and senior staffs of renewable energy research at the NDRC, there is over 42 GW of potential solar capacity on rooftops across these listed Chinese cities. Their estimate points to vast market potential for retail installers.
By 2015, China hopes to satisfy nearly 10 percent of its total energy consumption with renewable sources, as stated in its 12th-Five Year Renewable Energy Plan, which was published in August of 2012. In terms of operating capacity, this reflects 290 GW of hydroelectric plants, 100 GW for wind power, and 21 GW for solar energy installations. One gigawatt, or 1000 megawatts (MW), is approximately the power rating of one typical nuclear power plant. With its now-declared aggressive 2013 plan, China could easily zoom past its medium targets 12 months ahead of schedule.
At the end of 2012, the nation had hydropower plants with installed capacity of 249 GW, wind power 62.37 GW, and PV capacity of approximately 7 GW. In comparison, the country operates 819 GW of thermal power, most of it coal, and 12.57 GW of nuclear power plants with 30 more, or 32.73 GW, under construction. (Despite this, the amount of usable energy generated by equivalently rated renewable means is far smaller than that of conventional power plants due to their much more volatile production profile.) In 2011, total renewable energy sources - wind, hydroelectric, biomass, solar and geothermal power - replaced the burning of 524 million tonnes of coal.
This year's annual energy conference also called for further reforms in the energy sector. In particular, liberalized price setting mechanisms for natural gas, gasoline, and electricity charges are expected to continue. A broader reform could also be in the works, as there appear to be increasing calls for the formation of a Ministry of Energy from the existing National Energy Administration, in order to better coordinate increasingly complex administrative and approval tasks now spread out between various government bodies. For example, the National Development and Reform Commission (NDRC) currently holds the key to energy pricing and energy project approval while the Ministry of Industry and Information Technology (MIIT) takes charge of the energy-saving and emission reduction campaign.
(Steve Wang is research director and chief economist for REORIENT Securities Ltd in Hong Kong)
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