Promises of a bright future hide current problems in the energy field
Milan (AsiaNews) – There has been a flood lately of articles from news agencies on the question of energy in China: some of these reports highlight technological progress; all are generally optimistic. A more in-depth analysis shows, however, that there really isn’t any news in sight, at least over the short or middle term. The real news is thus this flood of little news items which aims at raising amazed expectations of a radiant, if yet distant, future. This too might be no news: Communists regimes have always held themselves up by pointing to future conquests and marvels. Instead, from the unfounded and often even useless enthusiasm of this flow of technology news, one can perhaps catch sight of increased nervousness about the present and in particular about the need to cover a voracious hunger for the energy and raw materials required by Chinese development.
The bright future
Last week, the Chinese government established a new public company in the technology-sector for the production of nuclear power, the State Nuclear Power Technology Corp (SNPTC). The goal is to start a new phase of nuclear energy production through the adoption of so-called third generation technology (3G). As expectations currently stand, 3G plants will be more economical and safer, and can be built in less time than the current second generation (2G) and the intermediate (2.5G) kind. The decision to set up the SNPTC and thus launch into 3G nuclear production was reached after two years of studying the choice of a foreign partner in technology. This is obviously a gamble because it is expected that the world’s first 3G plant will be deployed in Finland only in 2009. Last week’s decision follows the 6-billion-dollar contract, for four 1-giga watt (GW) plants, which Beijing assigned last December to Westinghouse Electric, which is currently part of the Japan-based Toshiba group. So as to not preclude an alternative 3G supplier, China has also signed preliminary agreements with France’s Areva for two 1.6 GW plants. The launching of this new technological phase is part of the Chinese government’s goal of a fourfold increase in nuclear production capacity: it is expected that, by 2020, the total of such production capacity will reach 40 GW, as compared to the current level of 9.1 GW. If these targets are met, nuclear plants will provide in 2020 around 4% of the electric energy produced in China while last year only 1.9% was from nuclear sources.
In another case involving the most advanced forms of technology, we learn from other news that the US and Chinese governments are jointly launching a big research project, which was also announced in Washington last week during the second Chinese-American Strategic Economic Dialogue and is about carbon capture and sequestration technology. Basically, this amounts to injecting the carbon dioxide produced by thermoelectric plants, and particularly the coal-burning plants typical to China, into depleted oil reservoirs. This offers a double pay-off, in terms of the environment and increased yield from petroleum reserves which are otherwise not extractible. As for the environment, this technology allows for the reduction of carbon dioxide emissions into the atmosphere, thus contributing to limiting the greenhouse effect. This research funded by these two governments has yet to begin and so the theory has yet to be born out by experimentation.
Again for the purpose of reducing pollution from carbon-burning plants, the Chinese government has set itself the goal of obtaining16% of the country’s energy needs from renewable sources by 2020. Last year, 7.8% of China’s total energy consumption came from such sources, including biomass: food stuffs not suitable for human or animal consumption which are used to produce energy in various forms. In the rest of the world, renewable energy currently accounts, on average, for 16% of total energy consumption.
As for wind power, the government is aiming for a capacity of 5 GW by 2010, even if some observers feel that, by then, the total will be double that figure. Many initiatives have been taken in fact in this sector and it is likely that, due to the pressure being exerted on the government by wind power equipment producers, a situation of excess capacity will be reached. Experts in the sector are pointing out in fact that, in the case of wind power plants, a basic consideration is the plant’s utilization index, i.e. that there be an adequate supply of wind, and not installed capacity. Even without considering the greater costs of wind power, it is likely therefore that many of the projects that are currently underway will eventually remain inoperative.
As for solar energy, the costs of which are, in China, about 12 times that of coal-burning plants, Wang Zhongying, director of the Energy Research Institute, expects a positive contribution for 2040 – 2050. With the reduction of costs expected by then, Wang Zhongying has said that he is convinced that solar energy will prove to be more reliable than wind power.
In the gas sector, the Xinhua agency reported the discovery of a deposit of 240 billion cubic metres. The discovery was made near the massive Puguang deposit, jointly found by PetroChina and Sinopec in western China. The potential of this latter deposit is estimated to be about 600 billion cubic metres and production is planned for 2010. It is hoped that in the future up to 3,800 billion cubic metres of reserves will be identified. As is known, natural gas is considered a clean source of energy.
The murky present
Coal is still the source of about 70% of electric production in China and remains the country’s main source of energy, with all the pollution problems that this entails. Chinese coal production has been 2.33 billion tons against 2.25 billion tons of domestic consumption. Thanks to the increase in coal prices resulting from increased energy prices, mining companies have seen their profits skyrocket. Last week the public China National Coal announced an 85% increase in profits over last year. The coal industry is very fragmented in China and there are tens of thousands of small companies operating in the sector. According to government data, many of the fatal accidents – there were 4,746 victims last year according to official data – occur in small mines where, to keep costs down, there are few, if any, preventive measures in place. For this reason, the government is trying to force small enterprises to merge. According to many observers, the number of victims is perhaps two or three times that of the official data because, to avoid penalties, small mines avoid reporting accidents to the authorities.
As for an energy source which is relatively cleaner, petroleum, the recent increase in the Brent crude benchmark is certainly not comforting. The rising prices, currently over 70 dollars per barrel, are linked to the shipping difficulties in Nigeria resulting from local political tensions. African light crude, due to its low sulphur content and better gasoline yield, is considered to be the most suitable for China’s needs.
This situation of tension around the availability of African crude oil has led to the development of a parallel market. According to rumours in international petroleum business circles, many “non-official” loads of Nigerian crude have ended up in China. On the basis of such rumours, which, however, AsiaNews is not able to confirm, tankers from obliging countries are anchored at about 60 miles off the coast of Nigeria, out of the bounds of the country’s navy. At night, small barges are ferrying supplies to these other ships from the delta of the Niger River. Accompanied by counterfeit documents, the loads are then sold, through a chain of intermediaries, to small- and medium-sized refineries in China (but also in other countries) that can count on the good offices of the customs officials of destination terminals. It appears that all parties are earning a tidy sum from this trafficking, to the detriment only, of course, of the Nigerian government’s coffers.
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