By Li Shuo

Amid all the news about coal and pollution problems in China you might have missed this one: According to new statistics from the China Electricity Council, China’s wind power production actually increased more than coal power production for the first time ever in 2012.

Thermal power use, which is predominantly coal, grew by only about 0.3 percent in China during 2012, an addition of roughly 12 terawatt hours (TWh) more electricity. In contrast, wind power production expanded by about 26 TWh. This rapid expansion brings the total amount of wind power production in China to 100 TWh, surpassing China’s 98 TWh of nuclear power. The biggest increase, however, occurred in hydro power, where output grew by 196 TWh, bringing total hydro production to 864 TWh, due favorable conditions for hydro last year and increased hydro capacity. In addition, the growth of power consumption slowed down — in Chinese terms a modest increase of 5.5 percent — influenced by slower economic growth, and possibly the energy use targets for provinces set by the Chinese central government.

Coal still accounts for 79 percent of electricity production in China, but fortunately that dominance is increasingly challenged by competition from cleaner energy, as well as government policies and public concerns about air pollution. The Chinese government’s 12th five year energy plan (2011-2015) aims for coal to be reduced from 70 percent to 65 percent of energy production by 2015. In contrast, the Chinese government has ambitious targets for wind, solar, and hydro, and plans to increase the share of non-fossil fuels to 30 percent of installed electricity generating capacity by the end of 2015.

Expansion of the coal industry does not have many friends in China anymore. Major increases of coal power in recent years have created not only record climate emissions, but an unprecedented problem of air pollution and water overuse, triggering increased concern among the Chinese urban population and the central government. The record air pollution in January this year has changed the discussion about coal, and now prominent policymakers and opinion leaders, even vice-ministers, call for capping coal use, especially in the eastern populated and industrial areas of China. The air quality targets the government set for 2016 will require cutting coal pollution. Already last year the government set new strict standards for coal power emissions, requiring costly investments in filters. This year the government set new water use targets for provinces, which do not give much room for increased use of water for coal use in key provinces. Now the discussion is around controlling the total consumption of coal, in addition to emissions trading and resource taxes. The coal industry is surrounded by challenges.

There is another, very sobering side to the story, though: additions to coal power capacity, even if they have been slowing down in recent years, still stood at 50 GW last year, even more than investments in wind. So it seems that some of the total coal capacity was not used last year, due to higher coal and transport costs, and increased costs of environmental protection. The economic slowdown, and slowing growth of electricity use, has forced coal to compete with cheaper hydro and even wind. Companies will push to use that new coal capacity this year, so coal power could see some more growth this year than in 2012, unless there are strong mechanisms to cap the growth.

So while some of the conditions that helped new wind power production pass coal may not repeat this year, it is also clear that the coal industry will continue to be challenged and undermined by clean energy and by China’s new policy priorities to address the air pollution crisis.

Li Shuo is a climate and energy campaigner with Greenpeace East Asia, Beijing.

Future cost drops from Chinese crystalline silicon solar producers will not be as steep as recent years, but they will still be significant.

Stephen Lacey, via GreenTechMedia

The cost of producing a conventional crystalline silicon (c-si) solar panel continues to drop. Between 2009 and 2012, leading “best-in-class” Chinese c-Si solar manufacturers reduced module costs by more than 50 percent. And in the next three years, those players — companies like Jinko, Yingli, Trina and Renesola — are on a path to lower costs by another 30 percent.

Check out [the above] chart outlining projected costs, which comes from GTM Research’s Global Intelligence PV Tracker.

“Clearly, the magnitude of cost reductions will be less than in previous years. But we still do see potential for significant cost reductions. Going from 53 cents to 42 cents is noteworthy,” says Shayle Kann, vice president of research at GTM Research.

With plenty of innovation still occurring in crystalline silicon PV manufacturing — including new sawing techniques, thinner wafers, conductive adhesives, and frameless modules — companies are able to squeeze more pennies off the cost of each panel. However, as the chart above shows, innovating “outside the module” to reduce the installed cost of solar will be increasingly important as companies find it harder to realize cost reductions in manufacturing.

Related Post:

• In Australia, Wind Power Is Already Cheaper Than Fossil Fuels, And Solar Is Right Behind

By Melanie Hart via CAP. The PDF has all citations.

In President Barack Obama’s first term, economic issues were often a source of friction between the United States and China, particularly regarding clean energy. But things started off relatively well a few years ago: President Obama made his first trip to China as president of the United States in November 2009, and energy cooperation was high on the agenda. President Obama and Chinese President Hu Jintao signed multiple agreements pledging to cooperate on a range of important energy initiatives such as the U.S.-China Clean Energy Research Center and a U.S.-China renewable-energy partnership.

These initiatives are important. The United States and China are the world’s biggest energy consumers and biggest greenhouse gas emitters. Our two nations have similar energy and climate problems but different comparative advantages for addressing those problems. The United States leads in cutting-edge clean energy innovation, and China leads in the rapid commercialization and deployment of those technologies.

Working together on clean energy just makes sense. If U.S. and Chinese clean energy enterprises can have open access to both markets, that access will improve their abilities to achieve good economies of scale and drive down costs. If both markets are competitive, that will give enterprises in both countries strong incentives to innovate, and innovation will lead to new technologies and new business models that should speed our transition to a clean energy economy. That would be good for U.S. and Chinese consumers, good for our economies, and good for the planet as a whole.

Despite those macro-level incentives to cooperate, however, things can get a bit more complicated when we actually delve into the details. Although we want to cooperate at a macro level, the United States and China are also big competitors at a market level. Both countries want to see their own companies dominate in critical industries such as solar and wind. Neither Washington nor Beijing is happy about being too reliant on energy products or services provided by foreign enterprises. Balancing cooperation with competition and our respective national ambitions is always difficult, and clean energy is no exception.

Although the United States and China expanded bilateral cooperation with critical projects such as the Clean Energy Research Center, throughout President Obama’s first term we increasingly butted heads in the trade realm. U.S. steel workers filed a World Trade Organization petition against China’s wind-power equipment subsidies in 2010; U.S. solar panel and wind turbine manufacturers filed U.S. Department of Commerce countervailing duty petitions and antidumping petitions against Chinese manufacturers producing those same products in 2011; and the American Semiconductors Corporation is still engaged in an ongoing legal battle with China’s Sinovel Wind Group over alleged intellectual property theft.

These U.S.-China clean energy trade frictions are serious, and unfortunately they are unlikely to disappear anytime soon. China’s regime to protect intellectual property rights is still developing. Some local officials in China are still more interested in protecting local companies than in adhering to international trade laws, and China’s relative lack of administrative transparency can make the resultant trade complaints very hard to resolve.

One area in which the Obama administration has proven especially adept, however, is approaching the U.S.-China relationship issue by issue without letting frustrations on one issue spill over and impede cooperation elsewhere. As my colleague Nina Hachigian recently wrote, President Obama has taken a “clear-eyed, nuanced and effective approach” toward China. Where cooperation makes sense, the president has been ready to deal. Where he feels American interests are being harmed, he has not hesitated to get tough.

This is exactly what we will need more of in U.S.-China relations in the clean energy sector. We need to continue to keep an eye on clean energy trade to ensure that American companies have a level playing field, but trade frictions should not hold us back from pursuing promising opportunities with China in other areas.

One of our most promising opportunities for U.S.-China clean energy cooperation is inward Chinese direct investment. Many Chinese companies want to come to the United States, directly invest in this country, and create jobs here. That is exactly what our economy needs, particularly in sectors such as renewable energy generation that generally do not pose national security concerns and will require large amounts of investment capital to develop. The problem is, however, that we do not have a good policy framework in place to encourage these investments.

In President Obama’s first term, the White House signaled general support for increasing Chinese direct investment. During Vice President Joe Biden’s August 2011 China trip, for example, the vice president stated:

President Obama and I, we welcome, encourage and see nothing but positive benefits flowing from direct investment in the United States from Chinese businesses and Chinese entities. It means jobs. It means American jobs.

From the perspective of most potential Chinese investors, however, those general statements of welcome are not enough to make the U.S. market look like a good bet. These investors need to be able to predict how the U.S. government will respond to particular foreign-invested business models—and that requires actual policies. The only policies we have at present are the national security review policies of the Committee on Foreign Investment in the United States, which are designed to block foreign direct investments that could pose national security concerns. National security protections are very important, but we should pair those protections with additional policies designed to encourage foreign investment in the sectors where security is not an issue. In this era of economic difficulty, we should not let those opportunities go by the wayside.

This issue brief will outline the opportunities and current problems in attracting Chinese direct investment and offer policy recommendations for how the United States can make the most of Chinese capital and knowledge in the clean energy sector.

Read more

So it turns out that burning nearly as much coal as the rest of the world combined is not good for public health.

“Beijing’s daily peak and average concentrations of PM2.5, the airborne particulate matter that raises risks for lung and heart diseases, as measured by the U.S. Embassy. The 2013 daily average was 194 micrograms per cubic meter, with an intraday peak of 886 on Jan. 12, the data show. By contrast, PM2.5 levels averaged 166.6 in 16 airport smoking lounges in the U.S.” (Via Bloomberg)

Significantly, though, as one Brigham Young University professor points out, “Unlike cigarette smoking, exposure to ambient air pollution is involuntary and ubiquitously effects entire populations.”

And that reminds me of the line from the Hitchock-esque movie, Diabolique, where a man says to the femme fatale as she lights up a cigarette, “Second-hand smoke kills, you know.” Blowing smoke in his face, she (Sharon Stone, of course) replies, “Not reliably.”

Living in Beijing kills far more reliably. Indeed, during the peak pollution weekend, “the number of emergency room patients with heart attacks roughly doubled” at one hospital.

A World Bank study performed with China’s national environmental agency, concluded “outdoor air pollution was already causing 350,000 to 400,000 premature deaths a year. Indoor pollution contributed to the deaths of an additional 300,000 people, while 60,000 died from diarrhea, bladder and stomach cancer and other diseases that can be caused by water-borne pollution.”

And that was in 2007! One can only imagine what the deaths from pollution in China are now that it burns 40% more coal than it did 6 years ago