Green China Rising

By Julio Friedmann

I had the pleasure of visiting a clean-energy project just outside of Shanghai last year. The project installed brand new equipment on a large coal-fired power plant to capture 120,000 tons of CO2 each year. Dr. Liu, our guide, impressed us with a few facts

-- The new equipment was designed, built and made operational in just one year, incredibly fast for this kind of operation.

-- In fact, it was permitted in three days! It had very low operating costs (still does after one year of operation, too).

-- Everything we saw was indigenous design.

plant photo.jpgFor enthusiasts of climate and of energy, China's the main event. They use the most energy, most coal, most steel and most cement of any nation -- with that, they emit the most pollution and greenhouse gases. Pollution from China alone directly affects the earth's climate, both by reflecting some light to outer space (soot and aerosols) and warming the atmosphere with black carbon particles. They're the biggest challenge of the day globally and the whole end game. The only thing that beats a trip to China is working in China, which I've enjoyed now for three years.

What's hard to impress on people who haven't visited is the scale of the investment made in energy and infrastructure. Roughly 10 million people are moving from the country to cities every year in China -- in some cases, the provincial government will commission a city of 500,000 people and just build it from scratch. A new, large coal plant is built in China every week -- in some years, twice a week.

But what many miss, even those who visit or work there, is that China's moving beyond simple manufacturing and construction. At center, China is innovating like mad -- and well -- in the energy sector.

One of my favorite examples is the biggest power company in the world, Huaneng Power Corporation, and its Chief Engineer, Dr. Xu Shisen. It was his technology and plant that we visited with Dr. Liu in Shanghai. Huaneng will install 10,000 MW of wind in the next few years (which almost equals U.S. total wind power) and an equal amount of solar (more than the U.S. total).

At the same time, Dr. Xu has overseen the development of impressive new technology in its own right.

While this development is largely for use inside China, Huaneng is looking beyond its borders (like any large multi-national). The company has partnered with a U.S. company (EmberClear and its subsidiary, FutureEnergy) to bring new clean energy technology to India, Kosovo and Pennsylvania. They're also in discussions with North America's two largest power generators, Duke and AEP, around investment and deployment in U.S. plants with Chinese technology.

They're not alone. ENN (a subsidiary of the XinAo Group), Shenhua, CNOOC and others are all developing clean tech themselves from scratch, both for domestic use and export. This covers solar thin-films, biofuels, coal-to-liquids, shale gas and smart grids, all with U.S. partners. Lishen battery company, one of the world's largest, is embarking on a $7 billion development drive just for battery technology and demonstration.

The good news -- this will ultimately lead to lower emissions faster worldwide, and cheaper power with it. The bad news -- for some in the U.S. -- is additional competition. While some U.S. companies will benefit, others will encounter aggressive, new competition with credible technology. Some will grow faster; others will lose market share.

U.S. businesses are quick to benefit from this, and will help us all reach a stable climate faster. U.S. jobs will be created in the process, as is already happening with many who are partnering in China's clean-tech sector right now. They're also critical to laying the foundation of trust between the two countries, absolutely essential for U.S.-China government agreements in trade, climate and other key areas.

Perhaps the main story is the constancy of the innovation drive. China has built the largest computer in the world (Tianhe-1). It started with U.S. chips, but the next one will be with indigenous chips. While the U.S. has a lead in using these computers well to accelerate innovation, we could lose that edge quickly -- in just two to three years. This same innovation permeates everything: aircraft, biotech, IT.

But clean-tech is the main event, at over $40 billion per year in government investment. That investment goes to universities, private companies, state-owned enterprises and new research institutes. It funds centers of excellence, large-scale demonstrations, modeling and simulation and bench-top research. It's like the Vannevar Bush innovation model (let a thousand flowers bloom) -- on steroids.

The U.S. needs to engage. America and China, combined, account for 40% of emissions, 40% of energy consumption, and 50% of global coal use. Nothing other countries do on this issue can match what either the U.S. or China does (or doesn't). We also cannot stabilize climate, even with the rest of the world acing in concert, without the U.S. and China leading the way.

China's growing green sector will dominate this century's trajectory, in commerce, industry, climate, energy and even issues like human rights and currency policy. The incredible build of transmission and power plants dwarfs everything else on earth in the energy biz. That's good news for the atmosphere, but something that gives pause to the other 5.5 billion people on this planet. The U.S. still must decide how best to marshal its resources -- making progress, making technology, or making excuses.

Julio Friedmann is the Carbon Management Program Leader for Lawrence Livermore National Laboratory, and the technical leader for the clean coal consortium under the U.S.-China Clean Energy Research Center.