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May
NREL Call for Applications: Industry Growth Forum
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
The National Renewable Energy Laboratory (NREL) is pleased to invite emerging clean energy startups from across the globe to apply to present their business opportunities at the 25th Industry Growth Forum. Apply by July 13 here.
Why Apply? The NREL Industry Growth Forum provides many opportunities to accelerate your company’s growth. As a startup presenter at the Industry Growth Forum, you will have opportunities to:
- Become one of the 30 startups selected to pitch to the cleantech industry’s leading venture capital and corporate investors.
- Compete to win the 2012 NREL Best Venture Award, including cash-prizes and commercialization services from NREL.
- Sign up for dedicated 10-minute one-on-one meetings with 50+ leading clean energy venture capitalists, corporate investors, strategic partners, and government agencies.
- Expand your network through hundreds of the world’s leading clean energy investors, executives, and technologists.
What if you are not selected as a presenting startup?
- Exposure to over 120 North American investors during the selection process.
- Valuable and direct feedback from the selection process.
- One reduced priced registration ($300) to attend the Forum.
- The opportunity to see and learn from the investment pitches of other clean energy companies.
- Sign up for dedicated 10-minute one-on-one meetings with 50+ leading clean energy venture capitalists, corporate investors, strategic partners, and government agencies.
- The opportunity to expand your network and mingle with investors, energy executives, NREL scientists, and other leading clean energy entrepreneurs from across the globe.
About the Forum: Join us for the National Renewable Energy Laboratory’s 25th Industry Growth Forum to be held at the Grand Hyatt Denver in Denver, Colorado on October 23-24, 2012. The National Renewable Energy Laboratory’s (NREL) Industry Growth Forum is the United States’ premier event for emerging clean energy and energy efficiency technology startups to gain exposure to and feedback from venture capitalists, corporate investors, government agencies, and strategic partners. Since 2003, presenting startups have cumulatively raised over $4 billion in growth financing.
May
Is Natural Gas Really the Next Big Thing? Part 2
Posted by Tom Ranken | 1 Comment | Categories: Commentary, Complete Digest
A WCTA White Paper: J. Thomas Ranken, Washington Clean Technology Alliance, May 2012. See part 1 here.
Natural Gas Supplies are Up Dramatically
The statistics are intriguing. From 1990 to 2010, global proved reserves of natural gas have increased by 49%. From 2000 to 2010, they increased by 21%.[1] The International Energy Agency (IEA) has estimated global gas resources at 32,000 trillion cubic feet, the energy equivalent of about 6 trillion barrels of oil.[2] This, according to Manhattan Institute Senior Fellow Robert Bryce, “is more than double the estimate for global gas resources that the (IEA) put forward in 2008.”[3] The top twenty countries with the largest natural gas reserves (as of January 1, 2011) were: Russia, Iran, Qatar, Saudi Arabia, United States, Turkmenistan, United Arab Emirates, Nigeria, Venezuela, and Algeria. Significant natural gas fields may further develop in Poland, France, Turkey, South Africa, Morocco, Chile, Mexico, Libya, Argentina, Brazil, Australia, China, and Canada. Other regions may yield additional new discoveries. In Mexico, for example, as of yet, there has been little exploration.[4]
Natural Gas Production[5]
|
Rank |
Country/Region |
Annual natural gas production (m³) |
Date |
| World |
3,127,000,000,000 |
2008 est. |
|
|
1 |
Russia |
612,100,000,000 |
2010 est. |
|
2 |
United States |
611,100,000,000 |
2010 est. |
| European Union |
182,300,000,000 |
2010 est. |
|
|
3 |
Canada |
152,300,000,000 |
2010 est. |
|
4 |
Iran |
138,500,000,000 |
2010 est. |
|
5 |
India |
120,000,000,000 |
2011 |
|
6 |
Qatar |
116,700,000,000 |
2010 est. |
|
7 |
Norway |
106,300,000,000 |
2010 est. |
|
8 |
China |
94,410,000,000 |
2010 est. |
|
9 |
Netherlands |
85,170,000,000 |
2010 est. |
|
10 |
Algeria |
85,140,000,000 |
2010 est. |
|
11 |
Saudi Arabia |
83,940,000,000 |
2010 est. |
|
12 |
Indonesia |
82,800,000,000 |
2010 est. |
|
13 |
Egypt |
62,690,000,000 |
2009 est. |
|
14 |
Uzbekistan |
61,410,000,000 |
2009 est. |
|
15 |
Mexico |
59,070,000,000 |
2010 est. |
|
16 |
Malaysia |
58,600,000,000 |
2009 est. |
|
17 |
United Kingdom |
56,300,000,000 |
2010 est. |
|
18 |
United Arab Emirates |
48,840,000,000 |
2009 est. |
|
19 |
Australia |
45,110,000,000 |
2010 est. |
|
20 |
Trinidad and Tobago |
42,380,000,000 |
2010 est. |
World Shale Gas Resources[6]
In the US, significant reserves are being found in New York, Pennsylvania, Texas, Montana, and North Dakota. “Domestic gas resources should easily last many decades,” says Bryce.[7] In fact, in a marked change from forecasts of just a few years ago, most analysts believe that North America will be a net exporter of natural gas into the foreseeable future. Howard Gruenspecht, Acting Administrator of the EIA, says that it is likely the United States will become a net exporter of natural gas early in the next decade.[8] [9] The market is reacting: Houston-based Cheniere Energy Partners is investing $6 billion for the first new plant capable of exporting natural gas by ship to be built in the U.S. since 1969. The Federal Energy Regulatory Commission is expected to approve the construction and operating permit as early as the first part of 2012.[10]
[1] Proved reserves are defined as the amount of known energy sources that are recoverable at economically viable costs.
[2] Resources may not be economically recoverable.
[3] Robert Bryce, Ten Reasons Why Natural Gas Will Fuel the Future (Center for Energy Policy and the Environment, Manhattan Institute for Policy Research: April 2010) pp. 1-2.
[4] John Deutch, “The Good News about Gas: The Natural Gas Revolution and Its Consequences,” Foreign Affairs, Vol. 90 No. 1 (January/February 2011): 85.
[5] U.S. Central Intelligence Agency, The World Factbook (March 2012) https://www.cia.gov/library/publications/the-world-factbook/rankorder/2180rank.html
[6] U.S. Energy Information Administration, World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States (Washington, DC: April 2011).
[7] Op. Cit., Bryce, p. 1.
[8] Howard Gruenspecht, Statement before U.S. Senate Committee on Energy and Natural Resources, 31 January 2012.
[9] In early 2012, technically recoverable resource (TRR) estimates of Marcellus shale substantially decreased from 410 trillion cubic feet (TCF) to 141 TCF. This resulted in a reduction in total U.S. TRR reserves to 482 TCF from an earlier estimate of 827 TCF. Total production, however, was forecast to increase seven percent more than in the earlier estimate. U.S. Energy Information Agency, Annual Energy Outlook 2012 Early Release Overview (23 January 2012).
[10] Rich Miller, Asjylyn Loder, and Jim Polson (Bloomberg News), “U.S. Closing in on Energy Independence,” The Seattle Times, 8 February 2012, p. A3.
May
Energy: Is Natural Gas Really the Next Big Thing?
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
There has been a lot news and thought recently about the changing role of natural gas in the US. This has been generated by the advent of two new technologies (fracking and horizontal drilling) that have created access to vast new supplies that were previously thought to be too expensive to extract.
There are legitimate concerns over these developments, as well as great opportunity. I have been researching the issue. Some of my thoughts were published on Xconomy. You can find the article here.
Apr
Tom Ranken: Prospects for the Smart Grid Sector
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
Our friend, Evan Scandling of APCO Worldwide, has commented on a recent lunch that we organized to discuss the prospects for the smart grid sector. It was a very thought provoking discussion and Evan has done a nice job summarizing his thoughts. Here are a few others from my notes:
- I was struck by the real world impact that these innovations are having at Microsoft. Darrell Smith of Microsoft talked about how they are now able to proactively manage potential problems in their massive facilities. They are endeavoring to process a half billion data points every twenty-four hours. Microsoft’s efforts are “all about productivity” and they generate a payback time of 18 months–in the nation’s third cheapest electricity market.
- It was clear from this discussion that this sector is still in its infancy with the potential yet to be realized. Besides the complexities of software design, integration of systems, understanding the data, and reacting to it are complex problems. They will be solved and that may well create robust smart grid business opportunities.
Apr
Evan Scandling: How Will the Smart Grid Influence IT, EVs and Commercial Buildings?
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
Source: Evan Scandling, APCO Worldwide, Northwest Cleantech, April 2012.
I recently had the opportunity to join a roundtable discussion about the future of smart grid applications in three areas that don’t get as much attention as utility and home usages: commercial/industrial buildings, IT and electrical vehicles.
Hosted by the Washington Clean Tech Alliance, the roundtable brought together an array of more than fifteen experts ranging from end-users like Microsoft’s facilities manager Darrell Smith, to start-up entrepreneurs like Jim Holbery of GridMobility and Jimmy Jia of Distributed Energy Management, to academics like Chen-Ching Liu, an internationally recognized smart grid researcher based at Washington State University.
Bottom line – there were a lot of smart voices at the table and no shortage of perspective-changing insights. To avoid a 5,000 word thesis recapping the entire dialogue, I’ve included some of the more notable points made during the conversation:
- Investments into smart grid and energy management software are only going to get hotter – tech giants like Google and Microsoft would be wise to amp up their investments now. In this vein, look for the Northwest to compete with Silicon Valley to be the hub of smart grid talent.
- Look to Japan as a case study for smart grid implementation and renewable energy implementation. As one of the experts pointed out, “Japan is between a rock and hard place,” in a post-Fukushima recovery in which they’ve ruled out nuclear power as part of the energy mix. The country will be forced to be as smart and efficient as possible in restructuring their energy infrastructure of the future…unlike places like the U.S. where we can continue to find reasons to move slowly.
- Buildings contribute to approximately 40 percent of global emissions. Commercial and industrial facilities managers must turn to smart grid solutions to shift from reactive to predictive building energy management.
- The slow adoption of electric vehicles nationally can largely be explained on a regional or state-by-state basis. Example: Washington state makes perfect sense for EVs right now because 50 percent of emissions are transportation related and we can electrify cars with clean hydro power. Conversely, in a coal-heavy state like West Virginia, electrifying vehicles would mean replacing tailpipe emissions instead with increased emissions from coal plants. As one expert in the discussion remarked, “If you don’t do it right, you just trade one problem for another.”
- The promise of natural gas’ stability is tempting these days, but it would be foolish to base any long-term energy portfolios on today’s prices – the economics of that energy source (and any) could be quite different in a few years.
Sitting at the table for two hours with these specialists provided me with a notebook full of valuable perspectives, but if I had to pick out one overarching message of the day, it’d be that the “smart grid” –applying digital power to harness better energy intelligence (broadly) – is much bigger and game-changing than the vast majority of us think, or can even fathom.
One investor at the table even quipped that he hadn’t been as excited about a high-growth industry since the days when helped launched ESPN into the world of cable television. Enough said, for me.
Apr
Is Natural Gas Really the Next Big Thing? Part 1
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
A WCTA White Paper: J. Thomas Ranken, Washington Clean Technology Alliance, April 2012.
Is natural gas the new next big thing? It is being called a revolution in energy and a” game-changer.” Pulitzer-Prize winning energy researcher Dr. Daniel Yergin claims that “By the beginning of this decade, the rapidity and sheer scale of the shale breakthrough—and its effects on markets—qualified it as the most significant innovation in energy so far since the start of the twenty-first century.”[1] The President has proclaimed that the United States is “the Saudi Arabia of natural gas.”[2] It is “the energy equivalent of the Berlin Wall coming down,” says Robin West, Chairman and CEO of PFC Energy.[3]
Worldwide Natural Gas[4]
Proved Reserves (Trillion Cubic Meters)
They may be right. Over the course of the next several years, we are likely to witness dramatic alterations in the utilization of energy. It will not be overnight, but it is likely that there will be steady movement away from coal and petroleum and into natural gas.
[1] Daniel Yergin, The Quest: Energy, Security, and the Remaking of the Modern World (New York: The Penguin Press, 2011) p. 330.
[2] Joe Schoenmann, “Obama: We are the Saudi Arabia of Natural Gas”, Las Vega Sun, January 26, 2012.
[3] John Ydstie, “Is U.S. Energy Independence Finally Within Reach? National Public Radio, March 7, 2012.
[4] BP Statistical Review of World Energy, June 2011, p. 20.
Apr
Do Local Climate Strategies Work?
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
A paper by Adam Millard-Ball entitled Do City Climate Plans Reduce Emissions? has started a debate between two noted environmental thinkers in Seattle: Climate Solution’s K.C. Golden and Todd Myers of the Washington Policy Center.
Dr. Millard-Ball has a doctorate from Stanford and is an Assistant Professor at the McGill School of the Environment at McGill University. In his 2011 paper, he notes that “more than 600 local governments in the U.S. are developing climate action plans that lay out specific measures to reduce emissions from municipal operations and the wider community. To date, however, it is unclear whether these plans are being implemented or have any causal effects on emissions.”
Millard-Ball finds, based on research of climate action plans in California, that cities with climate plans have had success in implementing strategies to reduce greenhouse gas emissions. He finds “little evidence, however, that climate plans play any causal role in this success. Rather, citizens’ environmental preferences appear to be a more important driver of both the adoption of climate plans and the pursuit of specific emission reduction measures. Thus, climate plans are largely codifying outcomes that would have been achieved in any case.”
In other words, jurisdictions that have governmental climate plans have had success in reducing greenhouse gases. Dr. Millard-Ball’s research, however, cannot confirm that the plans have been the cause of that success. It is possible that other factors may be at work, such as independent market forces. (For example, office tenants may be willing to pay higher rents in a green building–leading developers to build more LEED-certified buildings–regardless of the existence of a local climate action plan.)
K.C. Golden of Climate Solutions is not impressed by such findings. He wrote in Local Emission Reduction Targets Are Successful. So Why Trash Local Climate Action Plans? on March 12, 2012: “Is there something newsworthy in the fact that the plans themselves do not cause the emission reductions? Of course it’s the actual activities, not the plans, that reduce the emissions.” It is difficult to imagine, he says, “that they would have adopted climate action plans if that were not true.” He concludes that “There’s no shortage of real villains in the climate story. Local officials who developed climate plans in communities that are successfully implementing solutions are not among them.”
Todd Myers of the Washington Policy Center thinks that Golden has missed the point. In his March 27, 2012 commentary entitled Climate Plans Haven’t Paid Off. So Why Are Greens Claiming “Success”?, Myers argues that the record in the Northwest is “particularly bad.” Washington ranks 44th, he says, in cutting carbon emissions. “Seattle’s record is similarly dismal.” Myers writes that “most of Seattle’s emission reductions occurred in the 1990s when people… switched from expensive oil heat to inexpensive natural gas. The trend had nothing to do with climate plans.”
The truth is that Millard-Ball’s findings are hardly earth shattering. The paper finds no causal link between climate plans and results. His paper suggests that “climate plans may largely be codifying outcomes that would have been achieved in any case.”
The paper does not argue that climate action plans are either effective or ineffective. It doesn’t argue that climate plans don’t affect greenhouse gas emissions. It doesn’t suggest that climate plans are counter-productive, it doesn’t say they are bad, and it doesn’t say the people that have devised them or are implementing them are ‘villains.’ It does confirm that jurisdictions that have climate action plans have been effective in reducing greenhouse gases. It says that it is not clear that the plans are instrumental in these results.
That, of course, is quite interesting and suggests the need for additional research, particularly on specific climate action policies. We should want to understand the effectiveness of environmental policies.
Both Golden and Myers agree that carbon reduction is good public policy. Reasonable people that care about the environment and effective public policy should raise questions about how effective government policies are in achieving their goals. It is reasonable to evaluate the effectiveness of climate programs. And it is most reasonable to abandon or alter policies that fail to achieve their objectives.
Mar
Cleantech Trip to China: Last Full Day in Shanghai
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary
It was a bit like Seattle today in S
hanghai. I started the day with an early run along the Shanghai Bund, a beautiful waterfront promenade. The temperature was perfect and there was a light rain coming down that felt good. Unfortunately, as the day moved along, the rain became a little more than Seattle-like.
Our first–and only–presentation of the day included the Vice Mayor of Hai’an and Peggy Liu of the Joint US-China Collaboration on Clean Energy (JUCCCE).
Hai’an is a city of a million people covering 1,000 square kilometers. The GDP exceeds US$10 billion. The city is dealing with growth issues that come with its expansion of the construction and textiles sectors. Pollution and environmental cleanup are becoming increasingly important issues.
JUCCCE is a non-profit organization endeavoring to accelerate cleantech in China. JUCCCE focuses on convening and activating high-level influencers across all sectors and borders. They put on events and trainings that affect technology development, policy maker training, social behavior.
Our final luncheon took us through rainy backstreets. We closed the day with a marvelous reception at the home of the Consul General in Shanghai, Robert Griffiths.
So ends the official trip. All of us are headed out tomorrow morning to different destinations. There is a lot to ponder.
- Consul General Robert Griffiths with OneEnergy Renewables Travis Bryan
This was my first trip to China. As you may have been able to discern from earlier posts, I am not only interested in cleantech business and policy, but I am trying to understand some aspects of Chinese society and how they make decisions.
I certainly have learned a lot. I am looking forward to finishing some more reading and post-trip debriefings. I will post more on what I have learned in the days to come.
For now, I am headed to Hong Kong for a couple of days with my friend, Hal Calbom, then back home.
Mar
Cleantech Trip to China: Shanghai
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
This is a huge modern city. The skyline–particularly at night–is stunning. Yet it wasn’t unusual to see glimpses of the old China during our bus rides and walks through Shanghai.
We started the day early at 645 a.m. to beat the traffic. We did–and got to spend some welcome time at a Starbucks.
Our first meeting was with Fred Chang at Chrysalix Capital and Peter Corne of Dorsey & Whitney. China was described as a nation of enormous cleantech potential, but that it had not created much innovation in the sector yet.
- Fred Chang of Chrysalix
But, we were told, it is inevitable.
China is doing “all the right things” to be a great innovation player. Academia is being reformed and more students are coming or staying home. Research is focused on industrial improvements. More research money is being provided. “It is not if, but when” it will become successful.
- Reggie Lai of APCO Worldwide
We moved on to APCO Worldwide. We heard a detailed analysis about New Energy in China with a focus on regulatory perspectives by Deputy Managing Director Reggie Lai.
Reggie described the government of China as the “most powerful government in the world” and that it essentially runs everything in China. There is now, however, some dissension in the National People’s Congress: the nation’s budget was adopted with 500 dissenting votes (of 3,000).
The Chinese, he said, have been concerned about the value of their US debt holdings and inflation. This has resulted in increased, targeted investments in the US. See Reggie’s presentation here.
- Harrison Tu of Infinity Solar Ltd.
- Dark suited men about to engage in a morning double file jog around the block.
We met last with Harrison Tu at Infinity Solar Ltd. The company has spent the past three years developing thermal solar technology that they hope to begin selling commercially soon. The technology allows the company to install a solar thermal unit on homes, which can be used to heat water and the home, and, eventually, air condition homes. The company believes that there are large markets for the technology in China and globally.
May
Cleantech Trip to China: Report from Joe Borich, Washington State China Relations Council
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
Note: This is Joe Borich’s report on the March 2012 Cleantech Study Mission to China. The trip began in Seattle and proceeded to Beijing and Shanghai. Nearly two dozen participated in the trip.
Joe’s complete trip notes can be found here.
Joseph J. Borich is President of the Washington State China Relations Council. Prior to his current position, Joe was a Foreign Service Officer beginning his career in 1972. He has been closely associated with China throughout most of his career, serving under every president from Nixon to Clinton in a China-related capacity. His last assignment was as Consul General in Shanghai from 1994 through 1997; he previously helped open this Consulate General in 1980. He also served as Director of the Taiwan Coordination staff in the Bureau of East Asian and Pacific Affairs in the Department of State, and prior to that as the last Deputy Chief of Mission in the former U.S. Embassy in Mogadishu.
Washington State has become a global leader in clean technology including alternative energy sources, energy and water efficient building construction, smart grid and smart city technology, and biotechnology. Jointly organized by the Washington State China Relations Council, the Trade Development Alliance of Greater Seattle, the Washington Clean Technology Alliance, and the Northwest Energy Angels, the purpose of the business mission was to give clean tech practitioners and investors from our area a look at China and what it’s doing in the clean tech area, as well as to examine opportunities for cooperation and investment.
Our delegation met with the U.S. Embassy, the State Council’s Development Research Center (the Chinese government’s top economic think tank and responsible for the inputs to the five-year plans), energy and clean tech consulting firms, China’s State Grid (its principal power company with over one billion customers), wind, solar, and battery companies, and several clean tech-focused venture capital firms.
Thoughts from American Businesses in China
At the 30,000 foot level, we learned that American businesses operating in China are for the most part optimistic about their near-to-mid term prospects. Fifty-four percent of those polled by the American Chamber of Commerce are already expanding, or plan to expand, to second- and third-tier cities in China. Basic optimism aside, American businesses remain concerned about inadequate protection for their intellectual property (including brands, patents, and proprietary technologies); the availability of human resources and the rising cost of labor; obtaining necessary certifications and approvals; and the somewhat uncertain and oft-changing regulatory environment.
Notable Trends
Among the significant economic trends currently present in China are a slowdown in GDP growth this year and next (although there seems to be little concern about a hard landing). Along with slowing growth, China’s foreign exchange reserves are also declining in part because of China’s shrinking global trade surplus and also because of a rising tide of outbound direct foreign investment by Chinese firms. Slowed growth is partly due to declining exports and slowing construction; but the central government’s renewed efforts to rebalance China’s economy is also likely a factor. By 2010, China’s top leadership had reached the conclusion that growth driven principally by fixed asset investment and exports was rapidly becoming unsustainable, a lesson driven home by the ripple effects of the global financial crisis of 2008-2009.
Rebalancing is intended to turn growth more in the direction of domestic consumption. This in turn requires that China invest more in items like health care, education assistance, social security/retirement, and low cost housing, programs for which there are still relatively few beneficiaries in China. As a result, the propensity to save among Chinese is off the charts at over 40% of income, while the propensity to consume is very low (domestic consumption accounted for only 35% of China’s GDP last year – less than half the proportion of developed countries). The adjustments necessary to rebalance the economy, however, will slow growth at least in the short run, and also collide with the vested interests of huge state owned enterprises and conservative elements in the Chinese Communist Party who prefer strong central control of the economy and the political system. Although rebalancing is an integral part of the current five year plan (2011-2015) as it was in the previous one, relatively little headway has been made so far.
Urbanization is another compelling trend in China today. For the past decade and for the next decade at least, average annual rural to urban migration has been and will continue to be around 20 million. In 2010, there were 171 cities in China with a population of one million or more; about 47% of the entire population lived in cities then. Plans call for an urban population constituting 51% of the total by 2015, but recent figures released by China indicate they may have hit that target already. This demographic trend has several important implications, not the least of which being that between now and 2030 China will have to expand its urban environment by roughly the equivalent of the population of the U.S. It also portends a dramatic increase in energy intensity since urban residents use far more energy than their rural counterparts.
Along with the pressures of urbanization and the need to rebalance the economy, China’s leadership is also facing growing discontent from the widening income gap (as one example of this rural residents’ incomes are only 1/5 of that of urban residents), the inequitable household registration system that disadvantages rural residents and those who have unofficially changed their residences to the cities (most rural-to-urban migrants fall into this category), and the cumulative effects (including those on health) of China’s badly damaged environment. Over the next 12 months, China’s leadership lineup will undergo a major change; the new lineup will be faced with the daunting task of effectively addressing these issues, and will likely have to do so sooner rather than later.
China’s Five-Year Plan and Clean Technology
We learned about China’s current (12th) Five-Year Plan from several sources. Of particular interest to our group were the presentations on the plan’s treatment of low carbon development. China now leads the world in petroleum importation – over 50% of the oil it uses today is imported. That figure will grow to 70% by 2020. China’s use of fossil fuels is creating huge problems for China’s environment including pollution-based health problems and rising morbidity/mortality rates, and other problems like acid rain.
To try to address these problems, China has adopted some ambitious goals, including:
What does “low carbon development” mean in China?
The 12th Five Year Plan specifies by 2015:
A special emphasis will be placed on relevant industries (including, presumably, subsidies, tax incentives, and other government tools for promoting rapid development): new energy; the environment; autos (especially EVs); modern knowledge technologies; biotech; and high speed transportation. In all, these favored sectors will constitute 8% of GDP by 2015 and 15% by 2020.
Building energy efficiency standards are currently good, but are not well enforced. This is changing for the better even as stricter standards are being adopted. Also energy pricing is being further rationalized and carbon trading is being gradually introduced. The government has set the goal of one million Electric Vehicles on China’s roads by 2015, though this goal is probably too ambitious.
China has long maintained an industrial policy, attempting to pick winners and losers among various industries and within industries, among competing state owned enterprises. The 12th Five-Year Plan identifies seven strategic industries that will enjoy government patronage:
Clean Energy and Power Supply in China
State Grid, China’s largest power company covering 88% of the country’s area, is the largest utility in the world and last year distributed over 2700 terawatt hours of electricity. The company is concentrating its efforts on overall construction of a smart grid by 2015. China currently has the most advanced system in the world for using UHV transmission and non-fossil fuel energy sources (and is way ahead of the U.S.). State Grid is also building a fiber optic network form smart grid information/dispatch that will also be used eventually to carry telephone, cable TV and other signals a well.
China is also doing very advanced work with battery technology, both for energy storage and for commercial use in consumer items and EVs. Prudent Energy Company, for example, has developed a storage battery based on use of a vanadium electrolyte. This type of battery poses little or no environmental risk and is nearly 100% recyclable. Each battery has a lifespan of 15-20 years and is ideally suited for storing and stabilizing wind and solar power.
Lishen Battery Company is using improved lithium ion technology to make batteries for electronics manufacturers (including Foxconn and Dell), as well as EV batteries. Lishen batteries currently power a vehicle for up to 200 KM (125 miles) between charges, but new technology the company will soon be incorporating into its batteries will double the distance between charges. Lishen has been cooperating with Washington State’s Demand Energy for the past two years on smart grid and energy storage to develop distributive energy systems.
Venture Capital
Among the venture capital firms we met there are differing investment strategies. Chrysalix, a clean tech-focused, ten-year old investment fund, looks for returning Chinese students and academics that are bringing back with them new technology ideas with commercial possibilities. In addition to providing capital, Chrysalix also helps nurture and manage the startups in which they invest, focusing, in particular, on protection of proprietary technology.
Tsing Capital, on the other hand, invests predominantly in early growth stage companies where the technology has already been commercialized with some initial product sales. They are not interested in basic technology still under development, such as Chrysalix. Moreover, virtually all of their investments are in foreign origin/owned technology (although frequently with some Chinese modifications). This also distinguishes their investment model from Chrysalix’ whose technologies are predominantly Chinese owned albeit by returning Chinese students.
Concluding thoughts
And finally, a sampling of some random thoughts from the consulting firms with which we also visited.
The clean tech mission participants – most of whom had not been to China before – were uniformly impressed by what they found there. For all the progress that China has made over the past thirty years – and no country in history has ever experienced more growth and development in such a short period of time – there is still a very long way to go, as we also discovered. But, in the area of most interest to our group, clean technology, China is on the way to becoming a world leader. For us, this presents both opportunities and challenges.
For more information, including the WSCRC’s trip to Chongqing, click here.
For more observations from the trip, please visit these links from the other organizers of the business mission and delegates.