The “iCET News Express” section provides updates on the progress of some of our exciting programs. We hope you enjoy these updates in addition to the regular news briefing we offer.

iCET visited partners in Northern California.

Feb.16th – Feb.19th, 2010, Dr. Feng An and Dr. Yufu Cheng took a four days trip to Northern California for meeting partners and discussing potential collaborations. Organizations that were visited include Hewlett Foundation, Hewlett-Packard Company, Electric Power Research Institute (EPRI), Terra Global Capital, Energy Foundation, Pacific Gas and Electric Company (PG&E), ClimateWorks Foundation, International Council on Clean Transportation (ICCT), California Energy Commission (CEC), and The Institute of Transportation Studies at UC Davis (ITS-Davis). Dr. Feng An and Dr. Yufu Cheng introduced iCET’s current project status, and discussed issues with partners on work areas as well as potential collaborations. Particularly, Walter Reichert, Director of International Trade Development of Hewlett-Packard showed strong interests in iCET’s Energy and Climate Registry and suggested the HP-China to get involved in this project. Mark Duvall and Mark Aelxandra at EPRI have expressed willingness to joint efforts with iCET in China to work on electric vehicle power grid impact analysis. Dr. Feng An and Dr. Yufu Cheng also met the newly appointed CEC commissioner Anthony Eggert and his advisor Dr. David G. Hungerford to update them various iCET projects.

^{General Energy
Issues}

China draws up plans for national renewable energy center

February 10 (China Daily) - China plans to build a national renewable energy center to further support development of the industry, an energy official said yesterday.

The center will be responsible for policy-making, key project and program management, market and industrial operations, database and information platform establishment and international exchange program coordination, Han Wenke, director general of Energy Research Institute under the National Development and Reform Commission, said yesterday.

The establishment of the center is still in the preliminary planning stages, Han said at the launch of the Sino-Danish Renewable Energy Development Program.

The Danish government will invest 100 million Danish krone (130 million yuan) in the program, which is slated to last until 2013.

The combination of Denmark's sector experience and China's strong economic position offer a good starting point for the program.

"The project is set to combine the advantages of the two countries and promote renewable energy development fast and well in China," said Danish Minister of Climate Change and Energy Lykke Friis.

Some Danish companies have already made large financial commitments to China. Vestas, a world leader in wind power equipment manufacturing said last year its investment in China would exceed 3 billion yuan by the end of 2009. The company's rapid growth in the country is in line with the strong growth of China's wind energy sector, according to the company.

China made great progress in renewable energy growth last year. It accounted for 7.5 percent of the country's primary energy consumption in 2009 - or the equivalent of 230 million tons of coal, said Liu Qi, vice-director of the National Energy Administration.

"No matter what happens with international climate change negotiations, reducing fossil fuel consumption and developing renewable energy will be the best way to ensure a secure energy supply," said Liu.

"The target of reducing carbon intensity by 40 to 45 percent in 2020, based on 2005 emissions, will depend more on the development of renewable energy," he said.

China has become the third largest producer of wind power in the world and is responsible for around 40 percent of the output of the world's solar photovoltaics.

Photovoltaics or PVs are arrays of cells containing a solar photovoltaic material that converts solar radiation into electricity.

Renewable energy is helping China complete its economic transformation and achieve energy security, said analysts.

http://www.chinadaily.com.cn/bizchina/2010-02/10/content_9456628.htm

China issues rules on maritime wind energy projects

February 10 (Xinhua) - China has issued regulations on the development and construction of offshore wind power projects in a bid to promote reasonable use of sea space and resources and better protect oceanic environment.

The regulations, jointly issued by the National Energy Administration and the State Oceanic Administration (SOA), include 38 articles in ten chapters, according to a statement released Tuesday by the SOA.

The rules specify procedures and requirements for the planning of offshore wind energy developments, the authorization of such projects, the application and approval of the use of sea space, and construction verification, among others.

The rules stress that projects should be based on the principles of planning before major construction starts.

According to the regulations, energy departments at provincial level will be responsible for drawing up plans for local offshore wind energy development, while oceanic departments at the same level should provide initial opinions on the plans regarding the projects' impact on the ocean environment.

Such projects should be conducted according to reasonable distribution and sparing use of sea areas, the rules said.

In addition, projects may only be started after being verified by authorities and the obtaining of rights for the use of the sea space.

When it comes to uninhabited islands, projects should also receive certificates of island use, according to the procedures set out by the law of island protection.

The rules also require project principals to report on project's environmental impact with submissions to the oceanic administrative department.

http://www.china.org.cn/environment/2010-02/10/content_19402554.htm

China's shining light in the energy challenge

February 22 (China Daily) - XINYU: Entrepreneur believes 60 percent of the world's power will come from the sun 100 years from now.

Peng Xiaofeng is not one to be deterred from his personal mission by the heavy rain pouring down outside his office.

It might be a dreary day in Xinyu but the 34-year-old insists solar energy will provide 60 percent of the world's energy supply in 100 years.

The modest and quietly spoken chairman and chief executive officer of LDK Solar, one of China's leading solar energy companies, insists sun power will eclipse coal, gas and oil in the 22nd century.

One of China's leading young entrepreneurs and listed by Forbes magazine as one of the 500 richest men in the world, he believes people consistently underrate this natural form of new energy.

China's solar power usage currently barely registers above zero as a percentage of total energy sources.

"In 100 years, my view is that 60 percent of the world's energy will come from solar power," he said.

"This is not an optimistic prediction. The European PhotoVoltaic Industry Association (one of the solar energy industry's main trade bodies) puts the figure at 80 percent."

Because of their current marginal status, it is all too easy to dismiss new energy sources as something of a sideshow to ease climate change fears.

Renewable energy target

The Chinese government, however, wants 20 percent of the country's power to be from renewable energy (of which hydro will be a major part) by 2020.

Peng insists people fail to realize existing energy sources, oil in particular, are going to run out.

"Oil, maybe, has 50 years, I don't know. That is because it is not very renewable. It is also going to get more expensive. Even with the background of a financial crisis like now, its price has gone back up to $81 a barrel," he said.

LDK has had something of a torrid time itself recently. Its shares on the New York Stock Exchange initially soared to nearly $70 from their initial flotation price of $27 in 2007 but have since slumped to just a tenth of their peak value at around $7.

With Peng owning around 70 percent of the equity of the company, this has put a considerable dent in his personal fortune, although he still retains major private interests.

In December, the company went back to the NYSE and has raised a further $122 million, using around $90 million of the proceeds to pay back short-term debt as well as develop other aspects of the business.

"The economic crisis has affected everybody and, in particular, solar energy. Many projects have been delayed, mainly because of the problems in getting bank finance," he said.

"The main reason we were impacted was that the decreased price of raw materials brought down the price of silicon products. So, although our sales volume was still increasing, revenues were lower because of the lower unit price."

He points out, however, despite stock market nerves the company is still the world's largest maker of solar wafers and has increased its global market share from 11 percent in 2008 to 18 percent now.

"The company's market share is increasing, our cost leadership is getting stronger and we are placing a great deal of emphasis on technological innovation this year," he said.

You have only got to drive around Xinyu to see how much depends on Peng's efforts.

The city in Jiangxi province is now known as 'Solar Power City'.

Around 80 percent of LDK's 14,000 employees are from the city itself. The presence of LDK has also generated a cluster of other companies from processing raw materials to all other aspects of solar power engineering.

LDK has also established schools to train people to work in the solar power industry and it has also contributed towards the city's infrastructure, including helping fund the main Saiwei Road.

Peng is aware of the important role LDK plays in both local society and the economy. Like many of China's entrepreneurs he sees himself as part philanthropist.

"This is a very small city and we bring a lot of jobs to it. It is my home province and the local government is also very supportive of the solar energy industry," he said.

Peng, who likes to be referred to by his nickname "Light", comes from a rural area of Jiangxi province and is the son of a local doctor.

At school he was interested in science, particularly physics, prescient for his future involvement in new energy.

"When I was at school I was always reading books about light, which is where I got the nickname from," he said.

"My dream was to study physics in the United States. At the time the role model for a lot of young people in China was (Thomas) Edison (the American inventor of the light bulb)."

To achieve his dream, however, he needed to learn English and the only place he could study was at Jiangxi College of Foreign Studies in Nanchang, where he read for for a diploma in international trade.

"There were not many places to learn English and I chose to do this diploma," he said.

While many students often seek such courses as a means to an end, Peng took the qualification literally and on graduating decided to set up his own international trading company with just 20,000 yuan ($2,928) of savings.

In 1997, with China products now in demand throughout the world his timing to start a business couldn't have been better.

His company, Suzhou Liouxin Industrial Group, began to locally manufacture and sell protective products such as safety gloves, jackets and shoes.

"I set up the company by renting an office and buying a fax machine and just learning about international business and how to sell China products overseas. At the time it was very profitable to sell China products."

The business was a spectacular success, soon hitting sales of $7 million and within a few years $200 million.

Instead of having a rented office and a fax machine, he now had a staggering 10,000 employees. He was wealthy.

For many people this would have been enough but Peng felt low-tech manufacturing was somewhat limiting.

He had completed an MBA at the Guanghua School of Management at Peking University on an entrepreneurs program, which had widened his ideas about business.

"It helped me see the bigger picture. It gave me more knowledge about finance, about marketing and about strategy. You also get to know more people from fellow students to professors and so you can bounce ideas off people," he said.

Then came the idea to move into solar power, which was inspired by a trip to Europe.

"I used to travel a lot in Europe at the time and there was a lot of interest in green energy, particularly in Germany. I realized this was a business for the future and a big opportunity to start a business in China," he said.

He spotted there was a shortage in China of companies producing multi-crystalline wafers, the light sensitive tiles which capture light and turn it into usable energy.

"There was a big shortage in the wafer market and at that time wafers were about 70 percent of the cost of producing solar energy," he said.

Private equity investment

He decided to invest $30 million of his own money to launch the business in 2005.

He then had three rounds of private equity investment injecting a further $100 million. The business also had support from the local government.

"It was doing the MBA which taught me about raising capital, whereas my previous business very much generated its own capital," he said.

Two years after starting the business it was floated on the New York Stock Exchange.

"We first targeted a listing on NASDAQ but the NYSE came to us and we were qualified to list on the exchange. We thought strict US company governance would give investors confidence in the business and would be good for long term growth," he said.

"A lot of our investors are now from around the world, from the UK, Frankfurt, Switzerland and Japan."

Having a listing overseas has given Peng a high profile and he is regularly written up as one of China's young billionaires.

Apart from the Forbes listing last year which recorded him as the 462nd richest person on the planet, estimating his personal fortune at $2.5 billion, he has also come to the attention of Fortune magazine.

It listed him as 23rd of 40 of the "hottest business stars" under the age of 40 in the world.

In the same list, Facebook founder Mark Zuckerberg was second, News Corporation's James Murdoch was third and golfer Tiger Woods, before recent tribulations in his life, was placed sixth.

Peng does not think he is part of some new homegrown Chinese business talent that is going to take over the world any time soon.

"If you look at the young entrepreneurs on that list, only two are from China. Most of them are from Russia, the United States and elsewhere. I think people of the younger generation have a similar chance from anywhere," he said.

He acknowledges, however, that the opportunities for young entrepreneurs in China have never been greater.

"We are very lucky in this generation, especially, say, compared with the opportunities my parents had. We have greater access to education, the chance to meet people in Europe, the US and internationally. You also have the benefits of globalization, access to foreign capital and to buy equipment and bring in expertise from such countries as the US, Germany and Japan," he said.

China is now one of the major world centers for solar power.

Apart from LDK, Suntech, based in Wuxi city in Jiangsu province, is a leading player, as is GLC-Poly, which is also based in Jiangsu province.

The future of solar power is still dogged by questions about its cost. Oil, depending on its current price, costs around 5 cents to produce a kilowatt hour (KWh) of energy, coal between 4.8 and 5.5 cents and gas between 3.9 and 4.4 cents, whereas solar power can cost as much as 30 cents per kilowatt hour.

Peng says the cost is being driven down all the time as the technology improves.

"If you go back 50 years it used to cost about $500 per KWh. In China now it is already down to 20 cents," he said.

Still only in his mid-30s, Peng has every intention of being around when the age of solar power finally dawns.

"I want to focus on the solar power industry continuously into the future since the industry is large and emerging. I am sure the sorlar power will be one of the leading future technologies," he said.

http://www.chinadaily.com.cn/bizchina/2010-02/22/content_9483880.htm

China's wind energy industry sees challenges

February 22 (China Daily) - Number of producers has increased from six in 2004 to more than 70 today.

Businessman Xu Zhichun's plans were thrown up in the air when demand for the wind turbine blades his company made suddenly crashed.

The vice-general manager of Tianjin Dongqi Wind Turbine Blade Engineering Co discovered few any longer wanted the 37.5-meter blades that were popular two or three years ago.

"We were caught unprepared," said Xu. "The blades do not work as well as we thought, and we had to step up production of longer blades."

Now the company makes blades that are 40.3 meters long and production rates have been increased to meet demand. "We produced one blade in 36 hours in the past but now we have to make one per day," said an employee in the workshop.

Tianjin Dongqi is a unit under Dongfang Electric Corp (DEC), a major State-owned power equipment manufacturing company. The company is one among many blade-making enterprises, which invested a lot in the 37.5-meter blades but are now faced with a change in demand.

The problem can be traced back to 2007 and 2008 when companies rushed into the wind power industry.

"Many companies didn't have a deep understanding of wind power at that time," said Xu. "And the government, although it drew up favorable policies, didn't come out with a clear plan for the industry."

There were only six wind turbine makers in 2004 across the country. That number increased by more than 10 times to more than 70 last year. Similarly, installed wind power capacity was 760 megawatts (MW) by the end of 2004, and it surged to over 20,000 MW in 2009, making China the third largest wind power market in the world.

Inadequate research and lack of planning has led the industry to expand dramatically but at the expense of quality. Take turbine blades for example. About 70 percent of the blades in the market are 37.5 meters, which are not long enough to generate anticipated electricity levels, according to Xu.

"This echoes what most people call overcapacity," he said. "It's actually excess capacity of products that don't fit the market well."

Radical expansion has brought another problem: makers of both turbines and parts have seen their profits slump in recent years.

"It's like taking a roller coaster: We are falling all the way from the top to the bottom," said Xu.

Prices of turbine blades have decreased by about one third compared with those in 2004. Profit margins in some companies were 25 to 30 percent in 2004, but now the figures are just about 10 percent, said an industry insider.

"We are not losing money, but not making much profit, either," said Liang Xiaobing, deputy- general manager of Dongfang Electric (Tianjin) Wind Power Technology Co, a turbine-making unit under DEC.

For a 1.5-MW wind power turbine, the price for every kilowatt was around 6,000 yuan at the beginning of 2009, but now it has declined to below 5,000 yuan, said Liang. The decrease in price in the wind power industry is partly due to the fact that some companies, especially small ones, sell their products cheaply at the expense of quality, said some insiders.

Technology upgrade

Some leading Chinese equipment makers that have gained an edge in the market are now stepping up efforts to improve the technology in order to fend off the effects of radical expansion in the wind power industry.

Sinovel Wind Group Co, which has the largest share in the domestic wind power equipment market, is one of them. The company is now building a national offshore wind power technology and equipment research and development (R&D) center, which was approved by the National Energy Administration in January.

The center will conduct studies into technical difficulties challenging offshore wind power development in China. Sinovel aims to develop the center into a world leader.

Sinovel started construction of a manufacturing base for its 5-MW wind turbine in Yancheng city in Jiangsu province in January. The project, with a total investment of 1.5 billion yuan, is expected to come on stream at the end of this year. It will involve the production of 5-MW offshore and near-shore wind turbines.

"Improvement in technology is vital to our future," said Han Junliang, president of Sinovel. "The Chinese wind power industry is in urgent need of advanced technology."

At present among the 70 domestic wind power equipment producers, less than 10 have a large-scale R&D capacity. These companies will form the mainstream of the domestic wind power industry, according to Han.

"As for Sinovel, we aim to become among the world's top three in three years," said Han. Last year the company produced 2,400 1.5-MW turbines and 100 3-MW turbines, making it top in terms of output in China.

"I think the so-called overcapacity just refers to those small players with outdated technology. There will be more consolidation in the domestic wind power sector," he said.

Echoing Han's views, Wu Gang, chairman of Goldwind Science & Technology Ltd, another top wind turbine manufacturer in China, said his company would consider acquiring small firms when the industry enters a consolidation phase.

The company is also looking at markets in the US, Australia, Central Europe and Africa, either by investing in local wind farms or by selling products, said Wu.

"We expect overseas markets to account for 20 to 30 percent of our business over the next three to five years," he said. Goldwind is also focusing more on developing larger wind turbines, including 3- and 5-MW wind turbines, he added

Today Chinese wind turbine producers account for around 70 percent of the domestic market. Some foreign companies are now offering more tailor-made technology to the market in order to achieve further success.

Vestas, the world's leading wind energy company, unveiled a new turbine tailored for the Chinese market, the V60-850 kilowatt turbine, last year. It received its first order for the product from China Datang Renewable Power Co last December.

"China is a unique country with great variations in geography and weather conditions," said Jens Tommerup, president of Vestas China.

"This is why we developed a wind turbine which can deal with such challenges. The fact that Datang has chosen the V60-850 kilowatt shows the need for reliable and proven technology to ensure maximum productivity and a scientific approach to harness the most value out of the wind."

China recently dropped a rule stipulating that more than 70 percent of the wind turbines used in the country must be made domestically. Analysts said the move would trigger more competition in the industry.

The move would help the development of the country's wind power industry and establish an open market of rational competition, Chine Business News said in a report, citing a statement sent to local governments by the National Development and Reform Commission, the country's top economic planning agency.

The move will result in fiercer competition between Chinese and foreign companies, but it will also boost cooperation between them, said an analyst who declined to be named.

"This is not a major issue for Vestas," said Andrew Hilton, spokesman for the Danish company in China. "Our global strategy is to produce where we sell, so this development will not have an impact on our production of wind turbines in China."

"Our goal has always been to localize our production as much as possible. The turbines made in our Chinese factories currently consist of more than 80 per cent local content and our goal is to increase this."

http://www.chinadaily.com.cn/china/2010-02/22/content_9481836.htm

'Clean' coal power to go online next year

February 24 (China Daily) - China's first self-developed integrated gasification combined cycle (IGCC) power station is scheduled to go online in Tianjin next year, joining an elite group of such efficient power plants in the world.

Construction on the 2.1 billion yuan facility began last July. When completed, it will be among the most efficient coal-fired power stations globally, with a more than 99 percent rate of desulfurization and much lower emissions of carbon dioxide and nitrogen oxide.

"Compared with an ordinary 300,000 kWh coal-fired power plant, the model IGCC power station with 250,000 kWh capacity reduces coal consumption by 70,000 tons annually, and its carbon dioxide emissions will be just one-tenth of a standard plant," said Wu Ruosi, deputy general manager of China Huaneng Group, which initiated the project.

IGCC technology greatly increases generating efficiency with close to zero pollutant emissions, Wu said.

Seen as the world's most green coal-fired power generation technology, IGCC extracts the maximum energy from fuel by using both gas and steam.

There are currently only 10 IGCC power stations of the same scale globally. Most of them in Europe and the United States.

Wang Yanjun, deputy director of Huaneng Group, said that the green technology will not only be applied to new power plants but also can help nearly 60 domestic existing gas-fired power plants.

The Tianjin IGCC project is a major part of the Green Coal Power Program initiated by Huaneng Group in 2004.

Huaneng Group, in cooperation with other seven large State-owned enterprises involved in power generation, coal resources and investment, jointly founded a company to implement the program.

With leading-edge proprietary technologies, the program is aimed at popularizing clean coal solutions nationwide.

While collecting and treating carbon dioxide, the frontier technologies highlight coal gasification for generating hydrogen, hydrogen gas turbine combined cycle power generation and fuel cell power generation.

The key technologies of the program are listed in national plans for medium and long-term development of science and technology.

One of the key IGCC technologies, use of pulverized dry coal for gasification under pressure, was independently developed by Xi'an Thermal Power Research Institute, whose holding company is Huaneng Group.

In addition to use in domestic coal projects, the proprietary technology has already entered the international market.

The institute signed a coal gasification technology licensing agreement on a 150 mW IGCC project in Pennsylvania with US Future Fuels Co in July 2009, a first for China's self-developed IGCC technology.

http://www.chinadaily.com.cn/cndy/2010-02/24/content_9492520.htm

China runs first sugarcane-leaf power plant

February 28 (Xinhua) NANNING: China's first power plant using sugarcane leaves has been put into operation in south China's Guangxi Zhuang Autonomous Region.

The factory, annually using 200,000 tonnes of agricultural wastes including sugarcane leaves and tree barks to generate electricity every year, started production in Liucheng County Friday.

The station has an annual capacity of 180 million kilowatt hours and can cut the emission of 100,000 tonnes of carbon dioxide, 600 tonnes of sulfur dioxide, and 400 tonnes of dust compared to coal-fired power plants with the same efficiency.

Farmers had been burning straw and sugarcane leaves in the field, causing severe air pollution and causing 70 percent of fire accidents in the county, said Wu Jiguang, the plant manager.

The plant purchases sugarcane leaf from farmers at a price of 120 Yuan per tonne, Wu said.

Guangxi has eight million tonnes of usable sugarcane leaves every year, which can provide materials for about 38 such plants, he said.

http://www.chinadaily.com.cn/china/2010-02/28/content_9514512.htm