Monday, 11 May 2009

China's cleaner coal surge

It was only yesterday that I was giving a lecture on the need for 'cleaner coal' investments in China's power infrastructure, to raise efficiency and reduce emissions. Today the New York Times reports that China has overtaken the United States in its quest for building more efficient coal power plants.

Although the average efficiency of the U.S. plants (40%) still exceeds China's (29-30%). The best plants can reach up to 44-45% efficiency, cutting emissions by a third. More interestingly, by scaling up the investments, China is managing to generate cost efficiencies as well: an ultra-supercritical plant now costs a third less in China than a low efficiency plant in the United States.

Of course, there are many other ways to improve efficiency as well. As the International Energy Agency reported on China recently, rational mining, modern management practices, matching fuel quality to users' specifications, and reducing losses during transport can deliver efficiency gains along the supply chain.

A point of contrast with India is that China's higher efficiency plants are coming on stream towards the tail end of a decade-long building boom. As the economy slows, the pace of new (more efficient) plants will also reduce. India is about to embark on a similar journey of huge investments in the power sector (its coal power capacity is about 87GW, which has to rise to 440 GW by 2032). India has a chance to upgrade to higher technology plants from now itself, rather than locking itself in poorer infrastructure for another three to four decades.

For both China and India to deploy cleaner coal technologies, we would need an international agreement that encourages investments in such technologies, and facilitates them with public-private partnerships and credible technology transfer arrangements.