China Energy FocusChina Energy Focus

First Issue

November 2009

Noether Associates

Table of Contents

Letter from Noether Associates…..………………………………………………………………......

Energy Leader Spotlight……….…………………………………..........................................

� GIGA chairman and A00 Architecture Director—An Interview with Raefer Wallis

SmithStreetSolutions Insight…………………………………………………………...................

� Hybrid Electric Vehicles (HEVs)

News………………………………………..………………………………………………………….……..…..

� Energy

− China’s Future Nuclear Power Plant Model

China Energy Focus

1st Issue November 2009 Noether Associates

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− China’s Future Nuclear Power Plant Model

− “Eat” Junk, “Vomit” Fuel

− Clean Coal = Clean Energy?

� Emissions

− Leading Up to Copenhagen - The Results of the United Nations Bangkok Conference

− China Leading the Race in Reducing Carbon Emissions?

� Cleantech

− Trading Technology for Entry into China’s Market

− No Oil in China’s Universal Car

� Policies

− Amending China’s Renewable Energy Law

− Zhejiang: 1% of all Energy from New Energy Sources by 2012

− Shanghai’s Hongkou District: Energy Saving Industry Chain

Upcoming Events……………………………………………………………………………………………..

About Noether Associates………………………………………………………………………….…….

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The world is now transitioning into a clean energy economy, and China is at the forefront of this

change. Our goal is to capture and deliver insight on China's economic activities surrounding

research and development in new (clean) technology, renewable energy, and policies that will

accelerate the growth of the China market.

In this month’s newsletter, article topics range from new biomass energy created from daily

urban waste to Zhejiang’s green energy practices that aim to have 1% of its total energy from new

energy resources by 2012. Our newsletter hopes to provide short and profound articles that

educate you on current clean energy topics in China. We go further to provide interviews with

leading experts on energy matters in China, as well as original research on energy related issues.

This month we bring you an exclusive interview with one of China’s leading green architects, Raefer

Wallis, whose carbon-neutral boutique hotel, URBN, is the first of its kind in China. Read on to find

out more!

China Energy Focus

O. Koo

Managing Partner, Noether Associates

Letter from Noether Associates

Noether Associates 1

The winds of change are coming to China

China Energy Focus

Canadian architect Raefer Wallis, principal

at A00 architecture firm, discussed the

challenges and opportunities of sustainable

design in China, and what going “green” means

to him. He told of his past sustainable projects

in China, his goal in future projects, and what

continues to drive him today. Sustainable

architecture in China continues to grow, and

the most important advice Wallis offers to

people who want to “go green” is to implement

practices incrementally and leverage what

other people have done. Wallis exemplifies his

own advice, and continues to incrementally

add new green materials or sustainable

practices in his own projects.

Long before Wallis moved to Shanghai, his

“Sustainability is a Western import, and for us it’s

linked with ecology. Saving the trees, saving the

animals, saving the rainforest. For the Chinese, it

(ecology) doesn’t mean much, it’s a low priority item;

here it’s all about health. What tipped the scales was

not an ecological event, it was a health event. In my

mind, that was the milk scandal, and then the chicken

and egg scandals.”

health, and the question of “compromised

potential.”

Taking a deeper look at China, sustainable

architecture trends differ in China from the

United States and other countries. In China,

the increase in attention towards sustainable

design began when health concerns became

an issue. Wallis comments on the difference in

trends in China by stating,

Energy Leader Spotlight

GIGA chairman and A00 Architecture Director—An Interview

with Raefer WallisBy: Krisanna Oopik

Noether Associates

Long before Wallis moved to Shanghai, his

interest in sustainable design was rooted in his

family values. Wallis states, “To be honest,

what inspired me to go green was education.”

Growing up in a family with parents who are

doctors, the importance of health was an

inevitable family value. Today, his two

motivations to remain green are children and

the daily impact the environment has on their

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Prior to these events, the Chinese media

approached Wallis for an interview with regards

to green topics once every three or six months;

after these health events, he was approached

once every week for an interview on the same

topic. Clearly demonstrating a correlation

between sustainable practices and health.

Raefer Wallis URBN hotel

and egg scandals.”

China Energy Focus

“GIGA was born in Shanghai on the 26th of April 2008 and became an

independent non-profit research foundation supported by the Western

China Human Resources Development Foundation.”

The growing awareness of

sustainable design in China has

helped to launch a platform for

sourcing green materials in China

called GIGA (Green Ideas-Green

Action), which allows people to

find available green materials in

China by using the transparent

and neutral GIGAbase. Following

his own strategy of incrementally

going green, Wallis would

introduce one green material or

concept in each of his projects.

However, each project turned out

to be a small research project in

learning how to define which

products were green and which

were not. In China, this can be a

Energy Leader Spotlight

GIGA chairman and A00 Architecture Director—An Interview

with Raefer Wallis

Noether Associates

challenge, because the qualifications for what makes a “green material” green is often not

transparent, and certified green products are usually Western and not Chinese based.

In the future, the Chinese government will have to take on a stronger role with regards to

sustainable architecture to promote the increased use of green materials in China. Currently, the

government does not provide any subsidies or policies to support developers with the initial cost of

green projects. The government mandates the Green Star System, one of two existing green

certifications for buildings in China, with the second being the LEED certification. The government is

showing more acceptance in sustainability by allowing a few buildings to link their solar panels into

the State Grid system, but this process requires copious amounts of paper work and requires a final

approval. It is a step in the right direction, though. Domestic Chinese companies will also increase

their production of green materials as demand increases, and the financial benefits become apparent

to their bottom lines. Overall, the future of green materials and sustainable architecture in China

appears to be promising, and will hopefully continue to flourish.

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were not. In China, this can be a

China Energy Focus

Hybrid electric vehicles (HEVs) are a hot topic today, with a growing demand and availability in

the market. HEVs reduce the use of petroleum fuel, and are one of the most popular clean energy

solutions for automobile consumers. SmithStreetSolutions conducted research on the market

trends and demand for HEVs, and concluded that while there is a growing demand, the demand is

not necessarily located in China. In 2008, 80% of HEVs global sales were in the United States and

Japan. However, Chinese manufacturers have launched their own plan to market HEVs in China, but

little interest has been shown thus far from Chinese consumers. The main reason for this lack of

interest is that there is no tax incentive for buyers in China, and the price is higher for an HEV

compared to a traditional vehicle. If the Chinese government adopted policies to subsidize the auto

manufacturers or provided tax incentives for consumers, the growth in the HEV market could be

profound in China.

One energy efficient car company; however, that is flourishing in China is BYD, a Chinese battery,

mobile phone, and electric car company. BYD received global attention when Warren Buffett and

Berkshire Hathaway decided to buy 10% of BYD last fall. In October, the BYD sedan (F3) became the

bestselling sedan in China, and BYD has recently started selling a plug-in electric car that can go

further than most other electric vehicles on a single charge, 62 miles, and can be bought for

$22,000.

SmithStreetSolutions Insight

Hybrid Electric Vehicles (HEVs)

Noether Associates

To find out more, please refer to the Noether Associates website for the research deck

correlated with HEVs research.

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Source: SmithStreetSolutions

BYD F6DM model at the North American International Auto show in Detroit, December 2008

China Energy Focus

State Nuclear Power in China worked jointly with the China Huaneng Group to build the first

advanced domestic pressurized water reactor nuclear power plant. The project, titled, “Third

Generation Nuclear Technology,” has inspired five of the top electric power companies to switch to

nuclear electricity. The project will be the first model project of its kind that will hopefully develop

later into more pressurized water reactor nuclear power plants. This innovative technology will

allow China to develop its own intellectual property rights in nuclear design, manufacturing, building

and operations, and to develop an overall standard for nuclear power development.

“Eat” Junk, “Vomit” Fuel

The Dajiang Group Shanghai Shende

Machinery Co. has created a new biomass

energy source from everyday waste materials

that will forever change the way we view “junk”

Source: Economic Information Daily, September, 2009

News – Energy

China’s Future Nuclear Power Plant Model

Noether Associates 5

that will forever change the way we view “junk”

or waste materials. In addition, they have

developed a facility and equipment that are

environmentally friendly to produce the new

biomass energy. The innovative technology is

described as being able to "eat" sawdust, straw,

rice husks, and forty to fifty other kinds of waste,

and "spit" it out as usable bio-fuels. Biomass,

granulated fuel, can be made through the

process of screening, crushing, drying, grinding,

and molding daily urban waste, such as sawdust,

straw, rice husks, and waste plastic film. The

waste materials, or second-generation bio-fuels,

used to produce this new biomass fuel are ideal,

since they do not require arable land or food

products used by humans. In the future, bio-fuels

will help maximize the reusability of waste and

may potentially replace resources such as coal,

oil, and other non-renewable energy sources.

Source: Jiefang Daily, September, 2009

Truck being hoisted up to dump out saw dust, which

can be used to make the new biomass fuel

China Energy Focus

Whether or not clean coal is a green energy

source is debated, since the process of cleaning

and transporting the coal can be viewed as a

polluting process. In China, Pu Hongjiu, the

Vice Chairman of the China National Coal

Association and Vice Director of the National

Energy Expert Consultative Committee, argues

that clean coal is an environmentally friendly

process and should be emphasized and

supported in the upcoming Twelfth Five Year

Plan for China. Coal, which China relies on

heavily as its primary energy resource, creates

an immense amount of pollution. Hongjiu’s

stance, however, is that coal can be cleaned

and reused after burning, and that we should

alter our view of coal as a polluting substance.

This proposed solution, however, is not yet

accepted by electric power companies in China,

Protestors rally against the use of coal

News – Energy

Clean Coal = Clean Energy?

Noether Associates

accepted by electric power companies in China,

as they are unwilling to purchase clean coal.

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Source: Energy magazine, September, 2009

It is hard to blame the electric power

companies, because the actual transportation

of the clean coal is an environmentally

unfriendly process. Pu Hongjiu insists that China

could implement the use of coal gangues to fill

coal mines, and reduce the impact of coal

mining on the Earth’s surface. Overall, the

emphasis of implementing clean coal in China’s

Twelfth Five Year Plan could have a drastic

impact on the future of coal use in China, and is

a topic to pay attention to in China’s upcoming

Five Year Plan.

The inevitable link between coal and power for China

China Energy Focus

October 9th was the conclusion of the

United Nation’s 4th International Conference

on Climate Change in Bangkok, Thailand. The

conference resulted in no significant progress

at the policy level, and there was a lack of

response in change from developed countries.

Developed countries were unable to present

any satisfactory proposals for changing their

own emission reduction targets, increasing

funds for climate change, or transferring

technology for programs in developing

countries. Additionally, there was little

response towards recommendations

proposed by developing countries on emission

reduction requirements, technology transfer

mechanisms, and other suggestions to benefit

programs in climate change.

Source: Xinhua News Agency, September, 2009

action from developed countries on reducing

emissions is that their overall emission is

much larger than those of developing

countries. Therefore, the pressure in reducing

emissions is focused primarily on developed

countries. China holds the same position as

developing countries in insisting that

greenhouse gas emissions from developed

countries be reduced 40% by 2020 based on

1990 emissions statistics. China has made its

own commitment to save energy and reduce

emissions through China’s National Climate

Change Program, which proposes reducing its

gross domestic GDP energy consumption by

20% by 2010 based on 2005 statistics, and

reducing other major pollutant emissions by

10%.

News – Emissions

Leading Up to Copenhagen - The Results of the United Nations

Bangkok Conference

The concern with the lack of response and

Noether Associates 7

Source: Xinhua News Agency, September, 2009

China Leading the Race in Reducing Carbon Emissions?

Experts are saying that China has exceeded the European Union’s emissions reduction targets. The

Chinese government has approved over 2,200 Clean Development Mechanism (CDM) projects

through September 2009, and China has successfully registered more than 640 CDM projects with an

emissions reduction of around 150 million tons. Yang Hongwei, director of the NDRC Energy Research

Institute Center for CDM project management, commented on China’s development by stating, “If all

2,000 projects could be registered successfully, the emissions reduction is expected to reach 20 billion

tons in the first commitment period. China’s CDM projects have made a great contribution to

promote global greenhouse gas emissions mitigation.” The International Energy Agency estimates

that if China achieves its proposed target of slowing down the emissions growth, that China will be

the country with the largest reduction in emissions by 2020.

Source: Daily Economic News, September, 2009

China’s power plants are a major contributor to carbon emissions

The concern with the lack of response and

News – Cleantech

China Energy Focus

The Chinese government’s concern about lacking innovation in domestic Chinese technology

companies has become apparent after a policy was implemented making it more difficult for

foreign companies to enter China’s market. Chinese technology companies currently lag in

development, and the fear that foreign companies will dominate China’s technology market is

becoming a reality. In response to this growing concern, the Chinese government has enacted the

“Market Entry in Exchange for Foreign Technology R&D” policy. The policy provides assistance to

China’s local market, and opens the barriers that prevent technology development in China from

benefiting from foreign technology R&D.

China’s local companies are suffering from the presence of foreign companies in the technology

market, therefore, the policy would require foreign companies to assist in China’s technology R&D

and provide a percentage of their profits from the Chinese market. Xiaolian, a scholar at the

American Economy Institute at China’s Academy of Social Sciences, commented that China should

not be reduced to buying or asking for technology only from the United States; there are other

countries that can supply equal or greater value in technology R&D. With the current global climate

crisis, the potential for controlled technology exchanged between countries is a viable option that

could be a possibility in the future for China. Overall, China hopes the US will reduce its technology

transfer costs, and China will continue to limit the number of foreign technology companies

entering the China market.

Trading Technology for Entry into China’s Market

Noether Associates 8

entering the China market.

With the current global climate crisis, the potential for controlled technology exchanged

between countries is a viable option that could be a possibility in the future for China. Overall,

China hopes the US will reduce its technology transfer costs, and China will continue to limit the

number of foreign technology companies entering the China market.

Source: Energy magazine, September, 2009

Discussing technology exchange between the US and China

China Energy Focus

News – Cleantech

No Oil in China’s Universal Car

Noether Associates 9

Source: China Petrochemical News, September, 2009

The rapid demand in China’s growing auto market calls attention to the need for an alternative

energy solution in the future. The growing demand for petroleum used by automobiles and

subsequent fuel shortages has become a common concern, and was voiced by Wang Binggang, an

expert team leader in energy saving and new energy auto project, at China’s Second Green Energy

Automotive Development Summit Forum. Wang Binggang stated, “We cannot rely on petroleum in

the coming popularization of automobiles in China. We must develop new energy to meet the

coming energy needs.” Resource constraints are only one part of the problem for China, the other

being the stock quantity of cars.

China’s future demand in the auto market contrasts from previous market demands in Europe or

America in that a growing resource crisis and vastly larger demand in the market are being

experienced simultaneously. China’s 450 million cars only amount to half of those in Europe, but

this number will continue to increase. In order to meet the growing demand and resource

constraints for China’s energy market, developing new energy solutions is required. Research on

China’s auto market is already being explored, but the question is how these benefits will have

global impact.

Wang Binggang speaks at China’s Second Green Energy Automotive Development Summit Forum

The completed draft of China’s Renewable Energy Law is positive in enhancing support for policies

in wind, solar photovoltaic, and other energy related industries, but it fails to include the solar

thermal industry. Huang Ming, a solar energy industry leader in China, appealed to the National

People’s Congress to not overlook the importance of developing the solar thermal industry in parallel

with the solar, photovoltaic, and wind power industries. China’s solar thermal market is the largest in

the world, and its technology is more enhanced than that of China’s photovoltaic and wind power

industries. There are 6,000 enterprises in China associated with the solar thermal industry, and with

the number of enterprises increasing, it is essential for a set of standards for the industry to be

implemented and mandated. The solar thermal industry is competitive globally, and if China chooses

to ignore this industry in its Renewable Energy Law, the country may face drastic consequences, such

as losing its global advantage in thermal solar power.

China Energy Focus

Source: Zhongxin, September, 2009

Zhejiang: 1% of all

Energy from New

News – Policies

Amending China’s Renewable Energy Law

Noether Associates 10

Energy from New

Energy Sources by

2012

Zhejiang Province, a coastal

province to the south of

Shanghai, has implemented the

“6+1 Program”, which will

accelerate the popularization

and application of new energy

sources in the province.

Source: China Energy Network, September, 2009

Solar Panels in Zhejiang

Specifically, this will involve the implementation of one million rooftop power generators, 100 MW

of wind power, one million square meters of solar water heaters, 100 road solar lights, and one

million square meters of ground source (water) heat pumps and air-conditioners. The goal by 2012

is to have over 1% of the province’s energy consumption from new energy sources, and a total of

350 MW of new energy generating capacity, with 50 MW from photovoltaic power and 300 MW

from wind power. The solar water heaters will cover an area of over 10 million square meters, with

ground source (water) heat pumps and air conditioners covering an area of over 5 million square

meters, and will have an annual output of 100 million cubic meters of methane. The large-scale

implementation of green energy in Zhejiang Province provides a platform for future guidelines for

implementing similar energy projects in other Chinese provinces.

China Energy Focus

Source: Jiefang Daily, September, 2009

Shanghai’s Hongkou District aims to

connect the district’s energy saving industry

within the next 3 to 5 years. The district’s

location, in downtown Shanghai, has ideal

resource advantages for energy saving

projects with old-style buildings and

factories in the area, which has attracted

many environmentally friendly enterprises to

take part in their reconstruction projects. In

the first half of 2009, the revenue of

Hongkou District’s new Energy Saving

Industry reached $200 million. The services

available in the Hongkou area include R&D

energy-saving and environmental protection

technology, monitoring and diagnostics,

engineering design and operation, energy

consulting, energy management, and energy

related trade and financial services. In May, a

The Hongkou District government will allot

specific funds for energy-saving and emission

reduction projects. In addition to direct

support, there will also be new policy

guidelines. Recently, 30 buildings were listed

on an energy-saving plan and began

cooperation with the Shanghai Environment

Energy Network. It is estimated that in the

next 5 or 6 years, the annual value of energy-

saving industries in Hongkou District will reach

$2 billion. These organizations help make

Hongkou a promising environment for

improving energy efficiency in Shanghai.

News – Policies

Shanghai’s Hongkou District: Energy Saving Industry Chain

Noether Associates 11

related trade and financial services. In May, a

cleantech industry park was formally opened,

and has become the home of both national

and municipal-level energy-saving

organizations, such as the Shanghai

Environment Energy Network, Shanghai

Energy Efficiency Center, and the Shanghai

Science Exhibition Hall. The park has built a

service platform offering: exhibition,

integration, distribution, and services.

The Shanghai Environment Energy

Network will focus on the exchange of

technology regarding energy emissions in

property, while the Shanghai Energy

Efficiency Center will take the responsibility

of encouraging energy management and

energy-saving production, communicating

energy efficiency information, providing

consultant and research services, and

executing government projects.

Shanghai-taking the lead in energy savings

November 2nd- 3rd China Clean Energy Summit

Beijinghttp://www.cleanenergychina.org

November 5th Chongqing International Construction

Summit

Chongqinghttp://construction.com/events/Chongqing09

November 11th- 13th 2009 International Polysilicon and

Photovoltaic Industries Summit

Huainanhttp://www.chemevent.com.cn/chemevent/html/article_178.html

November 18th-20th 2009 International Photovoltaic Solar Energy

China Energy Focus

Upcoming Events

November 18th-20th 2009 International Photovoltaic Solar Energy

Conference and Exhibition

Beijinghttp://www.china5e.net/conference/meet.php?id=505

November 18th- 20th The First China International Clean Energy

Technology and Equipment Exhibition

Beijinghttp://www.21ce.cc/2009/04/10/20090410135826399078.html

November 24th-27th GreenBuild China 2009

Shanghaihttp://www.beaconevents.com/2009/GreenBuildingsAsia/en/Home/in

dex.jsp

November 25th- 26th Clean Energy Trends Asia 2009

Shanghaihttp://www.cleanenergysummit.net/count/default1.asp

Noether Associates 12

China Energy Focus

Noether Associates is a leading Shanghai-based energy consultancy with

expertise in the China energy market. We seek to drive change through

our energy insight by empowering companies to make energy and cost-

About Noether Associates

Noether Associates 13

our energy insight by empowering companies to make energy and cost-

efficient decisions, regardless of size or industry. Our energy experts

provide emissions analytics across industries, and knowledge on how

energy is generated, distributed, and consumed, enabling your company to

make smarter decisions. Our services extend further to provide both you

and your customers sustainable designs to make your products greener.

For more information, please refer to our website at

http://www.noetherassociates.com