As black goes out of fashion, green is in

Company continues to MINE coal, but looks to a future where other energy resources are much more profitable as well as environmentally sound

For years, Shenhua Group, China's largest coal mining company, has made money by digging up hundreds of millions of tons of coal and selling it to produce energy across the country.

But as China, the world's largest emitter of carbon, tries to reduce such emissions - a great deal of which come from burning coal - and rely more on clean energy, Shenhua is changing tack as it falls into line by taking new measures.

"The big thing at the moment is technological innovation in the energy sector, which is going to pave the way for a low-carbon future," says Chen Jie, director of the solar energy center of Shenhua's National Institute of Clean and Low Carbon Energy.

In recent years the company has put a lot of effort into promoting technologies in two key areas, he says, coal conversion and utilization, and renewable energy.

It has done a lot of that work through the National Institute of Clean and Low Carbon Energy, set up in 2009 with the aim of cutting carbon emissions, making coal use more efficient and developing other, cleaner technologies such as wind and solar power.

A report says about 1 billion yuan has been poured into the project, covering costs such as laboratories and research centers and recruiting world-class scientists and researchers.

Chen, who is also director of the Beijing Engineering Research Center for Nanostructured Thin Film Solar Cells, says changes in the way Shenhua operates are also aimed at heeding the government's call for business to adapt to the so-called new normal of economic growth, with an emphasis on mid- to high-speed growth that costs less and is more efficient.

"The fact is that there will continue to be increasing demand for energy, which means the only way forward is to innovate and improve energy efficiency," Chen says.

"Our company has to pay close attention to big issues such as carbon emissions and climate change, fitting in with the government's strategy and looking at developing a coal-based low-carbon energy system."

Such a strategy reflects China's determination to develop cutting-edge technology to obtain its energy from more renewable energy sources.

China, which is also the world's largest energy consumer, has long relied on coal-fired power plants to provide electricity. In 2009 it consumed almost as much coal as the rest of the world combined.

But mounting pressure caused by air pollution coupled with slowing economic growth has prompted the government to push for less reliance on coal and more on non-fossil fuels.

The effect of that transition is being felt by cash strapped coal companies. The China Coal Industry Association says that last year seven out of 10 of the country's coal companies ran at a loss, and those that managed to keep their heads above water did so by the thinnest of margins.

Shenhua says its profit was 36.8 billion yuan last year, 19.4 percent less than in 2013. China National Coal Group Corp says its profit was 767 million yuan last year, 78.6 percent less than in 2013.

Li Junfeng, director of the National Climate Change Strategy Research and International Cooperation Center, says de-carbonization in China's energy sector has become a trend as the country increases the onus on companies to reduce emissions.

"In addition, there is also great market potential for new energy technologies, and there is more investment in the sector."

China, the world's top wind power market, added 19.8 gigawatts of wind turbines to the grid last year. It also added more solar panels than any other country.

China is now the world's biggest investor in renewable energy. It has spent a total of $56.3 billion on wind, solar and other renewable projects and was ranked No 1 in renewable energy investment in 2013, a report by the Renewable Energy Policy Network for the 21st Century says.

Shenhua's present aim is to generate at least 6 percent of its total power using renewable energies such as wind and solar power, and more than 290 research fellows at the National Institute of Clean and Low Carbon Energy are looking at ways to capture emitted carbon dioxide and store it for future use.

Last year Shenhua installed electricity generation of about 110 mW of wind power, but solar power accounts for a small part of total generation, leaving a lot of scope for the photovoltaic power sector to grow, Chen says.

"Solar technology is making great strides, and commercialization will soon be a reality."

Chen's laboratory is now studying an advanced technology of thin film solar panels in which the patent nanostructured materials are used to improve efficiency by more than 10 percent and reduce module costs as well.

"Compared with traditional silicon-wafer-based solar panels, this type of solar panel has a better low-light performance and a higher annual power yield, so using it can increase return on investment."

Apart from developing cleaner energy, Shenhua has been conducting pilot programs on carbon capture utilization and storage, through which carbon dioxide can be prevented from entering the atmosphere.

More precisely, workers have to heat, pressurize and process coal into diesel and other kinds of fuels, leaving liquid carbon dioxide as a byproduct, which is then transferred elsewhere then pumped into a well, where it is stored.

Other energy companies such as the state-owned utility company Huaneng are also developing technologies on capturing carbon for coal-fired power plants.

Huaneng signed an agreement last year with the US company Duke Energy Corp for a study to determine the feasibility of applying Huaneng's carbon capture process at Duke Energy's coal-fired power plant in Indiana, said a report by Environment & Energy Publishing, a daily online publication of energy policy and markets.

Huang Qing, Shenhua Group's board secretary, said during an energy innovation forum in 2013 that there are no very effective ways to deal with large carbon emissions.

Carbon dioxide is a key to the photosynthesis of plants, he says, and if technologies are eventually invented it will be a valuable resource for the world.

At the same time, energy experts say China should consider raising natural gas imports by pipeline and using liquefied natural gas to replace some coal, as they are traditional fossil fuels that emit less carbon dioxide.

Lu Jianzhong, deputy director of the Research Institute of Economy and Technology, part of the China National Petroleum Corp, says natural gas will be the fossil fuel whose use grows the most in the country over the next 20 years.

"We can expect more international collaboration, and we need to give private capital more access to the sector."

Though coal is considered one of the main causes of the polluted air that plagues many Chinese cities, it remains the country's dominant energy source.

Last year China used about 3.7 billion metric tons of coal, which accounted for 66 percent of the country's energy demand.

Since last year Beijing has shut down three big coal-fired power plants in the city in a move to reduce air pollution, the municipal commission for development and reform says.

All other coal-burning power plants in the city are being phased out, and the aim is for all to have been shut down by the end of next year. Four gas-fired power plants are now being built, and they are expected to help reduce coal use by 9.2 million tons a year when they go into operation.

lvchang@chinadaily.com.cn

(China Daily European Weekly 04/17/2015 page16)