Striving for Energy Efficiency, Duke Energy in China
   2012-10-30 18:15:38      Web Editor: Yihang

By Stuart Wiggin

At a time when environmental concerns are building both within the Chinese central government and in the society at large, Duke Energy, the major player among US utilities, is currently working alongside Chinese energy giants in an effort to improve energy efficiency within both countries. Environmental pollution and uneven distribution of coal resources have left China with major ecological and environmental problems as it relied on coal for 77 percent of its primary energy production last year. Following the first coal value chain exchange held in Beijing, organized in conjunction with the Carnegie Endowment for International Peace and the BP Tsinghua Clean Energy Research and Education Center, CRI was able to sit down and talk with David Mohler, the Vice President of Duke Energy, to talk about the collaborative efforts and explore what successes have been achieved.

China leads the world in clean energy technology manufacturing and the speed at which they are developing and rolling out such technologies provides companies such as Duke Energy with a unique opportunity to contribute expertise, share risk, and benefit from the achievements by eventually transferring the technologies to the domestic US market. As Mohler pointed out, the relationship involves an ongoing "conversation with some of the major coal players in China, companies like Shenhua, and some that are active in the space like CNOOC." That conversation, according to Mohler, is "mostly a dialogue around how coal itself as a commodity can be treated, processed and utilized in ways that are cleaner. But Duke's fundamental focus is on power generation, so we're really more interested in clean combustion per se than in the treatment of the coal or utilization of the coal for other things."

Essentially, Duke Energy is concerned with the generation of electricity in a way that is clean. In this sense, the perception of "clean coal" at Duke ties in with the comments of Hu Zhengqi, director of the Institute of Land Reclamation and Ecological Restoration who spoke during the coal value exchange. Hu noted that the Western concept of "clean coal" mainly refers to energy efficiency whereas "clean coal" in China takes into account environmental degradation, rehabilitation and treatment; factors that are incredibly important to the Chinese coal industry in a wider social and environmental context.

When asked about the difference between the western and Chinese understanding of "clean coal", Mohler posited that in the engineering and technical communities of both countries, the meaning is broadly similar. "In China, in the technical community, there's a broader spectrum of things that are included. When you're talking about clean coal here it's really coal to methane; polygeneration; how do you use coal as a raw substance to create a number of different things, not just electricity, and do that in a way that's clean." Mohler added, "In the US, the emphasis is more on power production."

Regardless of the differences in concepts however, Duke and their Chinese counterparts share largely similar objectives in terms of technology development, with both looking how to use the byproducts from coal power plants to produce biofuel while utilizing technology which focuses on energy storage and energy distribution. One of the projects which is aimed towards achieving these goals is the algae project, carried out in conjunction with Chinese energy giant ENN, which looks to capture carbon dioxide. As part of the project, Duke Energy's East Bend power plant in Boone County near Cincinnati, utilizes technology developed by ENN in China.

As Mohler explained, "In 2010, (Duke Energy) used one of ENN's photo-bio reactors to look at growing algae from the flue gas from our power plant in Northern Kentucky. As far as we can determine, that's the first time that power plant flue gas has actually been used to grow algae successfully. And what we did with that work was determine which algae grows best and removes the highest amount of carbon dioxide from the flue gas. Then the year following that, at ENN's site at Inner Mongolia they worked on ways to increase the density of algae grown per unit area, and now we've taken both sets of results from those two years and we're planning forward work again back at our East Bend power plant." The intention of the joint project is to utilize the process in an effort to recycle CO2. After the algae removes the CO2 from the flue gas the algae itself can then be used for animal feed, fertilizer, or for the purpose of bio-derived liquid fuel production.

Duke Energy has also seen progress in its work as part of the US China Energy Research Center, established in 2009 by US President Barack Obama and Chinese President Hu Jintao, whilst working with the Huaneng power group to look at post combustion capture of carbon dioxide. As part of this project, Duke took technology developed in China by Huaneng and applied it to one of their power plants in Indiana. The company is also in discussion with ENN, China's grid companies and companies such as BYD concerning the development of energy storage technology, electric vehicle technology, and distributive technologies such as rooftop solar and small scale wind power.

Duke Energy's collaboration with Chinese energy companies comes at a critical juncture in terms of China's need to balance its own energy needs with the environmental costs that comes as a result. According to Mohler, Duke Energy is learning how to scale and apply the technologies that are being created in China as a result of the unique situation China finds itself in. "China is building out so much clean energy infrastructure so quickly across such a large scope, that there's a lot of learning here for us. A big part of what our focus is at Duke in working with our Chinese partners is to be able to bring these technologies back to the Americas for the benefit of our customers; cheaper, quicker and with less risk than if we went it alone."

As for what China's energy giants gain from the collaborative partnership, Mohler stated, "I think what our Chinese friends learn from us is a couple of things. One is, we have an older, more established infrastructure and in some ways it's more complex; so it gives our Chinese partners an ability to experiment with those technologies in that different environment. But I think what a lot of our Chinese partners are interested in figuring out is how to enter the US market in the energy space, and certainly having the Duke brand and our ability to help understand those markets is a benefit to them."
Aside from coal, Duke Energy is also benefiting from China's development of nuclear technology and has agreements in place with all existing Chinese nuclear companies in order to gain crucial knowledge from China's nuclear development. As Mohler told CRI, "In the US, no nuclear power plant has been built since 1985. But many companies, including Duke, are anticipating building what's called generation 3 nuclear power plants such as the AP1000 that Westinghouse markets. China has built 4 of them and they're operating and it's building more. So, we can learn from that experience as well."

In terms of the future outlook for China's energy sector, Mohler believes that global hindsight, especially with what the US has done over the past 100 years, provides the country with a competitive edge when it comes to developing its energy infrastructure and "building it out in the right way". However, Mohler also noted the need to provide everyone in the country with a constant flow of electricity. "Job one for China, is to electrify; complete electrification of the country,' Mohler stated. "The last numbers I've heard from talking to my colleagues is between 400 million and 500 million people don't have regular access to electricity in China today. So, I do believe this is job one, but China's got an interesting opportunity that they're taking full advantage of here which is building it out in the right way."

Ultimately, US-China collaboration with regards to energy is vital. Both countries have a lot to gain, whether it be best practices, market access and knowledge, joint technological development or risk diversification. As China and America are expected to emit 41 percent of global emissions over the next 25 years, collaborations such as these are necessary and will probably determine whether the world succeeds in protecting the world's climate.


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