Energy Demand

As you would think, it’s the economic growth that has created the dramatic shift in the energy profile of China. It’s not just that more people are driving cars, it’s the fact that industry is itself is responsible for 70% of China’s energy consumption (compared to less than 25% in the United States).

Coal is abundant here, which is both a blessing and a curse. Large coal reserves provide a fairly cost-efficient method of generating electricity, but this comes at a price environmentally. Every 7 to 10 days a new coal plant is built in China to provide energy for a small city.

I met with Dr. Pan Jiahau, of the Chinese Academy of Social Sciences, the Executive Director of Sustainable Development, and he shared some statistics.

Energy Consumption of Coal
1990 – 650 million tons
2000 – 1.3 billion tons
2006 – 2.6 billion tons

This is a doubling in the past three years alone. And, during the same timeframe steel production has more than tripled. As a producer, China is now the world’s largest steel exporter. China has also now surpassed the United States as the largest producer of CO2 emissions in the world.

Once again, in the area of energy and the environment it’s the lack of enforcement that is a big issue because local officials are compensated for promoting economic growth. I was told that local officials would rather pay the fines for emission violations because it is cheaper than paying 25% more in energy costs alone to run the emission cleaning scrubbers on the coal plants. But if you measure progress by growth rates, this will eventually conflict with sustainability.

In the picture above, I met China’s General Manager of the Tang Energy Group, which is number two in the world market for manufacturing wind turbine blades to generate wind energy. He was very familiar with the opportunities of expanding wind energy production in Minnesota, as it is one of three states where his company and others might consider expansion.

In fact, he believes that in two years China will become a major manufacturer of wind turbines and will be looking for a state in the U.S. to setup a manufacturing base. This could be a natural Minnesota connection and opportunity.

Also, someone on the blog asked me how Chinese officials are handling the export issues and quality control criticism of faulty toy products, and tainted dog food and toothpaste products. The short answer is very seriously. Again, the big issue will be enforcement and hiring an adequate number of inspectors.