Bioenergy in China

1
Bioenergy in Chinas Agriculture Sector
Challenges and Opportunities

• Lin Gan
• Sustainable Bioenergy Conference
• Bonn, October 12-13, 2006

2
China in Two Faces

• Very large disparity in living conditions between
  urban and rural areas
• The gap is widening
• Strong measures needed to reduce this gap

3
Agriculture Development

• Economic 9.5/y between 1978-present
• Agriculture stagnation in production and prices
• Increase in imports due to population growth,
  decline in arable land and higher demands
• Growing disparity between the rich and the poor
• Farmers migrate to urban areas as economic
  migrants, due to limited jobs in agriculture
  areas and low income from agriculture production
• Energy use divided switch to fossil fuels in
  coast regions and rely on traditional biomass use
  in west regions
• Key problems land loss due to urbanization,
  surplus labor force from agricultural sector

4
The Development and Environment Challenge

• GDP grows by 10.4/y, some regions excess 14
• Environmental protection objectives for 10th
  Five-Year Plan were not realized
• Energy consumption increases faster than GDP
• Western regions are far more energy inefficient
  than coast regions (2-3 times)
• Climate change has seen its impact, e.g.
  droughts, floods, hurricanes, which led to
  hundred-billion Yuan of losses and damages

5
Drought in Sichuan Province
6
The Western Regions

• Lag behind in economic development than the coast
  regions
• Vulnerable in eco-systems
• Poverty still a social problem (40-80 million)
• Farmers still rely on traditional use of
  agriculture biomass for cooking and space heating
• Focus on raw materials industry and energy will
  not make the regions rich
• Attitude on GDP growth leads to ecological
  consequences
• Weak in human resources and management capacities

7
Traditional Use of Biomass
8
Biomass for Cooking and Heating
9
Transition from Traditional to Modern Biomass use

• 200 million tons of agri. residues/y
• Most of them are burned in fields
• If 20 million tons (10 of the total) are used
  for biomass CHP, US 750 million income for
  farmers

10
Reduce Coal Use

• Coal a major source of pollution
• Lots of waste in burning of coal
• Health impact of coal production and use is high
• Infrastructure for burning coal can be used for
  biomass utilization

11
Miao in Guizhou
12
Traditional lifestyle
13
Impact of Indoor Air Pollution

• Household use of coal for cooking, heating and
  drying of agriculture products
• Open stove use as local culture and tradition
• Problems found from early 1980s
• Preventive measures are undertaken from recent
  years

14
Health Effects of Fluoride Poison

• Thyroid gland
• Kidneys
• Brain and nervous system
• Immune system
• 1/30 people, or 45 million, in China are affected

15
Children Are Most Affected
16
Dental Fluorosis

• Effects to teeth and bones
• Common in China due to air and water pollution
• More than 45 million people affected
• Once affected, it remains for life

17
Arsenic poison in Guizhou

• Concentrated in Southwestern region
• Household coal use related
• Due to local resource, climate, economic
  situation and tradition

18
Household bioenergy Applications

• Independent off-grind power systems for
  households and villages to provide electricity to
  35 million people by 2010
• Biogas a major technology in agriculture sector
  for sustainable energy and farming practice
• Tens of millions of users already, but further
  market expansion is needed

19
Biomass Transition

• Requires an Integrated Approach for bioenergy
  development
• From centralized to decentralized power systems
  development
• Agricultural wastes for biogas, power and heat
  production
• Direct biomass burning to reduce coal use
• Develop pellets market demand in rural
  households stoves for cooking and heating
• Develop heat market for bioenergy use
• Large potentials on biofuels in transport
• Biomass CHP relevant for small cities and local
  residential areas

20
Biomass Potential

• If 20 million tons of agriculture residues were
  uses, it could..
• Save 10 million tons of coal
• Reduce CO2 emissions of 25 million tons
• Generate 15 GWh of electricity
• Produce 60 million GJ of heat
• Enough for 25MW x 350 CHP plants

21
Social Benefits

• Income generation
• Job creation from biomass production, transport,
  equipment and services (150,000 jobs for 30GW)
• Improvement in Health and living conditions
• Reduce migrant pressure to urban areas

22
Biomass Applications

• 2020 Electricity generation target from biomass
  30GW
• Biogas CHP plants in feedstock farms
• Biomass CHP with agriculture residues
• Biogas with municipal and residential residues
• Biofuels (ethanol biodiesel)
• Pellets and bio-briquette production
• Investment in CHP 30-36 bn

23
Development of Biomass Technologies

• Efficient biomass stoves
• Pellets production
• Biogas technology for households and feedstock
  farms

24
Opportunities for International Cooperation

• Investment cost for CHP 0.6-0.7 yuan/KWh
• Joint key equipment production pellets machines,
  boilers and feeding systems for CHP plants
• CHP power system designs and operation
• Biofuels production technology for transport
• Biomass resource production and management
• Biomass stoves for various applications, e.g.
  households, restaurants
• Service company management and marketing

25
Technology Management Barriers

• Modern bioenergy is new to China
• Lack of combustion and gasification technologies
• Lack of biofuel production capacity and
  technologies
• Disparity in resource situation in different
  regions
• Little experience on resource costs, collection
  and transportation systems, business services in
  market application
• Lack of RD capacity and management skills

26
Barriers on Market Development

• Weak in incentive policies
• Lack of effective financial instruments, e.g.
  public funds, venture capital, tax policy,
  micro-credit
• Monopoly of utilities access to e-grid
• Low coal prices
• Lack of appropriate technologies for rural
  applications, e.g. efficient stoves, small
  gasifies

27
Key Issues for Consideration

• Priority should be on meeting local demands for
  rural residents
• Substitutions for fossil fuel use important
• Social development issues should be linked to
  bioenergy development
• Local conditions have to be respected
• Appropriate technologies would be more effective
  in application than modern technologies
• Capacity building are important
• Incentive polices are needed at central, regional
  and local levels

28
Thanks for your Attention!