Other bathtubs – capital

China is rapidly eliminating old coal generating capacity, according to Technology Review.

Draining Bathtub

Coal still meets 70 percent of China’s energy needs, but the country claims to have shut down 60 gigawatts’ worth of inefficient coal-fired plants since 2005. Among them is the one shown above, which was demolished in Henan province last year. China is also poised to take the lead in deploying carbon capture and storage (CCS) technology on a large scale. The gasifiers that China uses to turn coal into chemicals and fuel emit a pure stream of carbon dioxide that is cheap to capture, providing “an excellent opportunity to move CCS forward globally,” says Sarah Forbes of the World Resources Institute in Washington, DC.

That’s laudable. However, the inflow of new coal capacity must be even greater. Here’s the latest on China’s coal output:


China Statistical Yearbook 2009 & 2009 main statistical data update

That’s just a hair short of 3 billion tons in 2009, with 8%/yr growth from ’07-’09, in spite of the recession. On a per capita basis, US output and consumption is still higher, but at those staggering growth rates, it won’t take China long to catch up.

A simple model of capital turnover involves two parallel bathtubs, a “coflow” in SD lingo:


Every time you build some capital, you also commit to the energy needed to run it (unless you don’t run it, in which case why build it?). If you get fancy, you can consider 3rd order vintaging and retrofits, as here:

Capital Turnover 3o

To get fancier still, see the structure in John Sterman’s thesis, which provides for limited retrofit potential (that Gremlin just isn’t going to be a Prius, no matter what you do to the carburetor).

The basic challenge is that, while it helps to retire old dirty capital quickly (increasing the outflow from the energy requirements bathtub), energy requirements will go up as long as the inflow of new requirements is larger, which is likely when capital itself is growing and the energy intensity of new capital is well above zero. In addition, when capital is growing rapidly, there just isn’t much old stuff around (proportionally) to throw away, because the age structure of capital will be biased toward new vintages.

Hat tip: Travis Franck

Idle wind in China?

Via ClimateProgress:

China finds itself awash in wind turbine factories

China’s massive investment in wind turbines, fueled by its government’s renewable energy goals, has caused the value of the turbines to tumble more than 30 percent from 2004 levels, the vice president of Shanghai Electric Group Corp. said yesterday.

There are now “too many plants,” Lu Yachen said, noting that China is idling as much as 40 percent of its turbine factories.

The surge in turbine investments came in response to China’s goal to increase its power production capacity from wind fivefold in 2020.

The problem is that there are power grid constraints, said Dave Dai, an analyst with CLSA Asia-Pacific Markets, noting that construction is slowed because of that obstacle. Currently, only part of China’s power grid is able to accept delivery of electricity produced by renewable energy. “The issues with the grid aren’t expected to ease in the near term,” he said. Still, they “should improve with the development of smart-grid investment over time.”

The constraints may leave as much as 4 gigawatts of windpower generation capacity lying idle, Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley, concluded in November.

China has the third-largest windpower market by generating capacity, Shanghai Electric’s Yachen said.

It’s tempting to say that the grid capacity is a typical coordination failure of centrally planned economies. Maybe so, but there are certainly similar failures in market economies – Montana gas producers are currently pipeline-constrained, and the rush to gas in California in the deregulation/Enron days was hardly a model of coordination. (Then again, electric power is hardly a free market.)

The real problem, of course, is that coal gets a free ride in China – as in most of the world – so that the incentives to solve the transmission problem for wind just aren’t there.