China's new generation of leaders, with Hu Jintao (a mere 59) at the helm, looks set to continue pretty much along the course set by their predecessors: an economically successful mix of Mao, Marxism-Leninism and market forces. Reform and restructuring of China's electric power sector is likely to remain high on the agenda, the aims being the familiar ones of introducing competition and increasing efficiency.
Interestingly, Hu Jintao, as well as being "a member of the student dance team in his university years", occasionally dancing "solo at parties", also studied power engineering. He "dreamed of becoming an expert in hydropower" (which bodes well for the 18 GWe Three Gorges project), and subsequently held posts in the power sector (a background he shares with old guard electricity specialist Li Peng, former chairman of the National People's Congress).
As we know only too well in the West, there will of course be glitches on the road to reform. A recent setback, as reported in this month's news, is the mysterious disappearance of the head of the soon to be broken up Chinese State Power Corporation, an entity employing no less than 1.3 million people.
Capitalism has also taken a bit of a battering recently and the Chinese electricity reformers must be looking closely at the current travails of liberalised power industries around the world, where some understandable disillusionment with the unfettered free market - in the wake of California, British Energy, TXU and Enron, to name but a few - has set in.
However the pragmatic Chinese would appear to be in the position of being able to pick and mix their favourite bits of capitalism and central planning, having the tenets of communism to fall back on if market liberalisation looks like it is getting out of hand. Lenin, still recognised as a founding father of the ideology on which China operates, was a great enthusiast for electricity and the building of power stations, with his famous dictum "communism is Soviet power plus the electrification of the whole country" - but no admirer of private enterprise.
Whatever the outcome of current restructuring efforts, over the next few years, under the current five year plan (2001-2005) and beyond, the Chinese intend to increase diversity in the power generation fuel mix. Natural gas, currently playing a negligible role in power generation, will be particularly encouraged. For example, the bidding process is now underway for China's first tranche, 8 GWe, of gas fuelled combined cycle plants, with a further 24 GWe to be ordered by 2011. To be sited on the booming east coast, the new units will be fuelled with gas from the 4000 km long 12 billion m3/y West-East pipeline (connecting the Tarim basin in the west and the Ordos basin in central China to Shanghai, and from an LNG terminal being built in Guangdong. There will also be growth in hydro, renewables and modest expansion of nuclear.
But coal will remain far and away the dominant fuel for power generation in China. A recent International Energy Agency study of China (part of its 2002 World Energy Outlook) concludes that "The power sector's heavy dependence on coal will not change much over the next three decades. Because China has abundant coal resources and coal-plant construction costs are low, most new generating capacity will be coal-fired." The IEA study suggests that coal will account for around 73 per cent of electricity generation in 2030, compared with around 78 per cent in 2000, while gas is projected to provide 7 per cent of generation in 2030, nuclear 5 per cent, big hydro 13 per cent and renewables about 0.8 per cent.
Because of the gargantuan scale of China's energy industry and its expected high growth rates these percentages translate into very large installed capacities by the standards of most other countries. By 2030 the IEA study is projecting 113 GWe of gas generating capacity in China, 31 GWe of nuclear, 209 GWe of big hydro, 12 GWe of wind (compared with a mere 0.4 GWe in 2000). But these numbers are dwarfed by the 693 GWe of new coal-fired plant that the IEA is projecting to be in operation by 2030, corresponding to a threefold increase over the 2000 figure.
With such a large potential programme of new coal build, there should be a good deal of scope for innovative thinking. As part of its "Go West" or "West-to-East" policy, which aims to address the growing imbalance in economic development between the eastern coastal rim and other regions, "coal-by-wire" projects are planned, with coal plants sited in the poorer coal mining areas exporting electricity to the prosperous east. One such project, the 2100 MWe Yangcheng plant, in Shanxi province, has just been completed (as reported in this month's news), and the policy is likely to continue.
There will also be renewed emphasis on reducing environmental impacts from coal plants. China's existing coal stations currently achieve an average efficiency of only 27-29 per cent and the country "produces a disproportionate 14 per cent of the world's CO2 emissions", the IEA says. With the growing momentum behind carbon dioxide capture and sequestration (see pp 24-29), this is a technology that the new administration might consider taking a lead in.
TEPCO leaks more credibility
Giving an address on electric power restructuring, at the recent CEPSI meeting in Fukuoka, Japan, in early November, Katsutoshi Chikudate, managing director, Tokyo Electric Power Company, put up a PowerPoint slide offering "a sincere apology" for "inappropriate management of nuclear power inspections and repair work over a long time", as discussed in last month's issue.
What he should have added is that things now appear to have got much worse. As reported in this month's news, it now seems that, in addition to the falsification of inspection records already being investigated, there were instances in 1991 and 1992 when air was injected into the primary containment vessel at Fukushima Daiichi 1 to improve its apparent performance during leak rate tests. The potential safety significance of this kind of thing seems to take TEPCO into even deeper water than it was in already.
The regulator has ordered shut down of the unit for up to one year, with large revenue losses. Mr Chikudate's PowerPoint slide also contained the statement, "liberalisation in the power market should be compatible with the promotion of nuclear power." TEPCO's problems have dramatically increased the challenge of achieving this compatibility.
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