Posts tagged China
Why Solar Power’s Reliance On Utilities Is Growing
Dec 15th
Julia Hamm, President and CEO of the Solar Electric Power Association, discusses the current status of the solar industry and why the utility’s role in the growth of the solar industry is growing.
Apocalypse Redux? U.S. Natural Gas Find off Vietnam Could Raise Tensions with China
Nov 4th
First, the good news…
U.S. oil company ExxonMobil is reporting a “potentially significant” gas discovery off the coast of Vietnam, stating in a press release, “We can confirm ExxonMobil Exploration and Production Vietnam Limited drilled its second exploration well offshore Danang in August 2011 and encountered hydrocarbons.”
ExxonMobil is the world’s largest publicly traded oil company by market value. While Vietnam, an oil exporter and the third-largest oil producer in South Asia, began offshore exploration of its reserves in the 1970s, Hanoi only started in 2004 awarding offshore exploration concessions to a plethora of foreign companies, including those from the U.S., Canada and India with ExxonMobil receiving concessions from the Vietnamese government allowing it to explore blocks 117, 118 and 119 off Danang, an area that Vietnam insists is well within its 200-mile exclusive economic zone under international maritime law.
The bad news?
The South China Sea’s offshore resources are currently claimed by six countries – China, Vietnam, Taiwan, Malaysia, Brunei and the Philippines, with competing claims overlapping in a crazy quilt pattern. Given the billions of dollars at stake for exploiting the undersea energy resources, it is unlikely that the contradictory claims will be resolved anytime soon, making Southeast Asian waters a potential flash point for conflict.
The devil is in the details and in this case the United Nations unwittingly played the role of Lucifer when in 1982, the United Nations Convention on the Law of the Sea Part V, Article 55 defined an “exclusive economic zone” (EEZ) for countries with maritime frontiers as extending 200 nautical miles from a nation’s coastline. Needless to say, in congested waters this clause was a subject of dispute, as nations raced to define their new offshore parameters, a contest only heightened by the world’s increasing addiction to hydrocarbons.
Like Pontius Pilate, the UN washed its hands of bilateral and regional disputes arising from the convention and devolved negotiations to the parties involved, which account for the current impasse in the South China Sea, as the 1982 UNCLOS agreement did not establish any adjudication mechanism for resolving disputes.
According to Hanoi, Vietnam’s exploration efforts in what it maintains are incontestably within its EEZ waters have come under increasing harassment from Chinese naval units. In May, Vietnam’s state oil and gas monopoly PetroVietnam claimed that Chinese ships had harassed and damaged its oil exploration ships.
As ExxonMobil has a license from the Vietnamese government to explore blocks 117, 118 and 119 off the coast of Danang, an area that Hanoi claims falls well within its 200-mile exclusive economic zone under international maritime law, will/can ExxonMobil apply its influence in Washington to safeguard its interests?
The future?
The founder of the modern Vietnamese state, Ho Chi Minh, reportedly said before his death in 1969, “Colonialism is dying. The white man is finished in Asia. But if the Chinese stay now, they will never go. As for me, I prefer to sniff French shit for five years than to eat Chinese shit for the rest of my life.”
It is essential that China shut down Vietnam’s uppity attitude now, as a number of other international companies besides ExxonMobil have recently found oil in the region, including Malaysia’s Petroliam Nasional Bhd., Britain’s Premier Oil PLC, Russia’s state-owned Gazprom OAO and France’s Total SA, and Beijing will hardly want to take on the governments behind them.
As for Hanoi’s obstreperous attitude, those with an historical memory might recall that China and Vietnam fought a brief but bloody border war in 1979, four years after the country was unified. The Chinese Global Times newspaper recently editorialized that nations involved in territorial disputes with Beijing in the South China Seas should “mentally prepare for the sounds of cannons” if they remain in conflict with Chinese policy.
At present ExxonMobil is adopting a low profile approach. ExxonMobil Upstream Media Relations official Patrick McGinn said only of the discovery, “Data from the well are being analyzed. Our first well offshore Vietnam did not encounter hydrocarbons.”
The issue is not minor for Vietnam, as its fossil-fuel production and exports have recently declined.
The final wild card if diplomacy fails is power projection, and China’s recent commissioning of its first aircraft carrier, the Soviet-era Varyag bought from the Ukraine, began sea trials in July. Chinese sources have said Beijing is also building two indigenous carriers.
For those interested in history, which has rather more resonance in Asia than the West, it might be noted that the Varyag has been renamed the Shi Lang.
Shi Lang was a Chinese admiral who served the Ming and Qing dynasties, revered for leading the amphibious assault and conquest of the Kingdom of Tungning in 1681. Tungning is now known as Taiwan.
So, given the competing claims in the South China Sea, will international law or force prevail?
Place your bets, but remember your history – and hold your nose..
Written by. Dr. John C.K. Daly for OilPrice.com. The opinions expressed in this article are solely those of the author, Dr. John C.K. Daly. For more information on oil prices and other commodity related topics please visit www.oilprice.com
China Completes First Biofuel Jet Test Flight
Nov 3rd
On 28 October Air China conducted its first trial flight of a passenger jet powered by a mix of biofuel and traditional aviation fuel.
The Jet A-1 biofuel kerosene used in the flight was derived from the seeds of tung trees, more commonly known as Japtropha.
Air China’s Boeing 747-400 landed safely at Beijing Capital International Airport at 9:30 a.m. after burning more than 10 tons of the biofuel, a 50-50 mixture of traditional Jet A-1 derived from oil and Jet A-1 processed from the japtropha seeds. The jatproha Jet A-1 is what’s known as a drop-in, simply being admixed in a 50-50 ratio with conventional Jet A-1, and requires no engine modifications.
Air China Vice President He Li said the composition and the burning efficiency of the biofuel admixture had been tested along with its impact on the Boeing 747′s four Pratt and Whitney JT9D high-bypass turbofan engines.
The Hydro-treated Renewable Jet Fuel (HRJ) used Honeywell/ Universal Oil Products’ process to produce the biofuel. According to Jennifer Holmgren , UOP’s former director for renewable energy and chemicals, UOP licenses the process “nonexclusively.” UOP said in a statement, “The flight is a result of a broader effort kicked-off in 2010 by China’s National Energy Administration and the U.S. Trade and Development Agency to address the technical, economic and institutional factors required for the development of a new biofuels industry in China.”
Air China is the People’s Republic of China flag carrier and one of the country’s major airlines, the world’s tenth largest airline company according to fleet size, operating nine Boeing 747s scheduled to be phased out. Air China has already retired five Boeing 747s.
According to the International Energy Agency, China will lead the world in “demand growth” for jet fuel through 2012, reaching 5.6 percent. Total worldwide demand for Jet A-1 is forecast to reach 239.4 million gallons per day during the same period, compared 214.2 million gallons in 2007, a demand-growth rate of 2.3 percent. A 2007 422-page National Petroleum Council study, Facing the Hard Truths About Energy, reports that global demand for energy, including jet fuel – will grow by as much as 60 percent by 2030. It is China’s growing civilian air capacity that makes the test significant, as China Civil Aviation Administration official Zhang Hongying said following the test that the Jatropha-derived biofuel was now ready to be used for commercial flights.
The Air China test flight is the world’s sixth such demonstration flight using Jet A-1 derived from Jatropha.
The success was long in coming. PetroChina vice president Shen Diancheng remarked that it had taken PetroChina a decade to overcome the technical barriers of converting Jatropha oil into Jet A-1 aircraft, but now that tests have proven its viability, PetroChina expects to ramp up production to 60,000 tons of jatropha Jet A-1 annually by 2014.
China’s interest in developing biofuels for industrial use is growing rapidly. In late 2009 Boeing and China signed a biofuel agreement with the Chinese Academy of Sciences and Chinese universities calling for research and development that potentially could support commercialization of Jatropha. China has been proactive in the biofuel area for a number of years, with Jatropha planted in 2007, and the plant – either wild or cultivated – can be found in Sichuan, Yunnan and Guizhou provinces as well as the Guangxi Zhuang autonomous region. Yunnan currently has 33,000 hectares under cultivation and the Xinhua news agency reports that the country will have 13 million hectares of biofuel plantations by 2020 that will produce 6 million tons of biodiesel annually.
But commercial Jatropha production has its bottlenecks. While Jatropha grows wild in tropical regions and can be cultivated on land not suitable for crops, it produces a lot more on cropland, suggesting that if it becomes popular, airlines will have to be careful that it is not squeezing out crop production. Initial field tests of Jatropha cultivation suggest that high oil yields require that the plant receive water, nutrients, and soil conditions that are comparable to many food crops.
A substantial drawback to Jatropha is that it is currently harvested manually and commercial producers have found that the plant is more labor intensive than originally thought, especially for harvesting.
Despite these setbacks, commercial Jatropha production is underway or being established abroad. Abundant Biofuels Corporation, which is headquartered in California, has jatropha cultivation projects underway in the Philippines, Columbia, Peru, and the Dominican Republic. D1 Oils plc of London, United Kingdom, has announced large projects in India, Malawi, and Zambia. A number of companies are reported to have recently acquired rights to cultivate jatropha in Ghana. The central and some state governments of India are promoting Jatropha production on tens of millions of acres, although these efforts have been criticized for potential adverse impacts on forested areas, biodiversity, and food production. Early yields in India have been below expectations.
Accordingly, commercial firms growing Jatproha and airlines worldwide will be watching events in China with great interest. Fuel and oil comprise 25 percent of airlines’ operating costs and when the price of jet fuel rises one cent, it increases the global cost of aviation $195 million.
Given the fiscal resources available in China, it therefore seems most likely that Jatropha commercial aviation biofuel production will arise their first, if sufficient land not impacting the nation’s food production can be found.
Perhaps in the future, the East will not be so red as green.
Written by. Dr. John C.K. Daly for OilPrice.com. The opinions expressed in this article are solely those of the author, Dr. John C.K. Daly. For more information on oil prices and other commodity related topics please visit www.oilprice.com
Source: http://oilprice.com/
How Government Contracts Have Jump Started This Thin Film Solar Cell Maker
Oct 26th
Dr. Ashok Sood, President & CEO of Magnolia Solar, discusses his company’s plan to grow his thin film solar cell business by securing government contracts.
Considering China for Manufacturing Alternative Energy Solutions
Oct 19th
China has long been thought of as low cost manufacturing location for all kinds of products. In fact many of the Fortune 500 companies have some of their operations located in China for that reason. When it comes to manufacturing highly technical products, such as those needed for Alternative Energy Solutions, China still offers some opportunities but also has begun to develop some challenges.
The best types of manufacturing to bring to China are products or processes with high labor content that utilize a mature process. This minimizes the involvement of expat support (high cost) and prevents a company from having a number of technical support resources on call and traveling frequently. Fully automated manufacturing is not typically embraced by Chinese labor culture; therefore a mutually acceptable solution would be to identify areas that are critical to product quality and yields where variation can be minimized with fixturing or islands of automation.
There are three primary reasons why companies look to set up manufacturing operation in China.
- LABOR COST: Low cost of labor and still thought to be plentiful- although the labor cost has close to doubled in the past 5 years (RMB appreciated from 8.1 to now 6.3 and labor rates have increased nearly 50% during the same period. This is still much cheaper than western labor rates, although it seems to be steadily increasing. A company locating operations in China will tend to employ more headcount than in US due to the “one person –one job” culture, unlike the US where cross-training is common
- EXPANDING MARKET: China is the largest potential growth market in the world now. In order to avoid duty charges and tax charges you need to produce in the China market. China has Export Processing Zones (EPZ) located throughout the country, designed for companies that want to produce in China for export. However, if you want to sell into the China market and avoid large taxes you need to be manufacturing in the country, but outside the EPZ.
- JOINT VENTURES: The China Government is involved in all major contracts and tax incentives, companies may have to be a “China Owned” business. This usually means partnering with another China business that will own a 51% share of the joint venture. This works well if the US company brings the technology and know-how and the China partner focuses on managing the Government contracts, tax incentives and labor
Areas to investigate further:
- Labor cost and inflation are going up quickly. It is expected the labor cost will double again in the next five years. Coupled with China’s devalued RMB, this could lead to a significant increase in labor rates in the future.
- High employee turnover rates are common and can drive higher training costs, losses in productivity and can impact yield.
- China Government can control markets and change rules and regulations with little notice
- Concerns over IP security have become elevated, as documented in a new book “America the Vulnerable” by Joel Brenner, former Inspector General for NSA. This includes hacking corporate IT servers, cell phones and even penetrating expat email accounts via in-country hotel internet access.
Manufacturing in China still is a low cost option for companies with mature products and processes that have high labor content. Total operating costs are increasing in China and with pressure from the US and WTO pushing to have China devalue the RMB (or impose import tariffs on products produced there) may create a less favorable environment in the near future.
Written by John Pinho, the president of NeoTech LLC, a consulting firm helping high technology firms figure out innovative ways to effectively expand their operations on a global basis. With over 30 years of engineering, operations and international project execution expertise, NeoTech can add value at every step of your strategic vision.
Solyndra and the “Shakeout”: The solar industry bankruptcies in context.
Oct 13th
During August, three homegrown photovoltaic (PV) module manufacturers failed and two European manufacturers decommissioned their U.S. production lines. All told, the United States lost 20 percent of its panel manufacturing capacity.
By far, Solyndra’s fall was the loudest. In September 2009, the Fremont, Calif.-based thin-film manufacturer received a $535 million loan guarantee from the U.S. Department of Energy (DOE) to ramp up to a 450-megawatt (MW) factory. Solyndra’s was the first section 1705 loan guarantee awarded, and the first to backfire. The bankruptcy triggered a congressional investigation into whether the timetable on Solyndra’s loan guarantee application was accelerated. Search warrants were issued, and the FBI raided the spanking-new and shuttered Fab 2 factory and Solyndra executives’ homes.
For a time in September, solar received unprecedented front-page ink. The media storm around Solyndra brought light to dramatic, unforeseen declines in the cost of PV, China’s influence on the market and doubt over the United States’ ability to compete.
Back Story
Solyndra offered a novel product, a cylindrical cadmium-indium-gallium-(di)selenide (CIGS) thin-film panel. The product’s economic viability depended on the price of pure polysilicon —the raw material for competing crystalline-silicon (c-Si) PV technologies. Four years ago, when the cost of polysilicon approached $1,000 a pound, Solyndra’s silicon-free product was a hot commodity, attracting venture capital connected to Richard Branson, oil baron George Kaiser and the Walton family, and investment bank Goldman Sachs. By late 2007, the Bush Administration DOE had moved to develop a conditional loan guarantee commitment.
By the time Solyndra’s application was approved in March 2009, under the Obama Administration, polysilicon prices had dropped by nearly 90 percent. They never bounced back and global c-Si PV prices fell off, throwing a wrench in the thin-film business model. There is no evidence Solyndra ever sold its panels at cost. According to filings for a cancelled initial public offering, Solyndra was producing its panels for $4.00 a watt and selling them for $3.24 a watt as recently as June 2010. With competing factories moving toward $1.00 a watt PV, a best-case-scenario for the Fremont factory was $2.00 a watt.
Those market conditions set in much faster than expected. Some indices have spot prices for modules down 40 percent since January. “What happened earlier this year is that this massive [module] oversupply situation led to prices plummeting,” said Shayle Kann, managing director of solar for GTM Research. “And we haven’t seen any recovery in prices yet. It’s [a] continued difficulty for every manufacturer globally, but it’s hitting those that can’t compete on price first.”
Kann expected more factory closures, both in the United States and abroad, over the next six months to two years. By and large, the so-called “shakeout” has been attributed to China’s influence on the global market.
Bigger Picture
It’s not that Western manufacturers can’t make competitive, well-made products. The problem is that they can’t get competitive financing. Western investors and banks are simply unwilling, and probably unable, to compete with the Chinese government’s vigorous investment in solar manufacturing. It means that Chinese factories ramp up faster, achieve economies of scale more quickly, and flood the market with cheap, commoditized c-Si. A Sept. 25 Mercom Market Intelligence Report laid out the raw numbers.
Since January 2010, Chinese banks have offered Chinese solar companies a staggering $40.7 billion. For perspective, U.S. solar manufacturers have received $1.4 billion in DOE loan guarantees since 1705’s inception (Solyndra’s allotment was the largest). The Chinese manufacturer Suntech disputed the figures cited by Bloomberg and Mercom, but declined to give an interview for this story.
Established companies with market-leading technologies of their own should survive — witness First Solar and SunPower. But startups like Solyndra and mid-market players like Evergreen, SpectraWatt and BP Solar won’t be able to keep pace. It’s a threat that Bryan Ashley, chief marketing officer for Suniva, lives with everyday. “It’s very, very difficult to compete these days — even in the American market — with some of the pricing we’re seeing,” Ashley said. “Talk to Sharp and Solar World and they’ll tell you the same thing.
“You’re not going to see very many U.S.-based PV manufacturers in 18 months. It’s pretty much going to change the whole landscape of the industry,” Ashley added.
China’s front-end approach is not a new phenomenon. In the 1960s and 1970s, Japan invested heavily in consumer electronics and flooded world markets with cheap products that worked well. American factories making televisions, radios and related equipment, including Zenith, RCA and Motorola, eventually closed their U.S. plants and either distributed Asian goods under their own labels, or sold their brands to Asian companies. Japanese manufacturers, of course, were later undercut in turn by Taiwanese, Korean and now mainland-Chinese factories.
It also happened in auto manufacturing. Only the best-established American automakers were able to survive in the face of high-value competition, first from post-war Germany and later from Japan and Korea. GM needed rescue by the federal government. Chrysler needed two federal bailouts, and new ownership by two successive European auto companies. The recent bankruptcies do not mean that the solar business isn’t viable and healthy, any more than the disappearance of Zenith and RCA means that television is a dying swan. It does mean that the Western financial system is seriously challenged by Chinese state capitalism.
Bottom Line
It’s difficult to gauge how many more bankruptcies are in the queue. A number of startups appear to be precariously positioned. SoloPower, another CIGS thin-film manufacturer, is scheduled to open up a 400-MW factory in Portland, Ore., by the end of the year. Like Solyndra, it received a DOE loan guarantee ($197 million). In a September interview with The Oregonian, SoloPower CEO Tim Harris declined to discuss his costs. “We all knew prices would be going down. Clearly they’ve gone down faster than we would have forecast,” Harris told the paper.
At this point, the United States’ module manufacturing struggles are unique. Factoring in all components, we actually run a solar trade surplus — even with China. The Solyndra mayhem, ironically, coincided with the release of a promising GTM Research trade assessment. The report found that the United States exported $5.6 billion in solar goods and equipment in 2010 — good for a $1.9 billion trade surplus. That’s nearly three times 2009’s surplus of $720 million. Our positive balance of trade with China, chief trade partner-and-rival, exceeded imports by something between $250 million and $540 million.
On the downstream side, the flooded market brings us cheap solar equipment and demand for labor to install it. According to a September Lawrence Berkeley National Laboratory report (PDF), PV prices fell by 17 percent in 2010. With current market trends, prices are headed for another year of impressive reductions. In its “National Solar Jobs Census 2011,” the Solar Foundation found that the industry added 6,735 workers between August 2010 and August 2011 — a 6.8 percent growth rate. During the same 12-month period, jobs in the overall economy grew by just 0.7 percent.
Is the sorry state of module manufacturing a harbinger, or an outlier? Without political action, it’s in danger of being the former. The success of China’s front-end investment, designed to achieve critical mass and break-even quickly, is making some rethink our national emphasis on end-use incentives. We didn’t build the railroads by rebating transport costs to farmers: we built them with front-end financing. Tennessee and Michigan appear to have figured this out, and have laid out incentives to get factories built, as a priority over forcing utilities and ratepayers to subsidize PV installation. If Solyndra had gotten the investment it needed to ramp up quickly three years ago, it might not be looking for a way to resume operations now.
Solar is obviously a viable business globally. Western governments and businesses need to decide if they’re willing to be sellers as well as buyers of the technology. Do Americans want the manufacturing jobs, or just commissions on the sale of goods made elsewhere? What kind of economy do we want?
Cray Wins Contract from ORNL for Titan Supercomputer
Oct 12th
Cray wins contract from ORNL for Titan supercomputer
The U.S. Department of Energy’s Oak Ridge National Laboratory has awarded a contract to Cray Inc. to increase the Jaguar supercomputer’s science impact and energy efficiency. The upgrade, which will provide advanced capabilities in modeling and simulation, will transform the DOE Office of Science-supported Cray XT5 system, currently capable of 2.3 million billion calculations per second, into a Cray XK6 system with a peak speed between 10 and 20 petaflops.
The new system will employ the latest AMD Opteron central processing units as well as NVIDIA Tesla graphics processing units. The last phase of the upgrade is expected to be completed in late 2012. The system, which will be known as Titan, will be ready for users in early 2013. ORNL is managed by UT-Battelle for the Office of Science.
Cooper Lighting releases next generation LED LightBAR system
Cooper Lighting has upgraded its outdoor LED LightBAR technology. The new system’s unmatched optical performance delivers improved lumen output and efficiency, while continuing to offer up to 75% in energy savings over traditional High Intensity Discharge outdoor lighting sources.
Cooper Lighting’s LightBAR technology features the company’s patented AccuLED Optics, which sets the industry benchmark for reliable photometric performance, scalability and energy efficiency. The system’s unique application-specific design allows lumen and energy output to be customized to fulfill the exact needs of the outdoor space—eliminating wasted energy and obtrusive spill light.
Array Technologies ships solar trackers for 50-MW PV project in California
Array Technologies has sent the first shipment of solar tracking systems for the 50-MW PV project in southern Sacramento County, Calif. Recurrent Energy has developed the project for Sacramento Municipal Utility District.
Array Technologies is providing horizontal, single-axis trackers and ground-mount racks for the project. Recurrent Energy selected Swinerton Renewable Energy as the EPC for the project.
JinkoSolar resumes production at Haining facility
JinkoSolar Holding Co. Ltd. has resumed production at its facility in Haining City in Zhejiang Province, China. The Haining facility, one of two JinkoSolar production facilities, suspended production on September 17, 2011, after an accident involving suspected leakage of fluoride from a waste storage warehouse into a nearby small water channel due to extreme and unforeseen weather conditions.
How Clean Tech Companies Choose A Manufacturing Site
Oct 11th
David Bergeron, a Partner at T3, discusses what clean tech companies are looking for when they search for that next manufacturing plant.
Why Capitol Hill Is Keeping U.S. From Creating Clean Energy Jobs
Oct 10th
Nathanael Greene, Director of Renewable Energy Policy in New York City for the National Resource Defense Council, discusses our country’s struggle to create clean energy jobs.
Loading ...
Recent Comments