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      Burning sugar-cane residues for generation of process heat and power production is a practice already established in the Chinese sugar industry. It has been estimated that over 800 MW of bagasse derived power production capacity are presently installed in Guangdong and Guangxi alone. The energy produced from these installations is almost all consumed on-site. The introduction and commercialization of modern bagasse cogeneration technologies, producing enough electricity to satisfy plant requirements and a surplus amount which can be sold to the grid, may offer a sound investment opportunity for some plants. At the same time, the production of energy from an industrial waste-product will help to meet national energy needs in a more sustainable manner. The potential for cost-effective bagasse cogeneration power capacity in the sugar industry has been placed at around 700-900 MW in China.

      In recent years the Chinese sugar industry has been in poor economic health. Oversupply and inefficient production have contributed to this situation. However, the ongoing restructuring process, including the closure of smaller-scale mills and consolidation of larger mills, will help to create an environment in which the industry is better equipped to take advantage of the benefits of modern bagasse technology applications.

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      Local experience with bagasse cogeneration technologies in the sugar industry will be increased through the development of feasibility studies and construction of a state-of-the-art facility in Southern China. The lessons learned, in terms of the technical and economic performance of this plant, will be disseminated through a series of workshops, including training for business development and for financing. In this way the project aims to facilitate the commercial replication of this technology application.

Guitang Bagasse Cogeneration Project, Guangxi province

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Background

     China has extensive experience in the application of anaerobic fermentation technologies, a network of research centres and capacity to manufacture anaerobic digesters. Over 6 million household-scale biogas digesters and around 500 industrial units are now operating in China. However there is limited experience with larger-scale biogas digesters for applications in the agricultural and industrial sectors.

     Current estimates place the fraction of liquid organic waste from agricultural and industrial processes treated in anaerobic digesters at less than 10% of the potential. If all of the waste from medium to large pig farms were captured, this would result in the capture of 600M m³ of methane per year, enough to fuel roughly 100 MW of power. Application of similar biogas digestion technologies to waste streams from distilleries and other industrial entities, would produce a further 900M m³ of methane annually.

     However, at present, industrial application of anaerobic digestion technologies offers insufficient economic and financial rewards to warrant widespread adoption in China. This is due to a complex mix of technical, policy and financial issues, including: (i) lack of standardization in design and construction of large-scale anaerobic digestion systems; (ii) inappropriate separation, control and handling equipment; (iii) limited application of lessons learned locally and acquaintance with international best practices; (iv) low financial returns for small-size biogas systems; (v) lack of incentive policies to support increased biogas production; and (vi) uneven enforcement of existing environmental regulations.

     Under the Project, three biogas plants are being constructed as models for commercial replication. The selected sites represent a diversity in size, regional climate, and use of energy output. Two facilities are located at industrial-scale livestock farms and the third at a distillery. The project aims to derive generic and flexible system designs that can be replicated on a commercial basis at other potential sites. International best practices are being disseminated, in part through the application of the most advanced commercial technologies.

     Based on these three advanced systems, and on existing experience, a series of capacity building activities will address specific challenges for the more widespread commercialization of this technology in China. In particular, business and financing aspects of project development will be targeted. Design and finance guidebooks will be compiled and disseminated for livestock and distillery applications.

Dengta Livestock Farm biogas and wastewater treatment project, Hangzhou , Zhejiang

Shunyi Livestock Farm Wastewater Treatment and Biogas Project, Beijing

Qingdao Distillery Biogas Pilot Project, Shandong Province

     There are presently 900 million people living in rural China, of which 10% are without access to modern energy services. Harnessing China’s vast renewable energy reserves through versatile hybrid systems can offer the best, least-cost alternative for extending these services to many remote communities.

     By 1999, over 160,000 stand-alone wind turbines (100W-5kW), with a total capacity of 26.3MW, and a further 13MW of PV had been installed in China.  This includes around 30 village-scale hybrid systems (10kW- 200kW), sited in two distinct types of location—on islands off China’s east coast, and in remote areas of the northern and western provinces.  Typically, the island systems employ a combination of wind-diesel-battery technologies, while the inland systems also make use of PV technology.  Some village systems installed in Tibet use only PV with battery storage.  To date, the success of these systems has been mixed due to design, system integration, and equipment quality difficulties, and institutional issues such as financing, system ownership and operation, and servicing and maintenance.

     Nevertheless, it is clear that the potential for hybrid applications in China is high, since regions without modern energy services are often those with good wind and solar resources. Furthermore, the modular nature of these systems means they can catalyze and keep pace with rural economic development.  As such, this technology can provide a key element in meeting the long-term energy needs of rural populations and in promoting sustainable development in some of China’s poorest regions.

     The SETC UNDP/GEF Project will establish three hybrid village power systems using wind and PV technology with battery storage. Two of these systems are sited on coastal islands— Beilong Dao near Rui’an in Zhejiang Province and Xiao Guang Dao near Qingdao in Shandong Province—and will constitute hybrid village systems backed-up by diesel generators. The third project will be located in a remote western province.

     By coupling local design teams with international expertise, the project will introduce advanced resource assessment and system design techniques, and incorporate provisions for service and maintenance, and cost recovery. Based on the three advanced systems, and on existing experience, a series of capacity building activities will address specific challenges for the more widespread adoption of this technology in China.  The Project is supporting technical training for system design and integration.  For example, the Project held a Village Hybrid System Design and Integration Workshop in August 2000.   Business and financing aspects of project development will be specifically targeted.  The Project will commission a Market Survey of Village Power Systems in China and conduct a programme of resource monitoring in high priority villages.  In addition, regional workshops will be held to raise awareness of the potential of this technology application, to pass on best practices in project appraisal and development, and to develop suitable financing instruments.  Finally, compilation and dissemination of a Hybrid Project Development Guidebook will be a further tool used to support the realization of hybrid projects across China.　

     The three project sites represent a diversity in regional climates and demand-side characteristics. Two of these systems are sited on islands off China’s east coast. The third project will be located in a remote western province. Table 1 details some of the characteristics of one of the selected island sites.

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     Solar water heaters (SWHs) have already achieved extensive market penetration in China. By 1999, annual production exceeded 2.5M m² and installed national capacity exceeded 15M m². The most common types of domestic SWHs are combined storage tanks, flat plate solar heaters, and evacuated tube solar heaters. Typically, combined storage tanks and flat plate solar heaters are found in the western and inland regions, while evacuated tube solar heaters are found in the eastern and coastal regions. SWHs manufactured in China are sold nationwide and exported to South East Asia, Europe and elsewhere. In total, China serves over 50% of the world market for this technology.

     Under the present situation, a lack of industry–wide technology standards allows the prevalence of low-quality products, damaging long-term market development. Certification testing has specific implications for market support and development, technology transfer, advanced technology introduction, and competitive business interests.  Involvement of the broad solar thermal community in prioritizing support activities is essential to the consensus building process for development and adoption of standards and certification test procedures.

     At the same time, growth in SWH demand is outpacing production capacity, requiring industry to modernise and consolidate production lines. The development of industry-wide standards, complimentary to modernization of manufacturing, is one of the most pressing needs for the wider application of SWHs in China.

     Based on local conditions and international experiences in standards development in this field, the present Project is supporting the national standards committee to develop appropriate national SWH standards, and will go on to support a local testing center to develop standard certification and testing procedures.

Support of certification testing for the SWHs will focus on technical capacity building training and intervention but additional activities in this market sector will directly address commercial objectives to support market expansion.  At present, opportunities exist in the residential and commercial buildings sectors in urban centers in China to support new market opportunities at a project scale several times larger than current projects.  Such projects can attract commercial financing.  Intervention here involves consideration of building codes, solar right of ways, new construction procedures as well as equipment standards.

     During the first year of the Project (March 1999 – March 2000), interviews were conducted with potential candidates for the solar thermal certification testing facility that will be supported by the Project with equipment support and technical assistance.  In addition a project working group has been set up to ensure effective implementation of activities in this arena.  The working group is made up of representatives of the China National Institute of Standardization, Beijing Solar Energy Research Institute, and the Professional Committee of the Exploitation of Solar Energy of Chinese Society for Energy Sources of the Countryside) .