June 26, 2008 – Volume 11, Issue 18
I N · T H I S · I S S U E


The Keynote Speaker

Greetings from Asia. It's been seven years since I'd last been to Asia. After managing a project in the Philippines for Russ Sturm at the International Finance Corporation, I was resolved to stay put and focus on energy efficiency and renewable energy in California. Hey, who wouldn't want our lifestyle? We need to set a really good example.

Peter DuPont asked me to speak at the third annual Asia Clean Energy Forum, and I'm glad I did. Peter has spent his career in Thailand bringing green lessons from America and Europe to Asia. The Forum was hosted by the Asian Development Bank (ADB) and U.S. Agency for International Development; the meeting was at ADB's impressive facility in Manila.

My job was two-fold: First, I'd be on the "regulatory panel" presenting the relative merits of the California Solar Initiative and the German Solar Feed-In Tariff. Second, I was honored to have been asked to present the closing keynote address. "No pressure, but make it really inspiring and upbeat." That was my challenge and one that kept me awake for several nights!

This third year of the Forum, 550 participants came from 49 countries. One could easily sense the collective wisdom of these dedicated professionals working on pathways to sustainability. I saluted them there, and I salute them now. We are a world community. Through a synergy of forces we will prevail in turning from a futile energy path to a clean future. The Forum proved to me that there is a will in Asia, and that there is a way. Through concerted efforts facilitated by ADB and AID and many others, rapid change in Asia can be shaded very green. It will take very hard work.

This begins a two-part series on our recent Asian adventure, beginning at the Asia Clean Energy Forum in the Philippines. We then went to mainland China to witness its extraordinary pace of growth. The next issue features an 8-day travelogue adventure in Shenzhen, Nanjing, and Beijing China.

Urban Democracy and Quality of Life

Mayor Enrique Penalosa (above, with Ted) served the City of Bogata, Columbia from 1998 - 2001. During his tenure, he'd bought public lands, created pedestrian and bike ways, and created the "Transmillenium" bus system, building on Curitiba, Brazil's noted success. Penalosa's remarks about creating high quality urban environments were passionate and democratic. In doing so, he established an ethical rudder for the conference. Effective urban environments have space and access for all.

"Why can't we stop making 'dumb decisions' and step up the dual challenges of development and sustainability?" he asked. Ironically, as cities get richer their transport systems get worse. Wealthy citizens buy cars, highways are built that destroy urban cultures, and quality of life deteriorates. Thus developing countries have a huge advantage: "They can see that the highest quality cities have moved past cars!"

In Zurich and Amsterdam, mass transit systems are mature. In these cities, 40% of people travel by bike, irrespective of income. In Los Angeles and Houston, cars rule and the quality of life suffers. Mature cities are lowering auto use through policies on congestion pricing and stiff registration fees.

"Shouldn't the public interest prevail? Transportation corridors ought to be for the people first. And the people need sidewalks, bus and bike lanes, not massive arterials for the rich in their cars, only to be gridlocked in traffic." Penalosa believes that a lack of sidewalks shows a lack of respect for human dignity. "The quality of life in any city can be measured by the width of the sidewalks. All great cities have great sidewalks. Think of Paris, Buenos Aires, and New York!"

The 20th century will go down in history as a disastrous era in urban planning. American cities that myopically feature low densities keep looking to add more freeways and lanes of traffic. "Increasing roads is like putting out a fire with gasoline! It's totally irrational." And the higher the density, the more opportunities for walking and biking and highly efficient, frequent, mass transit. "And if you must build new highways," Penalosa noted, "at least leave a few lanes for high-capacity buses."

"In safe and highly democratic urban environments," Penalosa remarked, "a $30 bicycle is just as prestigious as a $30,000 car. A good city is where people want to be out of their house, and not in a mall. The city becomes a playground, safe for kids and adults. It is where people are happy, not where there are happy cars!"

The Power of the Increment

Mayor Enrique Penalosa had raised the bar high with his opening keynote. My closing had to be good. It was one of my best speeches ever! With lapel mike set-up and able to roam among the audience, I was on my game. EcoMotion's theme -- the power of the increment -- was my topic. It was a hugely optimistic and hard-hitting closing perspective on three invaluable days of sharing. I asked all who had learned something to rise. The reaction was instantaneous, with a thundering applause for each other, a standing ovation!

Years ago, in feudal days, farmers shared commons to protect their herds from wolves and warring villages. Each farmer, said Garrett Hardin, maximized his gain by adding to his herd. Every sheep, as he told it, has a "utility" of 1 to the farmer. This was fine, until the commons reached its carrying capacity. Beyond that, any additional sheep would result in overgrazing and decline. But each farmer continued to add to his herd.

This is the tragedy of the commons, an inherent situation whereby individuals seek to maximize gain even to the detriment of society. Before the commons' carrying capacity was reached, each herdsman had a utility of plus 1. Once the carrying capacity is reached, every additional sheep will lower the productivity of the entire herd. Each goat and sheep now has a utility of just less than one.

The tragedy of the commons has resulted blight, land, air and water pollution, traffic jams, overuse of electricity and fuels. (It's readily apparent to each of us in the overhead bins on aircraft.) Asian cities, we'd see so clearly, are choking themselves in emissions, cycling deeper into the tragedy of the commons.

EcoMotion, thank goodness, operates with a far different guiding principle, taking the polar opposite perspective to the tragedy, what we call "the power of the increment."

We celebrate creativity and individuality; we feature good works and good stories that beget more and that result in great synergies. We believe that major change is not only tenable but inevitable if each us of chips in. EcoMotion is based on only the most optimistic perspectives: viral marketing of really logical eco-ideas and strategies.

Recycling provided EcoMotion the early faith that people want to be part of "the solution to global pollution." When we recycle, we take selfless actions for communal good. There's little or no money involved, but we do it because it feels good to be part of the solution to pollution. That's the power of the increment, the feeling that propels us to do more. "Many of you in the room will be net providers, pioneers who not only offset their own footprint, but that provide additional community benefit."

Imagine each of us - all Asians, all Americans -- taking action for the collective good. Together, there would be revolutionary change. At the Asia Clean Energy Forum this philosophy was reinforced. We can solve the massive environmental problems of the day through "the power of the increment." As the EcoMotion theme song lyrics say, "You can't move a mountain alone, but if each of us carries a stone, you turn back and see that the mountain's been moved."

Good planning and sound investments in clean energy can and will result in profoundly positive change. Consider the transformation of Iceland's energy economy thanks to geothermal development, cooperatively-owned wind systems in Denmark, the solar revolution in Germany, and wind in Spain. EcoMotion's "great Metrolink CFL giveaway" demonstrated how to leverage major changes through simple steps. Collectively, these will lead us to a sustainable energy future and one that eradicates the tragedy of the common as a plague on society. Each eco-action creates a synergy, and spells responsibility and opportunity. "Set your sights on a vision, and make it happen. Defy short-term economic thinking, and take a leadership position. Thanks to your advocacy and hard works, you will create an Asian sustainable energy future!"

And then we were off to the airport, headed to China. (More about that in the next issue!)
"A high velocity road is like a fence in a pasture. It sharply divides an ecosystem."
Enrique Penalosa
Mayor, Bogota, Colombia, 1998-2001

Asia Has Abundant Renewables

Asia's energy challenge is to balance growth and sustainable development. Throughout the Forum, we'd discuss the pressure of growth and the quest for upward mobility, from electrification, industrialization, and higher standards of living, and most alarmingly more cars displacing the region's iconic predominance of bikes. How can this thirst be fulfilled in the most efficient and clean manner? Visiting Asia makes stark the reality of urban industrialization and rapid growth.

Ursula Schafer-Preuss, Vice President of ADB, opened with an announcement: ADB's energy efficiency loan portfolio had just topped $1 billion U.S. dollars. A $200 million loan for district heating in the Guangdong Province of China eclipsed ADB's stretch goal for "efficiency," defined as the entire fuel cycle from mine to power plant to end-use, customer efficiency. Besides direct lending, ADB promotes governance, policy, and regulatory reforms, taking action on "access" to electricity, climate change, and increasing fuel prices.

Philippines Secretary of Energy - Angelo T. Reyes - presented a rousing welcome in a boisterous voice: "Oil is now at $135 a barrel and climbing, threatened by scarcity and increasing demand. Asian nations face dual challenges of price and security." And on climate, he said flatly, "The debate is over, the time to act is now. Man has clearly been part of the problem, and now necessarily must be part of the solution."

After 46 years of public service, Reyes is convinced that a combination of behavior change and renewable energy is the answer. It won't come easy: "We have to plan and invest." There needs to be "social mobilization" and what Reyes called a "switch program," a switch from a culture of extravagance and waste, to efficiency and renewables. He sees a bright future as the Philippines is blessed with abundant renewables including solar, geothermal, wind, oceans, biomass, and hydro. Fossils, on the other hand, are finite and unsustainable.

Access and Efficiency

A billion Asians have no access to electricity. Financiers at the Forum were clear on the need for major infusions of capital to concurrently address poverty, energy, and climate issues. "We need to assist developing countries to a low-carbon development goal," while realizing that most Asians may not yet value climate mitigation. (Almost all Asian capitals are on the coast and threatened by climate change; trillions of dollars of Asian economic output is in jeopardy.) Clean energy investments must promote multiple solutions: better local air and smaller footprints.

Woochong Um added perspective: ADB's main objective has been to eradicate poverty through health education and energy. "Climate change makes things much more complicated." Now ADB's agenda has to encompass a broader agenda: energy efficiency, carbon markets, sustainable transport, climate change adaptation, "climate proofing," and even climate disaster preparation and assistance. The Bank clearly sees the need for efficiency as the underpinning for providing access to all. The more than can be saved, the more rapidly the benefits of electricity can be shared by more.

Anders Nordstrom of Asea Brown Bovieri underscored the wealth of efficiency opportunities. In some cases, the losses in the supply chain can be 80%. Asian grid inefficiencies represent billions of dollars of losses annually. ABB is working on an "ultra-high voltage" 800 kV DC system to decrease transmission losses by up to 30%. Better transformers in the distribution system can be just as important - dollar for dollar -- as new light bulbs at the customer's premises.

Marten Willemsen of Philips Lighting began with a statistic: Lighting accounts for 19% of total electricity consumption worldwide. And the dominant light source - accounting for two-thirds of all lighting worldwide -- is the incandescent lamps which has had a hundred year run: a 95% inefficient device using only 5% of its electricity to create light. In Pakistan, noted a participant, 40% of electricity is used for lighting.

There is good news. Fluorescent lighting has only about a 10% residential penetration worldwide. In commercial buildings, outdated and uncontrolled lighting systems are the norm. This spells major opportunities for 20 - 40% efficiency gains in lighting. Philips will phase out its production of incandescent lamps. Willemsen's remarks concluded with the rapid rise of solid state lighting (LEDs), even more efficient and long-lasting light sources that may replace incandescents and obviate the need for CFLs.

Napaporn Phumarapand presented her country's remarkable gains with demand-side management (DSM) programs. In Thailand, DSM has cut load by 1,514 MW. The Electric Generating Authority of Thailand (EGAT) reported that it is exceeding its DSM goals through promotions of T8 fluorescent lighting, efficient appliances, energy audits, and "Attitude Creation Programs" in 420 schools in 76 provinces. Its programs are focused on phasing out incandescents, promoting T5s, and using "upstream" incentives for manufacturers.

Amol Phadke is a LBNL post-doctoral fellow advocating the immediate large-scale DSM programs in India. There, 40% of the public has no access to electricity, water pumping is totally subsidized, and thus wasteful, and the country has severe supply shortages. Its daily load profile is marked by morning and evening electric water heating spikes, signaling the need for gas and solar water heating. Even with unusually low 10 kWh monthly per capita consumption, rolling black-outs are the norm. Phadke explained that India doesn't know what its demand actually is, because it can never fulfill it. "So we are working on creating efficiency power plants, taking lessons from California, and grabbing the low-hanging fruit."

Sudha Setty of the Alliance to Save Energy described her work in India with 29 cities fostering an Energy Service Company (ESCO) industry by putting utility bills payments in escrow, the savings then assigned to ESCO payments. Nitin Pandit discussed lessons learned by the International Institute for Energy Conservation in the Maharashtra State of India and the need for "program tenure," persistence and diligence in promoting efficiency and finding out what works, what doesn't, and why.


There was a point at which the Forum might have gotten ugly. I'd been warned of controversy between advocates and critics of biofuels for Asia and how divisive this issue might be. An ADB official called on participants for patience and maturity. "Biofuels - like fossil fuels -- are not all equal," he said. "We must look at each on its own merits." Will biofuels and gross thirst to fuel cars cause food scarcity and price increases? Many Forum participants believe that rich nations will harvest poor nation's arable lands for fuel.

Biofuels are "a nascent industry" but on the minds of all nations seeking energy independence. By tapping into renewable biofuel developments, nations can be operating under the "current carbon account," release and absorption, versus oil extraction and the release of stored carbon. On the upside, keeping fuel production local, avoiding costly imports, can create value while increasing security and minimizing environmental damages.

Dan Millison, a former ADB official was patched into the conference from his Virginia office to discuss what he calls "anti-ethanol Jihad" and "McMaize." An outspoken Millison framed the issues: Biofuel producers think that they are doing something good, but they are already at odds with a) environmentalists, b) oil companies, c) the U.S. cattle industry, and d) the grocery manufacturers association. "An uphill battle? You bet," he quipped.

Biofuels have been around for a long time. Henry Ford saw ethanol as the fuel of the future. Is it? Corn may be the intermediary technology; other feedstocks are cassava, wheat, rice, sweet sorghum, sugar beets. Brazil successfully uses sugar cane to produce ethanol that supplies nearly half of its auto and truck fuel. Experts say that rainforests there are not being converted to biofuels, but question conversion of rangeland for cattle.

Biofuels are country-specific. In countries like Thailand with excess food production, some say that labor-intensive biofuel production may make sense. "But what about other impacts of scaling up a biofuel industry, monocultures, water use, fertilizers, and climate variability?" questioned a participant. New feedstock options like Jatrophe trees grow in marginal lands twice as fast as palms. Algae are being grown in raceway ponds at Israeli power plants, and then digested in bioreactors to create biofuels. In the process, algae and all biofuels, absorb and then release carbon dioxide.

Load Growth and Coal

Since 2000, India and the PRC have accounted for 50% of world energy growth; nearly 90% of world energy growth through 2030 is projected to be in Asia. Parts of China are experiencing 15% load growth in the electricity sector. And like America, Asian countries have abundant coal. It varies in quality, sulfur, and ash. Indian coal has a high ash content. Three-quarters of China's 713 GW of electric capacity is coal-fired, responsible for 50% of the country's carbon dioxide emissions. Can Asia's coal-fired capacity evolve, from pulverized coal to super critical and IGCC technologies?

Research efforts and multinational collaborations are underway in Asia for clean generation. The "GreenGen" project in Tianjing is a 250 MW, billion dollar effort led by Huangeng Power to demonstrate a "near zero-emissions" IGCC (integrated gas combined cycle) plant. It will "post combustion" CCS, carbon capture and storage. ADB is supporting India's 4,000 MW "ultra-super critical coal plant. U.S.DOE is funding a number of "clean coal" research projects and promoting technology transfer with Asia.

Gasification of coal dates back to gas lights in London in 1812 and may allow for easier carbon capture today. Cleaner technology involves IGCC with high capital costs, moving beds, and fluidized beds. Ultimately all plants will scrub SOX and NOX and CO2 followed by sequestration. Is it possible? How much will it cost? Where can CO2 be safely sequestered? Who's liable if it leaks? Can CCS provide the projected 42 gigaton/year "slice" to the World Energy Outlook's climate stabilization goals?

"CO2 reservoir mapping" was discussed, the concept of locating Chinese coal plants near spent gas wells for CO2 injection. Power plants are now being designed to be "carbon capture ready" like "solar-ready" buildings. A Vietnamese official put her country's needs in perspective with an impassioned plea for assistance. "We must use the coal we have," she said, calling for help to stimulate research and advanced technologies there.

The PRC Panel

China and India largely control the world's environmental future. According to the Word Energy Outlook, in the next 20 years worldwide energy demand will increase by 15 - 20%. Half that growth will fulfill the developmental needs of China and India. Day 3 of the Forum featured three top experts from the National Development and Reform Commission (NDRC) who presented the energy landscape in the People's Republic of China. It is the world's largest energy producer, and its second largest consumer. As of last year, China is the largest greenhouse gas emitter.

Energy in China

Zhou Dadi, a semi-retired NDRC official, is known among his colleagues as "professor." His presented his country's vast energy equation, and began by explaining the impact of 15 million people migrating to cities each year. Currently 45% or China's population is urban, with 594 million in cities with populations over 10 million. Cities, as we would feel a few days later in Shenzhen, are burgeoning and spell opportunity for young Chinese. From factories by day to mega-malls at night!

Professor Zhou commented dryly that China has about 710 GW of plant capacity today, up from a mere 57 GW in 1978. Last year, China added 100 GW to its power system while closing down 50 GW of its smallest, least efficient, and most polluting generating stations. The use of natural gas doubled in the past year.

Concurrently, there are major developments throughout the country, and in particular in preparation for the Olympics. Last year China built 4,000 kilometers of roads and 1,600 kilometers of rail lines. Urbanization pressures are compounded by average personal space. In Hong Kong in the 1980s, the average person had 6 square meters of space, about 65 square feet. Today, the average person has 30 m2 (322 square feet).

China's electricity use is dominated by industry, with more than 70% dedicated to this sector alone. Wanxing Wang of The Energy Foundation suggested that China is "the world's factory." Well over a third of the country's total energy consumption is embedded in exports that world citizens buy. Exports rule the economy with $1.2 trillion in value last year. China produced 11 billon pair of shoes, 70 million air conditioners. Of the 1.5 billion CFLs produced last year in China, half were exported.

Lighting factory Within the Chinese industrial sector, there are 1,000 industries that account for a third of energy use in China. They are targeted for reforms by the Ministry of Finance, and include iron and steel mills, cement and petrochemical plants, power generators, coal mines, aluminum and cement factories, ethylene plants, and auto factories. But the opportunities for energy reform are far wider. Professor Zhou closed with remarks about "the need for a new platform for industrialization and development" that takes into account energy sustainability and climate stabilization.

Conservation in China

China's Energy Conservation Law was crafted in 1997 and then significantly amended in 2007. It has magnificent goals, for China to be the most energy-efficient nation in the world. Its shorter-term target is to decrease energy intensity by 20% by 2010, a 4% annual, nationwide energy efficiency improvement.

China's sustainable energy strategy makes sense. Energy conservation is the top priority. Next in line is relying on domestic sources. The strategy calls for diversification of power supplies (natural gas, nuclear, hydro, and renewables). And it focuses on mitigating climate change. The challenge is to implement this vision in many provinces and quickly.

By law, all new power plants must have scrubbers for SO2 capture; 200 GW of plants were equipped with scrubbers in the last two years. The National Climate Change Program is responsible for developing renewables, increasing forest coverage, and promoting low-carbon alternatives such as behavior change as well as nuclear power. China's first nuclear plant came on line in 1991; it now has 9 GW of nuclear capacity. Its goal now is 60 GW by 2020; and becoming the #1 nuclear nation.

Professor Yu Cong, as Director of the Energy Efficiency Center at the Energy Resources Institute of NDRC, is charged with fulfilling the 20% efficiency gain. She explained that China has launched 10 efficiency programs including initiatives for boilers, motors, cogeneration, building efficiency, and green lighting. China's identified policy tools include differentiated pricing, tariff adjustments, and an "energy savings encouragement fund" that collected 7 billion yuan last year, more than a billion USD. Local provinces have also established local conservation funds.

Timothy Hui, from Natural Resources Defense Council in Beijing, presented his work with the Jiangsu Province DSM (demand-side management) strategic plan. In Jiangsu, 70% of electricity is used in industry, motors and drives in particular. The energy intensity of metallurgies, chemical, and textile plants is four times that of the similar U.S. industries. NRDC analysis shows that there is a DSM potential of twenty-six 300 MW coal-fired power plants. This "conservation power plant" can be built at less than half the cost of new capacity. NRDC is working with the DSM center in Nanjing on 477 demo projects to cut peak load by 580 MW, and on a national DSM manual to harvest this potential that provides a win-win for the economy and environment.

Renewables in China Song Yangin began his presentation about renewables in China with a bit of perspective: In rural areas, renewables have been and continue to be the sustenance of life. Biomass is the only fuel available and it is a means to survival; collecting fuel for cooking is the main job for kids in rural areas.

As with many countries, hydro is the most mature renewable technology in China. There is an installed hydroelectric capacity of 145 GW in China, about 20% of power generation. Development of the 22.5 GW, Three Gorges Dam, the largest hydroelectric project in the world and the largest Chinese construction project since the Great Wall, divided renewable energy advocates in China as its costs and benefits are as large as its output.

Dr Song: "I like this one." Chinese officials believe that there is significant wind potential, approximately 250 GW of onshore production and 750 GW offshore, mainly in the north. China has 6 GW of installed wind capacity at more than 100 wind farms.

In terms of solar thermal, China is the #1 market in the world with a total installed capacity of 108 million square meters. Each year another 15 million square meters is installed thanks to a building code requirement instituted by the Ministry of Construction. There is now an installed capacity of 100 MW of photovoltaics; Song Yangin reported that China is growing fast and is second only to Japan worldwide in module production.