China’s High-Energy Innovation

What’s the state of energy innovation in China? Breakthrough spoke with Ming Sung, Chief Representative for the Asia-Pacific region at Clean Air Task Force, about the work underway in China to rapidly develop and commercialize carbon capture and storage, advanced nuclear, and renewable technologies to curb pollution and meet energy demand.

How did you become involved in the energy field?

My family left China in the 1950s. I went to the Colorado School of Mines, and then joined Monsanto to work on synthetics like nylons. During the energy crisis, I worked with the Carter administration to help form the US Department of Energy (DOE) and was part of the coal conversion program. The energy crisis in the 1970s was relatively short-lived, so I moved from DOE to the private sector and spent most of my career with Shell Oil, about 25 years.

In the early 2000s, I retired from Shell to work in the high-tech industry and with Chinese energy companies, and I soon joined the Clean Air Task Force in 2007 as I felt the need to contribute something meaningful. Since CATF is doing good work on global climate change, I wanted to share my experience and connections. In the meantime, I’ve also been consulting with a number of organizations including DOE.

What work did you do with Carter?

I was summoned by the Carter administration to work in the Energy Research and Development Administration, which became DOE. My major focus was coal gasification and liquefaction. These energy developments would help ease the impact of the oil embargo at a time when the United States was suffering from the energy crisis; however, it took some time for all these technologies to become commercial. Gasification started in 1930s in Germany, and a new generation of coal gasification technology was developed and used by the United States in the 1970s. Now, the biggest users are the Chinese, who use more coal than anyone else in the world.

Take us from the 1970s through today.

In general, the first generation of coal gasification converting coal to gas for energy production was in the 40 to 50 percent efficiency range. Second-generation technology was developed in the 1970s. GE/Texaco and Shell currently possess the top two technologies, with a thermal efficiency in the 70 to 80 percent range. A 10 percent efficiency increment is a lot, but a 20 percent increase represents a tremendous improvement in both economics and operations. Other technologies developed then included GreatPoint Energy (Blue Gas), which was initially developed by Exxon Mobil. It is a catalytic gasification process that takes only one step to convert coal to synthetic natural gas (SNG), not syngas. SES’s U-Gas is another example of a technological leap in this field.

I was on the first team that designed and built the first Shell coal gasification plant in Texas, using technology that was developed by the United States in the ‘70s and ‘80s. The Great Plains Project used an even older technology, but is still running today. Coal gasification makes coal react with water to form hydrogen and carbon monoxide. You have to use some energy to kick that reaction off, so some of the carbon from the coal becomes carbon dioxide and some becomes carbon monoxide, and the two have to be separated. When carbon dioxide and carbon monoxide are separated, that provides a concentrated carbon dioxide stream. Canada buys carbon dioxide from North Dakota and pipes it to Canada for enhanced oil recovery (EOR), which they’ve been doing for 30 years. So when you think about carbon capture, utilization, and storage (CCUS), it’s nothing all that earthshakingly new, and has been practiced for many years. In the 1970s, we didn’t think much about climate, but CCUS is now a critical element in the fight to curb global climate change.

What is the status of Future Gen?

Future Gen I was coal gasification using the conventional technology. The people involved scrapped that and went with Future Gen II, a totally different technology. For Future Gen II, they were going to purify the air, extract the pure oxygen from the air, add it to coal, generate energy, and sequester the carbon dioxide underground in the aquifer. However, all new technologies at the beginning cost more than people think. I know that because I have been working in that space for 30 years.

In terms of Future Gen II, each technology is not new, but the integration of technologies is complex and costs more. From what I understand, they are having difficulties to get the private funding for the project. For an estimated $1.6 billion project, DOE would have given them a grant for $1 billion, but they still would have had to raise the rest of the project money. Unfortunately, US banks are not likely to lend money for a technology that’s not commercial.

Is coal gasification the right technological pathway? Why were there so many coal gasification technologies?

I believe all technologies have advantages and disadvantages. There is no universal cure. Why are there so many coal gasification technologies? Because there are so many different varieties of coal. It is very different from place-to-place and mine-to-mine, so local conditions are different and you need many different kinds of technologies for different projects. When you have a project and define where you are going to build it, you have to understand the local market conditions and which technology will fit that particular situation. That’s what I’ve been doing for 30 to 40 years. You are unlikely to develop a technology that is perfect for every situation.

Where are we at with CCS?

The Global CCS Institute publishes an annual report on CCS around the world and essentially it shows that we are making slow, steady progress in developing, commercializing, and scaling up CCUS. We believe that CCUS is essential in the efforts to combat global climate change. There are basically two ways to capture CO2 – either by pre- or post-combustion. Coal gasification is pre-combustion capture. Post-combustion can capture carbon dioxide from a power plant smoke stack. Once the carbon dioxide is captured and concentrated, the next step is to use it, which gives it a commercial value. For example, the United States has been using natural carbon dioxide in enhanced oil recovery for decades. In China, EOR technology is not well developed and not as widely used as in the United States. We are working to help them more broadly utilize EOR as a supplementary oil production technique.

Is CCS doomed to be expensive?

To answer this question, we have to make a proper apples-to-apples comparison. The value of CCS or CCUS needs to be compared with other near-zero emission technologies like nuclear, solar, and wind. I would contend that CCUS from coal is competitive in price, and in fact is more cost-advantageous to comparable technologies. If we use an electrical power generation basis, and you use coal to generate electricity without any carbon dioxide controls, adding CCS probably increases the cost by 30 to 40 percent, so it becomes one and half times the cost. Right now, nuclear is in the same ballpark, if not a little bit more. Solar and wind are more and don’t take into account the cost of intermittency. So you need to compare apples-to-apples. Obviously we want to ultimately transition away from coal utilization, but in the developing world, this will take a number of decades.

How would you describe China’s energy innovation?

Because of air pollution concerns, China is putting a lot of emphasis on nuclear, solar, wind, and hydro. Clean coal is also a high priority, but they know it’s difficult to retrofit old plants. They have also put in place air pollution regulations similar to the United States. The new regulations are very tough. The Chinese want renewables to grow at roughly 100 percent a year –– that’s as fast as possible because there are limitations to how much equipment you can make, how many engineers you can educate, and other limitations besides money. So renewables in China are growing annually at 100 percent, which is phenomenal, but then the country needs a lot of power, and so coal is still on the rise. They are trying to target 2030 as peak coal, and might even get there earlier, as most of the new nuclear plants are being built in China.

What can you tell us about China’s advanced nuclear plans?

The first commercial plant, built several decades ago, was a French Areva design in Daya Bay. Areva now accounts for only about 10 percent of nuclear that China is building, mainly because Areva didn’t agree to transfer technologies. Westinghouse, on the other hand, chose to partner with China and agreed to transfer the technology and to train workers. One of their plants is right outside my hometown in Ningbo.

Westinghouse’s AP1000 is the initial design and the Chinese will learn from it. I feel this is a good strategy. When I was at Shell working on coal gasification, the company originally didn’t want to sell to China. They said that if we sell, they’ll copy it and we won’t have a business. But today Shell openly says that 70 percent of business is in China, and more than half of their business is repeats –– that if they buy the first license, then they buy the second one.

China is also developing its own construction firms. Initially they had to buy project management technology and experience from overseas companies. Even now, from engineering to procurement to management, the United States still remains a step ahead of everyone else. So if the United States works with the Chinese and that partnership continues to grow, there is enough business for everyone to grow, and most of my American friends agree with that. That’s why CATF is working with US government agencies and companies to create win-win situations.

What are other kinds of cooperation exist between international partners?

Let’s talk about Areva and Westinghouse. After Fukushima, safety became an enormous concern. China’s experienced operators are mainly from the French Areva plant at Daya Bay. They had little if any experience operating Westinghouse plants. Operators need to have hands-on experience on actual commercial plants, not just with the modules. It’s like driving a car. You don’t really know how to drive it until you’ve really driven it for a while and have gained valuable experience.

As another example, we have helped China Huaneng Group to partner with Duke Energy. Duke has agreed to let Huaneng operators operate side-by-side for months, shadowing all their US operations. Now, Exelon is also doing it, and so is Southern Company. They actually make money training Chinese operators.

Those are just a few examples of successful US-China business partnerships, where we are exporting our expertise. There are many others, such as shipbuilding. There are mechanical and engineering societies, such as American Society of Mechanical Engineers, who have a large number of inspectors rigorously monitoring the vessels being built in China.

What about cooperation on the high-temperature gas reactor (HTGR)?

The high temperature gas reactor was initially developed by the United States, and the Germans tried to make it work but couldn’t. China decided to learn from the United States instead, so they sent teams here. They currently have agreements with MIT and others to work together. Tsinghua University built their pilot, and Huaneng is now building a demonstration plant, their first small modular reactors.

What about salt-cooled reactors?

Under an agreement with the US Oak Ridge National Laboratory, the Chinese Academy of Sciences (CAS), a research institute similar to our national labs, has a project on salt-cooled reactors, but the person who led it just stepped down.

Does that suggest it’s not going well?

Their organizational structure is different than ours. In the United States, leadership changes have transitions. In China, the effect of leadership change is more uncertain. The president left, the new president has not been named yet, and they aren’t sure if he’ll champion the new technology or not.

Is the HTGR the only reactor being demonstrated?

The HTGR is being built on a commercial level. Gates’ design is not even in pilot-stage yet. Beginning this year, CATF is looking to do a study and as part of the study we will tour in China.

Can outsiders go visit?

The head of China’s National Energy Administration has just been changed. NEA is a small organization, and touring many government facilities is difficult. But it’s easier to talk with other institutions such as the nuclear institute under Tsinghua or CAS. With the operating companies like Duke, Exelon, or Southern, if there’s some benefit to them, they may talk with you.

Has the test-bed idea been discussed in China?

No, China has not been that open to the idea because they are looking at one specific technology at a time. CAS and Tsinghua have not discussed a general test bed at this point.

What can DOE do to help technological innovation?

I think DOE can help industry and institutions to develop different technologies, and companies should apply these technologies to a particular situation to prove there is commercial viability. Both technological and economic feasibility must be demonstrated in a commercial situation. Many things look good on paper but when you practice it, other things come up. All technology is that way. There are too many unknowns. We developed the technologies –– coal gasification, coal liquefaction –– that are now being used all over the world. But without US government support, we couldn't have gone as far and as fast as we could.

Does the United States still lead the world in innovation and research?

The United States is more innovative. We think about things better than anyone else. But China tends to execute projects more quickly and faster and cheaper than anyone else. So, if we can get the United States and China working together, everyone will benefit, and those concerns will also make a lot of money. CATF’s focus on clean energy and on climate change is not only to reduce air pollution but also to reduce carbon dioxide emissions. In China, if you take care of carbon dioxide, that will go a long way in managing all the other pollutants.

How has your understanding of climate change affected what technologies you support?

Two decades ago, I wasn’t very fond of nuclear, because of radiation concerns, but overall nuclear is near-zero carbon energy, and I am for it. CATF is increasingly pursuing nuclear and other low- to zero-carbon energy technologies. We are very different from other organizations because we believe coal with CCUS, nuclear, and other new technologies need to be developed at an accelerated pace to meet the enormous challenges posed by global climate change.