CleanEnergyintheParadigmofEnergySecurity:TheDevelopmentofU.S.‐ChinaEnergyCoopera>on

JoannaLewis,Ph.D.

EdmundA.WalshSchoolofForeignServiceGeorgetownUniversity

PresentedattheBrookingsIns.tu.onOctober25,2010

•  USandChinaarestrategicallyinterdependent,andfacesimilarchallengesin–  maintainingenergysecurity–  comba>ngclimatechange–  ensuringeconomicgrowthandprosperity

•  Weareenteringachallenging>meinUS‐Chinarela>ons–  Climateandenergycoopera>onmaybeonekeyareawherewecanadvance

•  US‐Chinacoopera>ononclimatechangecanbroadenanddeepenareasoflong‐term,mutuallybeneficialcoopera>onandbuildstrategictrust

•  ChinaandtheUnitedStatesareposi>onedtoleadtheglobaltransforma>ontoasustainable,lowcarbonglobaleconomy–  Arecurrentlyleadersinrenewableenergy

2

Climate,EnergyandUS‐ChinaRela>ons

TheGlobalClimateChallenge•  Astheworld’stoptwoenergyconsumersandcarbonemiRers,theUnitedStatesandChinaplayadecisiveroleinourabilitytoaddressglobalclimatechange

CO2 Emissions from Fossil Fuels and Cement (2007)

Energy: IEA, 2007 (1990-2005); BP, 2008 (2005-2007 trend); venting and flaring: EDGAR 4.0 (EIA, 2007; CDIAC, 2007); cement: EDGAR 4.0 (USGS, 2007), USGS (2008)

•  Inacarbon‐constrainedworld,theU.S.andChinawillhavenoalterna>vebuttobecomefarmoreac>vepartnersindevelopinglow‐carboneconomies,expandingtheroleforrenewableenergytechnologies

•  Bothcountriesarealsomo>vatedbyasetofrelatedgoals,namelyjobcrea>on,energysecurity,andpollu>onreduc>on,makingrenewablesdevelopmentanop>malstrategy

•  Asmajortechnologyexporters,theyarealsopoisedtojointlyleadthewayinfosteringgreaterworldwideuseofcleanenergy

•  Giventhesizeoftheirenergymarkets,anysubstan>alprogressthetwocountriesmakeinadvancingrenewableswillnecessarilyadvancetechnologicalunderstanding,acceleratedeploymenttoreducecostsfurther,andbringimmediatebenefitstotheglobalcommunity

RenewableEnergyCoopera>on

TransmissionIssues•  Integra>onintoexis>ng

grids•  ResourceVariability:

balancingintermiRentgenera>onwithinaservicearea

•  Cri>calCorridorsSi.ngBarriers•  Publicacceptance•  Environmentalimpacts•  Compe>nglanduseneeds

RisingCosts•  Materialsinputs•  Materialssupplyconstraints

TurbineReliability•  Gearbox/Drivetrain•  Blades•  Undersizedtestfacili>es•  Lowcapacityfactors&poor

si>ng

PolicyFramework•  Consistent,suppor>ve

policies•  Policiesthatpromotelocal

economicdevelopmentandjobs

BarrierstoRenewablesDeploymentintheUS&China

These are all topics ripe for US-China Cooperation

•  Manufacturing–  Chinainpar>cularhastakenimpressivestridestoimproveits

manufacturingcapabilityinwindturbinesandsolarphotovoltaic(PV)systems,althoughthelaRerarealmostexclusivelybeingsoldasexports

–  TheUnitedStateshasun>lrecentlybeentheworld’stopmarketforwindturbines,andaleadingsupplierofsecond‐genera>on,thin‐filmPVmaterials

•  Deployment–  Muchofthenear‐termgrowthinrenewablepowerinbothcountries

willbeinwindinstalla>ons,aswellassomelarger‐scalesolargenera>on

–  DuetoitsemphasisonPVmanufacturing,ChinaisfavoringPVforcentralsta>onplants,whereastheUnitedStatesisexpectedtorelymoreonsolarthermaltechnologiesforcentralsta>onswhileusingPVmoreforsmalleranddistributedapplica>ons(includingMW‐scaleinstalla>onsoncommercialroofs)

OutlookforRenewablesintheUS&China

•  7/20/10–  IEApronouncesChinaworld’slargestenergyconsumer–  Chinarejectsclaims;callsIEAdataunreliable

•  7/22/10–  U.S.Senatepronouncesclimatebilldead–  Chinaannouncesplantobegindomes>ccarbontrading

•  8/15/10–  ChinapassesJapantobecomesecondlargesteconomy

•  9/4/10–  U.S.unemploymentworsethansimilarindustrialna>ons

•  9/8/10–  ChinanamedmostaRrac>veplacetoinvestinrenewableenergy

byErnst&Young•  9/9/10

–  UnitedSteelworkersfileSec>on301Pe>>onagainstChina’sGreenTechnologyPrac>ces

RecentHeadlinesHighligh>ngTensions

•  Interna>onaltrade–  Compe>ngwithUS/EU

manufacturersinothermarkets

•  MarketaccessintheUS–  PreferenceforUS

manufacturers

–  Concernsabouttechnologyperformance

•  Interna>onaltrade–  ChineseimportstotheUS

•  USmarketaccessinChina–  PreferenceforChinese

manufacturers

–  Unfairsubsidies

CleanEnergyCompe>>on

•  Wearecompe*ngwithChinatobecomearenewableenergytechnologyleader–  Theyleadinproduc>on,butnotinR&Dordeployment

•  IfUScompaniescooperatewithChinesecompaniestheywillstealourtechnologyandintellectualproperty–  AremanyUScompaniesalreadybenefi>ngfromcoopera>onwithChinesepartners

•  Theycannotlearnanythingfromus–  SeriouschallengeseveninwinddeploymentinChina

•  Verylowcapacityfactorsasaresultofpoorsi>ngprac>ces,O&Mandlackoftechnologytes>ngandcer>fica>onfacili>es

•  Wehavenothingtolearnfromthem–  ChinaistheonlycountrypursingGW‐scalewindfarmdevelopment

–  Similartransmissionandintegra>onissuesastheUSmeanstheyprovideavaluablelaboratoryforlearning

PerceivedChallengestoCoopera>on

•  U.S.‐ChinaStrategicandEconomicDialogue•  MemorandumofUnderstandingtoEnhanceCoopera>ononClimate

Change,EnergyandtheEnvironment•  ClimateChangePolicyDialogue•  MemorandumofCoopera>ontoBuildCapacitytoAddressClimate

Change•  U.S.‐ChinaJointCommissiononCommerceandTrade•  U.S.‐ChinaCleanEnergyResearchCenters•  U.S.‐ChinaElectricVehiclesIni>a>ve•  U.S.‐ChinaEnergyEfficiencyAc>onPlan•  U.S.‐ChinaRenewableEnergyPartnership•  21stCenturyCoalCoopera>on•  ShaleGasResourceIni>a>ve•  U.S.‐ChinaEnergyCoopera>onProgram(ECP)•  U.S.‐ChinaEnergyEfficiencyForum•  U.S.‐ChinaRenewableEnergyForum•  U.S.‐ChinaAdvancedBiofuelsForum

Implementa>onofCleanEnergyCoopera>on

Consor>aannouncedforU.S.side,alongwith$25millofUSGfunds.Chineseconsor>umunknown;mandate:R&D?&D?&D?

•  China&theUnitedStatesarecentralplayersinnego>a>ngamul>lateralclimatechangeagreement–  Copenhagenachievedalot…butnotenough

•  Mul>lateralpoli>csdifferfrombilateralpoli>cs–  Par>cularlyinthewayChinaposi>onsitselfasanequalpartnerratherthanasthevoiceofthedevelopingworld

•  Bilateralagreementscannotreplaceamul>lateraltreaty–  Limitedinscopebutlesspoli>cally,commerciallysensi>vewhenkeyactorsbroughttogether

–  Bilateralcoopera>veac>onscanhelpachieveac>oninthenearterm

–  Theyhopefullywillalsoimprovethemul>lateralrela>onshipthoughcrea>ngmutualunderstandingsandbuildingtrust.

BilateralCoopera>on&ClimateNego>a>ons

•  US‐Chinatensionsomenhigh,asinCopenhagen

•  ChinasideswiththeG77–lowestcommondenominatoromensetstheposi>on– MostrecentalliancewiththeBASICcountries;manyaretakingseriousac>ons

–  ThefirsteverUNFCCCnego>a>onhostedbyChinashowedthatliRlehaschanged,andexpecta>onsforCancunarelow

Interna>onalClimateNego>a>ons

•  ClimatepolicyrelatedtocleanenergyandtoenergysecuritybutomenseparatedinUS‐Chinapolicydiscussions

•  Chinaisincreasinglycombiningthetwodomes>cally–  Energyintensitytargetmo>vatedbyenergysecurity

•  Aimstoeliminatethewastefuluseofenergy–  Energyintensitytargethasledtoacarbonintensitytarget

•  Buildsuponthesystemsinplace•  WillrequireanewsystemofGHGaccoun>ng•  Addi>onalclimatepoliciestoreduceemissions

–  S>llmajorconcernsoverdataquality;energyintensitytargetwilllikelynotbeachieved

Climate<‐>Energy

•  Wefacesimilarchallenges– maintainingenergysecurity–  comba>ngclimatechange–  ensuringeconomicgrowthandprosperityThiscancreateopportuni*esforcoopera*on,orgroundsforcompe**on

•  Weareenteringachallenging>meinUS‐Chinarela>onsClimateandenergycoopera*onmaybeonekeyareawherewecanadvance–orfurtherstrain–therela*onship

•  ChinaandtheUnitedStatesareposi>onedtoleadtheglobaltransforma>ontoasustainable,lowcarbonglobaleconomyWeplayakeyroleinadvancingtechnologicalunderstanding,reducingcosts,andbringingimmediatebenefitstotheglobalcommunity 14

Conclusions

JoannaLewis,Ph.D.AssistantProfessor|Science,TechnologyandInterna>onalAffairsEdmundA.WalshSchoolofForeignServiceGeorgetownUniversity|ICC305‐Q37th&OStreetsNW,Washington,DC20057Tel.+1.202.687.7284|Fax.+1.202.687.1431|Email:jil9@georgetown.eduWeb:hRp://explore.georgetown.edu/people/jil9/

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