China Environmental News Digest

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Wednesday, September 15, 2010

Amid Trade Tensions, U.S. Creates More Clean Tech Research Partnerships With China

The number of clean energy partnerships between the United States and China reached a new peak when the U.S. Energy Department announced two new consortia aimed at tackling clean vehicles and 'clean' coal technology earlier this month.

Along with a substantial funding pool totaling $100 million, split evenly among the two countries, the new consortia have put universities arm-in-arm with car companies, national laboratories, electric utilities and think tanks.

Dennis Assanis, professor of mechanical engineering at the University of Michigan and lead investigator for the clean vehicles consortia said these partnerships were not simply born out of President Obama's trip to Beijing last November, where he and Chinese president Hu Jintao first announced the endeavor. Instead, the new consortia network many researchers already looking to pool their resources into a coordinated national effort.

"When this was announced, it was simply music to our ears," said Assanis, who with several colleagues had discussed such a partnership for about three years. "Finally, what we've been dreaming and working on kind of quietly to establish," he said, had come to fruition.

"This new consortium is allowing us to knit together a web of partners -- and the partners of the partners," said Assanis.

The new consortium for clean coal development and deployment is headed by Jerry Fletcher, professor of energy, environmental and natural resource economics at West Virginia University. Fletcher is also director of WVU's U.S.-China Energy Center, established in 2007 with a focus on coal research.

U.S. industry welcomes team approach

China and United States lead the world in the emission of greenhouse gases -- a race that continues to be fueled by China's expanding consumption of coal.

The United States has the largest car market on the planet, representing about 30 percent of automobiles, worldwide, according to the Environmental Defense Fund, while China's is rapidly growing.

Cutting carbon emissions on a global scale is an ever more challenging task as U.S. and international discussions on regulating greenhouse gases have often fallen short. A tactic that has become more commonplace is the pursuit of technology that will make the emissions reductions in creative, market-satisfying ways.

Just last month, Energy Secretary Steven Chu announced that DOE would invest $1 billion from the American Recovery and Reinvestment Act to resurrect part of the FutureGen project, an experimental zero-emissions coal plant in Illinois.

"The resources and the money that you need to do these kinds of things is mindboggling," said Assanis. But such funds are necessary to "do justice" to the issue of climate change, he said, and collaborations like these are "really the only option we have to deal with the energy challenges on a global scale."

Each consortium has a long list of well-known participants. On just the vehicle side, Michigan is joined by Ohio State University and the Massachusetts Institute of Technology, two national labs, four car companies, utilities such as American Electric Power Co. Inc., and still seven other partners.

Yet, in the week that followed the announcement of the new consortia, a story in the New York Times asserted that China has unfairly subsidized its clean energy sector. A day later, United Steelworkers, the largest American industrial union, filed a 5,800-page complaint with the U.S. Trade Representative saying that China was using trade-illegal moves to "advance its domination" of the clean energy sector.

China has quickly become a powerful force in both the solar and wind renewable energy industries. But when it comes to electric vehicles and carbon capture and sequestration technology, industry says, fear not.

Joint effort needed to accelerate solutions

"It's not surprising that there are partnerships going on," said Brian Wynne, president of Electric Drive Transportation Association, which advocates for electric vehicles, related technologies and supporting industries.

Actually, Wynne said, most of EDTA's membership was already partnered with Chinese companies on some level. "What's going on in these government-sponsored bilateral programs will actually accelerate what's already gotten started."

The mining industry suggested similar feeling on U.S.-China partnerships.

"It seems to make perfectly good sense for there to be collaboration between some of the biggest coal users with the deepest pockets," said Luke Popovich, a spokesman for the National Mining Association. Given the financial and regulatory barriers to carbon capture technology, he said, the industry is willing to work with a partner that will use a "technology-centric solution to address climate change rather than a regulatory one."

In terms of the potential for unfair competition, said Popovich, "I don't think that this mirrors the concerns that people might rightly have in certain high-tech industry or the defense industry."

Wynne argued that the competition violations that resemble the complaint filed by the United Steelworkers last week are "not particularly relevant right now" for electric vehicles. Most collaborations revolve around precompetitive research and development, like the two new consortia. "That's not to say that we don't need to watch out for that in the future when things get more competitive."

Right now, he said, the Chinese electric vehicle industry is addressing the same kinds of concerns as its American counterparts. "We all have an interest in trying to harmonize on the answers. And if we can harmonize on the answers, we can get to scale faster."

"Electric drive will land differently in that market [China] than it will in this one," Wynne said. Different enough, Wynne believes, that competition will be tough but reasonable.

"Primarily, the Chinese have a cost advantage on labor." This advantage, Wynne said, largely goes away when you're dealing with advanced batteries because the precision and consistency required to properly make them precludes building them by hand.

There will be competition, to be sure, said Wynne, but "that typical thing that we think about that the Chinese are going to take our technology and essentially overrun our market with it, I don't think that applies here."

"I think there will be massive demand in their own market for their own batteries," Wynne said. "We need to be able to meet our own demand."

An additional $12.5 million will be will be awarded this fall toward the creation of a third consortium focused on building energy efficiency. The Chinese partners of the consortia will be announced in the next few months.

Copyright 2010 E&E Publishing. All Rights Reserved.

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