FUXIN, China (Reuters) - China's plans for its massive coal sector in the next 10 years include introducing new "clean coal" technologies.
Here are five that China is experimenting with:
COAL TO LIQUIDS
Coal-to-liquids was once regarded as one of the most exciting technologies. Dozens of projects were launched as Beijing looked for alternatives to crude oil imports. China went cold on CTL in 2008, suspending most of the projects on concerns the technology was expensive and wasted too much water, especially in poor, arid regions.
Experts regard CTL as an emergency measure, and it is no coincidence the liquefaction technologies were developed by fuel-hungry Germany during the Second World War and embargo-hit South Africa during the apartheid era.
A CTL plant built by the state-owned coal giant Shenhua Group is expected to produce 11 million metric tons of oil products a year by 2020, up from less than 1 million metric tons this year, said the company's general manager for science and technology, Gu Dazhao.
Work was also allowed to continue on a project in arid Ningxia province, designed with South African energy giant Sasol, but it still has not been given the final go-ahead.
Other smaller projects are being built, and China is expected to have a total CTL capacity of 30 million metric tons by 2020, said Cao Liren, chief engineer of the China Synfuels Corp at a recent conference. Apart from its excessive use of water, CTL also does nothing by itself to address a more pressing global concern -- carbon dioxide emissions. But CTL shows signs of making a comeback, especially if it can be combined with other technologies like carbon capture and storage.
CARBON CAPTURE
The International Energy Agency says carbon capture and storage could provide as much as 18 percent of China's required CO2 reductions in the coming decades, but progress on the technology has so far been slow. It allows CO2 to be separated from the coal combustion process and stored in underground sites such as saline aquifers or depleted oil wells.
China's advantage is that it can drive the development of new technologies by forcing state-owned firms such as to build expensive demonstration projects, which Shenhua and Huaneng are doing.
Shenhua is building a carbon capture and storage facility alongside its CTL plant in Inner Mongolia, and will begin storing CO2 early in 2011. Officials have complained openly that both facilities are prohibitively expensive.
Representatives from Huaneng, China's biggest power generator, have also said CCS is very expensive, though it is going ahead with two pilot projects in Beijing and Shanghai.
Not only does CCS significantly increase costs, it also reduces the efficiency of a power plant, and for that reason, would require subsidies, or at the very least, a price on carbon.
CCS has received little tangible state backing so far as the government waits for possible support from rich nations under a global climate change protocol.
INTEGRATED GASIFICATION COMBINED CYCLE
The "Greengen" project in the northern municipality of Tianjin is one of China's flagship pilot clean coal projects. It relies on a self-designed integrated gas combined cycle technology. Its first phase, which consists of a 250 megawatt power plant, is expected to begin generating electricity by the end of 2011.
The project, which will eventually include a large laboratory looking specifically at issues like CCS, is being led by state power giant Huaneng and counts Peabody among its investors, Qi Chunsong, vice-president of the project, said IGCC was "an inevitable choice" for China but he conceded the economics were not attractive.
"It will never be commercial in the sense that it doesn't require preferential policies. If the government wants to give support to clean coal then it becomes an option and the economics start to work," he told Reuters.
COALBED METHANE (CBM)
Harvesting the methane that builds up in China's notoriously gas-heavy coal mines has also become a key industry strategy. Collecting and using CBM would reduce the risk of mine explosions, create a new and cleaner energy source and prevent a greenhouse gas from entering the atmosphere.
China has more than 200 billion cubic meters of CBM reserves and expects to produce 2 bcm this year. Volumes are likely to rise steadily in the next decade. But the process is complex and production costs high.
UNDERGROUND COAL GASIFICATION (UCG)
Technologies aimed at gasifying coal before it is mined have been in development for half a century. China has launched 16 demonstration projects, including one in collaboration with U.S. utility Duke Energy.
By eliminating the need to bring coal to the surface, UCG could improve safety and help boost China's coal recovery rates, experts say. But developers find it difficult to commercialize.
(Reporting by David Stanway, editing by Bill Tarrant)
