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the EU-China investment agreement (CAI) was supposed to open up the Chinese market and restrict onerous practices such as technology transfer. Now the agreement is on hold for the time being. And that could have far-reaching consequences for European companies in the near future. Felix Lee spoke about this with Liu Wan-Hsin. The economist at the Kiel Institute for the World Economy warns: Beijing is striving for independence from foreign countries. Companies will soon have to relocate factories to China. The CAI, on the other hand, would have ensured fairer competition. The halt to ratification is understandable and at the same time regrettable, says Liu.
A good two-thirds of China’s electricity mix is still based on climate-damaging coal-fired power. Companies that want to switch to 100 percent renewable energies therefore do not have it easy, analyzes Christiane Kühl. Do it yourself!, thought BASF. The chemical giant has set up a mechanism for the direct purchase of green electricity with the provincial government in Guangdong. A model, then, for other local German companies.
Companies in southern China are currently noticing how important a secure power supply is. Electricity shortages have been occurring there for several days. In some areas, factories have to close three days a week. Climate change is also damaging green electricity from hydropower.
I wish you an exciting read and a good start to the week!
Nico Beckert
Feature
BASF runs factory in southern China entirely on green power
As a rule, a large company cannot simply buy the necessary green electricity for a large plant on the market. To obtain electricity exclusively from renewable sources, the necessary infrastructure is needed, as well as the cooperation of the electricity grids and the electricity market operator. This is the only way to make climate targets practically feasible. The chemical company BASF has now initiated such cooperation in the southern province of Guangdong. The Ludwigshafen-based company wants to build a Verbund site in the city of Zhanjiang that will be supplied with 100 percent green electricity in its first phase – and has initiated a mechanism with the provincial government for the direct purchase of green electricity starting in 2019.
At the time, the company said it proposed the Renewable Direct Power Purchase (R-DPP) concept to local authorities, which it had developed together with the China Resources Power group. “Under this system, we purchase emission-free power directly from the relevant renewable energy source through the grid operator,” BASF’s Haryono Lim told China.Table. “In the traditional system, we could only get electricity from the public power grid,” he said, adding that BASF was responsible for the “Project New Verbund Site China”. The German word “Verbund” has entered the international jargon of the industry here.
The Net is dirty – the only Thing that helps is to do it yourself
A mix of different energy sources with a high proportion of coal-fired power is fed into the normal power grid. Renewable energies currently account for only about a quarter of China’s electricity mix. The power grids therefore have a crucial role to play in China’s transition to climate neutrality. They must break the coal primacy and pass on more green electricity on a pro rata basis. To do this, they will need significantly more electricity storage capacities, since electricity from wind and sun is subject to strong fluctuations due to changing weather conditions. And finally, grid operators must make it possible for corporate customers to buy green power directly – as is now happening in Guangdong – through technical and regulatory means.
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