BASF buys green electricity + Remedies for the pension gap • China.Table

CO2-neutral energy for BASF in Guangdong
How China can master the aging process
Economist Liu: CAI would have benefitted Germany
Electricity shortages lead to factory closures
Beijing promotes CAI to Poland
Hong Kong: no bail because of the press contact
Artificial intelligence identifies ancient Chinese books
Profile: Jeffrey Ding – AI expert from Oxford

Dear reader,

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, according to Liu.

A good two-thirds of China’s electricity mix is still based on climate-damaging coal-fired power. Therefore, companies that want to switch to 100 percent renewable energies do not have it easy, as Christiane Kuehl reports. Do it yourself, the German chemicals company BASF thinks. The giant has set up a mechanism for the direct purchase of green electricity with the provincial government in Guangdong which makes it a model for other local German companies.

Companies in southern China are currently considering the importance of a secure power supply. Electricity shortages have been occurring there for several days. Factories in some areas have to close three days a week. Climate change is also damaging green electricity from hydropower.

I wish you an exciting read and a great start to the week!

Your
Nico Beckert

Feature

BASF runs a factory in southern China entirely on green power

In China, as well as in Germany, local and international companies are striving to reduce their greenhouse gas emissions. BASF wants to be a pioneer here and is designing a new factory to run entirely on green electricity. This is not easy. But the company is cooperating with the Guangdong provincial government to become independent of the large share of coal in China’s electricity mix.

By
Christiane Kühl

A large firm cannot, as a rule, simply buy the necessary green electricity for a large plant on the market. The necessary infrastructure is required to obtain electricity exclusively from renewable sources 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,” 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 grids are dirty – the only way 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. Therefore, power grids 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. They will need significantly more electricity storage capacities to do that 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.

Continue reading now

… and get free access to this Professional Briefing for a month.

Are you already a guest at the China.Table? Log in now