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People’s Daily Online (China): Shell looks to expand into renewable energy

6 June 2006

“Sustainable development” has become a familiar catchphrase in China these days.

It is heard in many high-profile forums, roundtable meetings and summits, mostly in relation to energy.

To some, it is simply a clich uttered by government officials who want to look good and get noticed by the central leadership.

But to Lim Haw Kuang the phrase really means something.

“It’s a balance between the economy, society and the environment, making them come in line with the ultimate objectives of both our company and of the country,” said Lim, a Malaysian of Chinese origin who is now head of the China business at Royal Dutch Shell.

The Chinese Government has set itself a challenging target to reduce the amount of energy it uses per unit of GDP by as much as 20 per cent within the next five years.

A new law on renewable energy was put into effect at the beginning of this year, with the aim of pushing the use of alternative energy sources, such as wind and solar power.

With huge market potential in China, Lim said he sees great opportunities to work in partnership with local governments to introduce Shell’s clean and innovative energy solutions, such as clean coal, gas-to-liquids, hydrogen and wind power.

“Sustainable development is Shell’s core value and business principle,” Lim said.

The Anglo-Dutch firm is now working with a “big” Chinese company to develop wind farms in the country to generate electricity, Shell China executive chairman disclosed.

“We are in detailed talks about the first wind power plant in China, and hope to finalize the deal this year,” he said. “It is not a small project.”

If successful, the project will mark Shell’s first thrust into China’s wind power market, which has been coveted by both domestic and international energy conglomerates.

Lim declined to reveal details concerning the project, such as total investment and installed capacity, but said this was only the start of the firm’s wind power development plans in China.

Shell has selected two to three places in China to develop wind farms, and tariffs are a major factor affecting the company’s investment in the renewable energy field.

“I remain very confident about developing wind power projects in China,” said Lim.

Wind is considered by industry experts and government officials to be the most feasible energy alternative source in the near future.

Compared with other options, such as solar and biomass, wind power is less expensive and easier to set up.

The Chinese Government aims to build wind power facilities with a capacity of 30,000 MW (megawatts) by 2020 from the current 1,000 MW.

Besides wind, the global energy firm is also turning to solar and hydrogen, which is seen by insiders as the next-generation fuel.

Last year, Shell’s solar division won two contracts, totalling US$14.3 million, to supply solar panels to more than 100 villages in Northwest China’s Qinghai Province, Xinjiang Uygur Autonomous Region and Southwest China’s Yunnan Province.

The two projects are being funded by the German State-owned development bank and China’s Ministry of Finance.

It follows the company’s participation in a US$25-million joint Chinese-Dutch development project to provide solar power to some 78,000 households in Xinjiang.

In an even more far-sighted move, Shell has signed an accord to partner one of Shanghai’s top universities, Tongji University, to build the first hydrogen filling station in the Chinese commercial hub.

Expected to be completed by the end of this year, the hydrogen station is part of the country’s national programme to develop electric vehicles.

“It is an experimental and pilot project in China, designed to help meet the country’s surging energy demand and lower environmental pollution,” Lim said.

On the new technology front, Shell has also been an active player in exploring new solutions to enhance energy efficiency.

The company has initiated a worldwide energy management programme to help refineries and petrochemical complexes cut energy costs and reduce their carbon dioxide emissions.

“Our experience in Europe, Asia-Pacific and North America has resulted in energy reductions of between 2-7 per cent for oil refineries and 3-5 per cent for petrochemical plants,” Lim said.

Currently, Shell is working to introduce the new initiative to China’s refineries and petrochemical plants.

Up to now, the Dutch firm has clinched 15 deals to supply coal gasification technology to China, one of which is a 50-50 joint venture with the country’s biggest oil refiner Sinopec.

Shell’s coal gasification process has so far been used to produce synthesis gas for the manufacture of fertilisers, hydrogen and methanol.

Through another partnership with State-owned Shenhua Ningxia Coal Ltd, Shell is working with the coal mining company to use Shell’s indirect coal-to-liquids technology to turn coal into clean oil products, such as gasoline and diesel, in Northwest China’s Ningxia Hui Autonomous Region.

“We see tremendous opportunities in China to develop the coal-to-liquids technology, as global crude prices are soaring and China is so rich in coal,” Lim explained.

Source: China Daily
People’s Daily Online —

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