China, People's Republic of: Utilization of Renewable Shallow-Ground Geo-Energy

Sovereign Project | 41089-012

Summary

The goal of the small scale advisory technical assistance (SSTA) will be to reduce GHG emissions from enery use for space heating and cooling. EverSource will be considered the case study for corporate and private sector participation in promotion of SG-GE.

The SSTA will focus on critical areas that are pivotal for promoting SG-GE systems in PRC> Most parts of the study will be internet-based desk studies and would only collect and analyze information from existing sources and expert consultations. The scope of the SSTA will include (i) exploring opportunities and challenges for use of SG-GE systems in PRC, (ii) developing appropriate business models and corporate strategies for promoting SG-GE, and (iii) preparting outlines of four demonstration projects.

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Project Name Utilization of Renewable Shallow-Ground Geo-Energy
Project Number 41089-012
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 4975-PRC: Utilization of Renewable Shallow-Ground Geo-Energy
Technical Assistance Special Fund US$ 150,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Energy - Renewable energy generation - geothermal
Gender Equity and Mainstreaming No gender elements
Description

The goal of the small scale advisory technical assistance (SSTA) will be to reduce GHG emissions from enery use for space heating and cooling. EverSource will be considered the case study for corporate and private sector participation in promotion of SG-GE.

The SSTA will focus on critical areas that are pivotal for promoting SG-GE systems in PRC> Most parts of the study will be internet-based desk studies and would only collect and analyze information from existing sources and expert consultations. The scope of the SSTA will include (i) exploring opportunities and challenges for use of SG-GE systems in PRC, (ii) developing appropriate business models and corporate strategies for promoting SG-GE, and (iii) preparting outlines of four demonstration projects.

Project Rationale and Linkage to Country/Regional Strategy

Concerned with the serious environmental impacts of a high use of fossil fuels, the Government of People's Republic of China (PRC) has announced obligatory targets to reduce energy consumption per unit of GDP by 20% and total emission of major pollutants (sulfur dioxide and chemical oxygen demand) by 10%. The promotion of renewable energy sources will be essential for achieving this challenging target. The guidelines recommend preferential financing and taxation, suitable investment policies and mandatory market share of renewable to encourage the production and consumption of renewable energy and increase its proportion in the primary energy consumption. Specific mention is made for accelerating the development of wind power (target 5 GW by 2010), biomass- (from forests) and stalk-based (from agro waste) power generation (5.5 GW), waste incineration, and bio-fuels (ethanol and bio-diesel oil). Further, the Government will actively promote the development and utilization of solar energy, geothermal energy and ocean energy?the technologies that are yet to become commercially viable.

PRC achieved the major economic targets during 2006, but the energy consumption per unit of GDP decreased only by 1.33%. This has led to grave concerns and the Government wishes to redouble its efforts to control energy use, by slowing investments in production and aggressively promoting renewable energy. Reducing fossil fuel use and thereby limiting the growth of greenhouse gas (GHG) emission in PRC are also of global significance.

Use of geothermal energy has a very long history. It is a renewable resource that has been used for centuries for therapy and since mid 1900s, for raising steam to generate power. However, such geothermal-based power plants could only be located in regions with the right geological condition that allows recovery of heat contained in the earth?s mantle.

Since late 1990s, considerable research and development (R&D) has been carried out to utilize another form of geothermal energy?that enables the temperature at depths of 30?200 meters to remain constant during all weather conditions, in the range of 7?13 degrees Celsius (0C) depending on the depth. If water at any temperature (near 4 0C during winter, or above 30 0C in summer) is pumped into the ground in tubes, the underground heat transfer system can be suitably designed so that the returning water is about 10 0C. This source/sink of heat can then be transformed for low energy application, i.e., space heating and cooling. For heating, a heat pump (using principles of refrigeration but in reverse) is used; and for cooling in summer, a source of low temperature water becomes available for air handling units. There are now over 1.5 million installations of shallow-ground geo-energy (SG-GE) in Europe and the USA.

PRC understands that SG-GE contributes toward energy conservation and environmental protection. Several government agencies, including the National Development Reform Commission (NDRC), the Ministry of Finance (MOF), Ministry of Construction (MOC), Ministry of Land and Resources (MOLR), and State Environmental Protection Administration (SEPA) have indicated strong support to exploring effective ways to scale up SG-GE utilization to reduce peak-period demand for air-conditioning in summer and space heating in winter, substitute fossil fuels, avoid addition of new power generation capacity, and reduce emission of carbon dioxide, sulfur dioxide, and other pollutants. The unit cost of utilizing SG-GE can be lowered through economies of scale, technological progress and targeted policy and fiscal support. When this happens, more people in the low-income group can afford to have access to heating and cooling services based on clean and renewable energy.

The Beijing EverSource Science and Technology Development Co., Ltd (EverSource) is committed to developing this innovative renewable energy resource in PRC. Since late 1990s, it has installed SG-GE systems for more than 3.5 million square meters of building structures in more than 100 locations, including the National Opera House and several stadiums for the upcoming Olympic Games in Beijing. As one of the industry leaders for SG-GE utilization, EverSource has offered to make its corporate resources (including existing installations, on-going projects, past and current audited financial statements, future development plans, and patented technologies) available for case studies to help promote the use of SG-GE systems. Other participants, including major users, designers, installers, and equipment manufacturers of SG-GE systems will also be consulted. The final results of the small-scale advisory technical assistance (TA) will be disseminated widely and publicly to boost the growth of the whole market of SG-GE systems.

In its Medium-Term Strategy II (2006?2008), Asian Development Bank (ADB) has identified energy as a core operational sector and achieving environmental sustainability as a strategic priority. ADB?s overall energy sector strategy hinges upon (i) providing cost-effective energy services to sustain economic growth and to alleviate poverty; (ii) facilitating private sector involvement in energy sector development; (iii) mitigating environmental pollution; and (iv) promoting regional energy cooperation. Recently, greater focus is on addressing energy security and climate change through improving energy efficiency and enlarging uses of indigenous clean and renewable energy. ADB has also introduced initiatives (e.g., the Energy Efficiency Initiative (EEI) and the Carbon Market Initiative [CMI]), and adopted new and more client-oriented lending modalities (e.g., multi-tranche financing facility and non-sovereign operations) to reinforce its assistance to the developing member countries for acquiring low-carbon technologies and to implement energy efficiency and renewable energy projects.

PRC and ADB priorities and strategies in the energy sector are well aligned. Utilizing SG-GE systems to displace fossil fuels will lead to higher energy efficiency, renewable energy development, and reduction in GHG emissions.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Two international consultants and three national consultants will be contracted by ADB in accordance with the Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers (2007, as amended from time to time). All international and national consultants will be selected on an individual basis. The total input is envisaged as 2.5 person-months for international consultants and 12 person-months for national consultants.
Responsible ADB Officer Hongliang Yang
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Ministry of FinanceMr. Licheng Yao, Deputy Director, IFI Division IIISanlihe, Xicheng District Beijing,100820 People's Republic of China
Timetable
Concept Clearance 30 Jul 2007
Fact Finding 31 Jul 2007 to 03 Aug 2007
MRM -
Approval 02 Oct 2007
Last Review Mission -
PDS Creation Date 09 Aug 2007
Last PDS Update 04 Oct 2010

TA 4975-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Oct 2007 - 02 Oct 2007 29 Feb 2008 31 Dec 2010 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
150,000.00 0.00 138,500.00 0.00 0.00 0.00 288,500.00 02 Oct 2007 98,222.57
Title Document Type Document Date
Utilization of Renewable Shallow-Ground Geo-Energy TA Completion Reports Nov 2011

Safeguard Documents

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Evaluation Documents

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