The Asian Development Bank is supporting the introduction of a low emissions heating system for Hohhot, capital of the Inner Mongolia Autonomous Region. The project will install a hybrid heating system using boilers powered by natural gas and wind. The first-of-its-kind system will reduce coal use to cut pollution and respiratory diseases, with about 30% of the city's population directly benefiting.
|Project Name||Low-Carbon District Heating Project in Hohhot in Inner Mongolia Autonomous Region|
|Country||China, People's Republic of
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Knowledge solutions
|Sector / Subsector||
Energy / Energy utility services
|Gender Equity and Mainstreaming||No gender elements|
|Description||The proposed project will introduce a first-of-its-kind low-carbon, low-emissions, and highly energy-efficient district heating system in the eastern part of Hohhot, the capital of the Inner Mongolia Autonomous Region. The project will demonstrate the efficiency and viability of large-scale natural gas and wind-based district heating in the Inner Mongolia Autonomous Region. Combining these two energy sources will improve the poor air quality in urban areas of the Inner Mongolia Autonomous Region during the winter and help reduce carbon dioxide emissions.|
|Project Rationale and Linkage to Country/Regional Strategy||
The Inner Mongolia Autonomous Region is located in a severe cold climate zone of the People''s Republic of China, where winter temperatures can drop to as low as 40 degree Celsius and subzero temperatures typically last for 6 months of the year. Thus, adequate heating is a basic human need and essential for socioeconomic activities. Coal has been the predominant fuel for heating in the Inner Mongolia Autonomous Region, contributing to indoor and outdoor air pollution and undermining human health. A district heating system with a centralized plant and a network of distribution pipes to provide space heating and hot water is one of the most energy-efficient and least-polluting heating modes in urban areas. Such a system allows heat sources to be located away from densely populated areas and has the flexibility to use a wide range of energy sources. As rapid urbanization increases the demand for heating, heavy use of coal-based district heating will worsen air quality, especially in large urban areas such as Hohhot. Switching to a low-emission fossil fuel, such as natural gas, and emission-free renewable energy is urgently needed.
Hohhot has the highest concentration of urban residents in the Inner Mongolia Autonomous Region. About 10% of the Inner Mongolia Autonomous Region''s total population resides in the city. As urbanization and population growth increase heating demand, Hohhot faces critical gaps in its heating infrastructure. As of 2013, district heating covered only 86.8 million square meters of floor area; existing isolated, decrepit, and inefficient heating systems for an additional 42.0 million square meters of floor area need to be replaced. The hazy skies above Hohhot already have a high concentration of inhalable particulate matter during winter. Through a decree issued in 2013, the Hohhot municipal government promoted the use of natural gas to meet the growing energy demand and address associated environmental and health concerns. The decree includes (i) a natural gas subsidy for residential heating, and (ii) financial support to heating operators that replace small coal-fired neighborhood boilers with natural gas boilers in central business districts. Compared with coal, natural gas emits half as much carbon dioxide, a fraction of particulate matter and nitrogen oxides, and negligible sulfur oxides. Since the decree was issued, the Hohhot municipal government has provided CNY230 million in subsidies for natural gas use and switching from coal to gas boilers. The Hohhot municipal government policy to promote natural gas in district heating is aligned with the central government''s 2013 Air Pollution Prevention Act, which requires all prefecture-level cities like Hohhot to reduce inhalable particulate matter by 10% in 2017 compared with 2012 levels.
The Inner Mongolia Autonomous Region is a resource-rich province. In addition to being the People's Republic of China''s top coal-producing province, the Inner Mongolia Autonomous Region has large reserves of natural gas and excellent solar and wind energy resources. In 2013, the Inner Mongolia Autonomous Region reached 18 gigawatts of installed wind power capacity, equivalent to 25% of the total installed wind power capacity in the People's Republic of China. The Government of Inner Mongolia Autonomous Region plans to increase installed wind capacity up to 50 gigawatts by 2020. The Inner Mongolia Autonomous Region prioritizes combined heat and power plants to meet the electricity and heat demand, rather than electricity-only wind power plants. As a result, many wind farms are forced to disconnect from the grid, particularly at night during the winter when power demand is low but wind power generation is high. In 2013, about 11.3 terawatt-hours of wind power generation was curtailed in the Inner Mongolia Autonomous Region.
The National Energy Administration in the People's Republic of China issued a policy notice in 2013 strongly encouraging the use of curtailed wind power for district heating, which requires high energy use at night during the winter. Both the Government of Inner Mongolia Autonomous Region and Hohhot municipal government are keen to pilot the use of curtailed wind power for district heating, taking into consideration that the current curtailed wind power in the Inner Mongolia Autonomous Region could meet the heating demand up to about 100 million square meters of floor area and contribute to better air quality in the winter by eliminating hazardous emissions from coal-based heating systems. Yet, the Inner Mongolia Autonomous Region currently does not have a business model for using the curtailed wind energy for district heating and needs to gain more insights into the technical and economic challenges before wider deployment. The proposed project will demonstrate a large-scale low-emission and low-carbon district heating system using wind power and natural gas. Because of its easy access to sufficient natural gas and excess wind power, Hohhot is an appropriate choice to demonstrate such heating system. If successful, it can be replicated in the Inner Mongolia Autonomous Region and elsewhere in the People's Republic of China''s northern provinces.
The Asian Development Bank has supported two other projects in the Inner Mongolia Autonomous Region to provide energy-efficient district heating. The Hohhot project is a logical next step to improve energy efficiency and reduce emissions from such projects through advanced natural gas boiler technology. The project will also pilot a new business model to enable sharing of renewable energy subsidies. The project is closely aligned with the Midterm Review of Strategy 2020, which identifies environmentally sustainable growth as a priority for helping developing member countries move onto a low-carbon growth path by improving energy efficiency and expanding renewable energy. The project also supports the goal of Asian Development Bank''s Energy Policy, which prioritizes energy efficiency and access to energy for all, including district heating. It is aligned with Asian Development Bank''s country partnership strategy, 2011- 2015 for the People's Republic of China, which identifies environmental sustainability as one of the three pillars of Asian Development Bank assistance.
|Impact||Improved energy efficiency and cleaner environment in IMAR|
|Description of Outcome||Improved air quality and reduced greenhouse gas emissions in Hohhot|
|Progress Toward Outcome||The cumulative contracted amount is $139 million (93% of the total loam amount). The cumulative disbursement is $92.3 m. The remaining two packages - Package 14 and Package 17, with estimated values of $5.1 m and $4.9 m, respectively, will be advertised in 2020. The project has completed the (i) construction of 36.83 km of long distance heating pipeline; (ii) connection of the long distance heating pipeline to the heat booster pump station in Xinjiaying in Oct 2017, which supplies 9.65 million square meters of heat with 3.16 km of heating network and 13 heat exchange stations; (iii) construction of the office building for monitoring and control in Jinqiao and operations started with three heat exchange stations, and 4 km of heat supply networks; (iv) installation of 140 MW thermal of natural gas heating boiler in Jinaqiao for the heating supply in 2019; and (v) construction of 14 heat exchange stations and 5.08 km of heating network in Haoqinying.|
|Description of Project Outputs||
District heating coverage expanded
Low-carbon and highly efficient heat-generation system installed
A new business model for wind-based district heating piloted
|Status of Implementation Progress (Outputs, Activities, and Issues)||
not yet due
About 36.83 km (of 116.16 km) of district heating pipeline has been completed from July 2016 to August 2018.
As of Nov 2018: 311 thousand tons of coal per year.
By Dec 2018: 230,000 tons
By Dec 2018: 38,000 tons
By Dec 2018: 977,000 tons
2018-2019 heating season: 0.423 GJ/m2
|Summary of Environmental and Social Aspects|
The project is classified as category A for environment. A project environmental impact assessment was drafted and disclosed on Asian Development Bank website on 12 May 2014. A revised draft of the environmental impact assessment was disclosed on 10 July 2014 and a reformatted version of the revised draft was disclosed on 15 October 2014. The environmental impact assessment complies with Asian Development Bank's policies and requirements including Asian Development Bank's Safeguard Policy Statement (2009). The project will avoid 848,500 tons of standard coal, and will emit 60% less carbon dioxide, 82% less nitrogen oxides, negligible particulate matters, and 98% less sulfur dioxide compared with the existing heating supply.
The project identifies potential environmental adverse impacts. During construction, these would include (i) soil erosion; (ii) noise, vibration, and dust; (iii) solid waste, (iv) community disturbance and public safety; and (v) occupational health and safety. During operation, potential adverse impacts would be (i) pollutants emission from the heat sources, (ii) noise from the heat sources and the heat exchange stations, (iii) waste water, and (iv) occupational health and safety. The environmental impact assessment concludes that the construction and operation impacts can be mitigated through the implementation of an environmental management plan, which defines mitigation measures, monitoring requirements, and institutional responsibilities to ensure proper environmental management throughout the project construction and operation.
|Involuntary Resettlement||The project is classified category C for involuntary resettlement. The project does not entail permanent land acquisition. Installing the underground heating pipelines will temporarily occupy the publicly owned land (road and sidewalks) for a maximum of 6 months, which will not cause involuntary resettlement of people. The project will not entail demolition of any structure.|
|Indigenous Peoples||The project is classified category C for indigenous peoples. The project beneficiaries include ethnic minorities. Thus, the project does not have any adverse impact on ethnic minority people.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||
Project information was communicated through public consultation, information disclosure mechanism in Asian Development Bank''s and government''s website, meetings, interviews, focus group discussions, and community consultation meetings, in accordance with Asian Development Bank''s requirements of information disclosure policy.
Two meaningful consultations with stakeholders have been conducted during feasibility study and environmental impact assessment in accordance with the People's Republic of China Interim Guideline on Public Consultation in Environmental Impact Assessment (2006) and Asian Development Bank''s Safeguard Policy Statement (2009). Representatives of 16 communities, 7 community clinics, 14 local government agencies and social institutions, 210 households, and 12 small boiler houses in the project area were consulted through meetings, focus group discussions, and household surveys. Generally, there is a high level of public support for heating service improvements, so the beneficiary communities were very supportive.
The project environmental impact assessment was disclosed at www.adb.org and on the website of the Hohhot City Development, Investment and Operation Company.
|During Project Implementation||
During construction, the affected people will be consulted through formal questionnaire surveys and informal interviews by the environmental management unit and/or the external environmental monitor.
The latest environmental monitoring report covering the period July to Dec 2019 was uploaded on ADB's website in January 2020.
|Consulting Services||All three individual consultants (district heating specialist, environment specialist, and social specialist) are already onboard and are providing support to the implementing agency.|
Taking into consideration the maturity of district heating market in the People's Republic of China and experiences from past district heating projects, Asian Development Bank-financed goods contracts that cost $10 million or more will be procured through international competitive bidding and less than $10 million will be procured through national competitive bidding, using Asian Development Bank's standard bidding documents. Yet, the project will install low nitrogen oxides natural gas and electrode boilers, which are new to the People's Republic of China's district heating market. Therefore, international competitive bidding will still be used for goods packages relevant to new types of heating boilers, which include boilers, heat exchange units, and electric and control system packages even though they are less than $10 million.
Majority of the procurement packages have been awarded in 2017. The remaining two packages--14 and 17, with estimated values of $5.1 m and $4.9 m, respectively, will be advertised in 2020. The cumulative contract award is $138 million, and cumulative disbursement is $91 million.
|Responsible ADB Officer||Yamamura, Shigeru|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||EASI|
Government of Inner Mongolia Autonomous Region
No. 19 Chilechuan Street, Hohhot, Inner Mongolia Autonomous Region, The People's Republic of China 010098
|Concept Clearance||15 Jul 2013|
|Fact Finding||19 May 2014 to 30 May 2014|
|MRM||11 Jul 2014|
|Approval||09 Dec 2014|
|Last Review Mission||-|
|Last PDS Update||23 Mar 2020|
|Approval||Signing Date||Effectivity Date||Closing|
|09 Dec 2014||19 Mar 2015||17 Jun 2015||31 Oct 2020||31 Oct 2021||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||372.70||Cumulative Contract Awards|
|ADB||150.00||09 Dec 2014||137.08||0.00||91%|
|Cofinancing||142.40||09 Dec 2014||92.31||0.00||62%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
ADB Warming Up PRC’S Cold IMAR With Low Carbon, Low Emissions HeatingADB has approved a loan of $150 million to introduce a first-of-its-kind low carbon and low emissions heating system utilizing natural gas and wind power, in Hohhot, capital of the Inner Mongolia Autonomous Region of PRC.
|Contract Title||Approval Number||Contract Date||Contractor||Contractor Address||Executing Agency||Contract Description||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|MIKAEL JAKOBSSON (DISTRICT HEATING EXPERT UNDER NX ITY (BEIJING) ENERGY TECHNOLOGY CO., LTD||Loan 3218||09 Dec 2019||NXITY (BEIJING) ENERGY TECH CO., LTD||RM612 CYTS PLAZA, NO.5 DONGZHIMENNANDAJI E CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||CONSULTANCY||227,940.00||112,657.81|
|SUPPLY & INSTALLATION OF ELECTRIC & CONTROL EQUIPMENT (HAOQINYING HEATING ZONE)/PACKAGE 15||Loan 3218||17 Dec 2018||BEIJING SHUOREN TIMES TECH. CO., LTD (JV)||RM 302&304,RAINBOW BLDG., NO. 1 XINXI RD HAIDIAN DIST, BEIJING, PRC47 CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||SUPPLY OF GOODS||4,767,326.33||4,767,326.33|
|SUPPLY & INSTALLATION OF GAS-FIRED BOILER & ASSOCI ATED EQUIP (HAOQINYING HEATING ZONE)/ICB/PCKG 13||Loan 3218||27 Jun 2018||BEIJING TIANSHI FUT AUTO ENGG TECH CO.&JINAN||FLR W9 BLDG A, NO. 1 CHEDAGOU, HAIDIAN BEIJING, PRC CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||SUPPLY OF GOODS||7,822,421.00||7,674,033.00|
|SUPPLY & INSTALLATION OF HEAT EXCHANGE UNITS & VALVES (JINQIAO HEATING ZONE)/PACKAGE 3||Loan 3218||03 Jan 2018||XIAMEN C&D INC||29F C&D INTL BLDG., NO 1699 HUANDAO EAST RD., XIAMEN, 361008, PRC CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||SUPPLY OF GOODS||3,159,817.00||3,290,998.00|
|SUPPLY & INSTALLATION OF GAS-FIRED BOILER & ASSOCI ATED EQUIPMENT (JINQIAO HEATING ZONE)/PACKAGE 2||Loan 3218||15 Dec 2017||CHINA TEXTILE INDUSTRIAL CORPORATION FOR FORE||18/F CHINA GARMENTS MANSION 99 JIQNGUO RD, CHAOYANG DIST, BIEJING, PRC, 100020 CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||SUPPLY OF GOODS||2,564,802.00||2,564,802.00|
|SUPPLY & INSTALLATION OF HEAT EXCHANGE UNITS, PUMP AND VALVES (XINJIAYING HEATING ZONE)/PACKAGE 10||Loan 3218||02 Dec 2017||HUAXIA HANHUA CHEMICAL EQUIPMENT CO. LTD.||5/F NO. 9 DIXINGJU, ANDE RD., DONGCHENG DIST., BEIJING, PRC CHINA,PEOPLE'SREP.OF||Government of Inner Mongolia Autonomous Region||SUPPLY OF GOODS||7,888,633.00||7,888,633.00|
|Supply & Installation of Electric & Control Equipment (Xinjiaying Heating Zone)/Package 11/Icb||Loan 3218||30 Jun 2017||Shanghai Electric International Economic & T||Area C, No. 1301 Gonghexin Rd., Shanghai, China, People's Rep. of||Government of Inner Mongolia Autonomous Region||Supply of Goods||7,210,000.00||7,210,000.00|
|Supply & Installation of Heating Pipe & Fitting #3 (Jinqiao Heating Zone)/Package 7/ICB||Loan 3218||28 Jun 2017||Haotian Energy Conservation Equipment Co. Ltd||Yanshan County Industrial Park, Cangzhou City, Hebei Province, China, People's Rep. of||Government of Inner Mongolia Autonomous Region||Supply of Goods||26,594,799.00||26,594,799.00|
|Supply & Installation of Heating Pipe & Fitting #2 (Xinjiaying Heating Pipe)/Package 9/ICB||Loan 3218||28 Jun 2017||Haotian Energy Conservation Equipment Co. Ltd||Yanshan County Industrial Park, Cangzhou City, Hebei Province, China, People's Rep. of||Government of Inner Mongolia Autonomous Region||Supply of Goods||34,485,656.00||34,485,656.00|
|Supply of Steel Materials/Package 8/NCB||Loan 3218||26 Jun 2017||Ogawa Seiki Co., Ltd||2-9 2-Chrome, Okubo, Shijuku-Ku, Tokyo 169-0072, Japan||Government of Inner Mongolia Autonomous Region||Supply of Goods||4,239,588.00||4,239,588.00|
|Supply & Installation of Electric & Control Equip (Jinqiao Heating Zone)/Pckg 4/0722-162Fe1428WWH||Loan 3218||18 Jun 2017||Huaxia Hanhua Chem Equip Co, Ltd & Zhejiang||5F No.9 Dixingju, Ande Rd., Dongcheng Di S & 309 Liuhe Rd., Binjiang Dist. Hangzh, China, People's Rep. of||Government of Inner Mongolia Autonomous Region||Supply of Goods||8,092,481.00||8,092,481.00|
|Title||Document Type||Document Date|
|Low-Carbon District Heating Project in Hohhot in Inner Mongolia Autonomous Region: Procurement Plan||Procurement Plans||Nov 2014|