50089-002: Qingdao Rural Waste-to-Energy and Clean Energy Supply in Rural and Suburban Areas Project | Asian Development Bank

China, People's Republic of: Qingdao Rural Waste-to-Energy and Clean Energy Supply in Rural and Suburban Areas Project

Sovereign (Public) Project | 50089-002 Status: Proposed

The project will develop (i) agricultural waste-to-energy systems in four locations in rural areas; and (ii) low-carbon, low-pollution, and energy-efficient heating, cooling, and power production systems in seven locations in rural and semi-urban areas in Qingdao City.

Project Details

Project Officer
Oi, Teruhisa East Asia Department Request for information
Country
  • China, People's Republic of
Modality
  • Loan
Sector
  • Energy
 
Project Name Qingdao Rural Waste-to-Energy and Clean Energy Supply in Rural and Suburban Areas Project
Project Number 50089-002
Country China, People's Republic of
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Qingdao Rural Waste-to-Energy and Clean Energy Supply in Rural and Suburban Areas Project
Ordinary capital resources US$ 100.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Knowledge solutions
Partnerships
Sector / Subsector

Energy / Energy utility services - Renewable energy generation - biomass and waste

Gender Equity and Mainstreaming Some gender elements
Description

The project will develop (i) agricultural waste-to-energy systems in four locations in rural areas; and (ii) low-carbon, low-pollution, and energy-efficient heating, cooling, and power production systems in seven locations in rural and semi-urban areas in Qingdao City.

The agricultural waste-to-energy systems will use carbon-neutral biomethane for power generation and biomass briquettes as heating fuel. The low-carbon heating, cooling, and power production systems in rural and suburban areas, on the other hand, will use cleaner fuel sources, such as natural gas, and waste heat recovered from wastewater at municipal sewage plants, instead of coal. As a result, energy intensity is expected to reduce by 40%, and carbon intensity by 64%, from the averages achieved by comparable standard systems now in use in the northern PRC (The project is expected to achieve average energy intensity of 0.35 gigajoules per square meter (m2), compared with the present average of 0.56 gigajoules per m2 in the PRC, and to produce carbon emissions of 20 kilograms per m2, compared with 70 kilograms per m2 from coal-based systems.). The project will also promote high-quality equipment and system design by organizing technology exchange sessions with providers of advanced technology solutions.

Project Rationale and Linkage to Country/Regional Strategy

Qingdao is in the PRC's eastern Shandong Province, part of the greater Beijing Tianjin Hebei (BTH) region (The greater Beijing Tianjin Hebei region covers the municipalities of Beijing and Tianjin; Hebei, Henan, Shandong, Shanxi, and Liaoning provinces; and the Inner Mongolia Autonomous Region)., where winter temperatures drop to as low as -17 C, and typically stay below 0 C for 5 months during the year. Heating services are therefore essential for public health and well-being and for the sustenance of people's livelihoods in the city.

Qingdao was selected as pilot city for low-carbon development by the government's National Development and Reform Commission in December 2012. One-third of the city's carbon dioxide (CO2) emissions come from residences and heating companies, many of which still use coal-based systems and high-loss heating networks (ADB. 2012. Technical Assistance to the People's Republic of China for Enabling the Protection of Jiaozhou Bay Water Quality. Manila.). For that reason, replacing boilers and centralized district heating networks using coal with decentralized systems using natural gas and fuel from renewable sources has become a high priority for Qingdao in its effort to reduce CO2 emissions (A decentralized or distributed energy system can reduce the amount of energy lost in transmitting heat or power from where it is generated to where it is to be used because the source is within the same building or nearby. Besides, upgrading or expanding current heating pipelines to meet demand is difficult when the underground space for service infrastructure is already congested.).

Like other cities in the BTH region, Qingdao suffers from air pollution caused by industrial coal burning; energy (heating, cooling, and power) supply for residences, commercial and public buildings, and industrial parks; and straw burning in the rural areas. On the supply side, the Qingdao municipal government (QMG) has taken measures to reduce coal burning for energy supply in urban areas. In 2015, it issued a comprehensive policy banning the use of coal in heating systems for new and additional heating areas, and promoting a switch to natural gas and renewable resources (Renewable resources include, among others, biomass, geothermal energy, seawater, and solar energy, as well as waste heat recovered from industrial processes and from sewage.). This policy has been put into effect with Asian Development Bank (ADB) support in the form of a loan approved by ADB in 2015 (ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People's Republic of China for the Qingdao Smart Low-Carbon District Energy Project. Manila.).

In the urban areas, heating systems are being decarbonized and the attendant pollution is being cleaned up. But in the semi-urban and rural areas, coal and unprocessed biomass continue to be used for heating and cooking. Both fuels have high carbon content and increase indoor and outdoor air pollution. As in the urban areas, a move away from coal and toward natural gas and renewable resources must be actively encouraged in the semi-urban and rural areas. Unused biomass in the rural areas should also be converted to other forms of useful energy, such as biogas (for power generation) and biomass briquettes (for heating), to reduce the pollution caused by biomass burning.

On the demand side, low-carbon and clean heating services in the rural areas have had to contend with the challenges of low energy density (As the majority of the people in the rural areas still live in energy-inefficient flat houses and not necessarily in concentrated (low-energy-density) areas, piped heating services or connections with existing district heating networks are not feasible.) and poor housing insulation. Under the central government's urban rural integration initiative, aimed at narrowing the gap in living standards between urban and rural residents, the Qingdao government has been consolidating 5,445 administrative villages into 1,043 new rural communities with a total population of 3,000 to 5,000 within a 1.5-kilometer radius, and expanding the semi-urban areas around the urban centers. These new rural communities will have modern social services and infrastructure, including energy systems (A new rural community typically has blocks of five-story apartment buildings and other social service facilities such as a community clinic, a kindergarten, and a community center. There is a compressed natural gas station in the community and the fuel is piped to each household in the buildings, for use in cooking and heating.). Local energy service providers like the Qingdao Energy Group (QEG), the largest local state-owned energy company in Qingdao, are thus primed to do business in the rural areas.

The project will complement the ADB-financed BTH Clean Air Program (ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People's Republic of China for Air Quality Improvement in the Greater Beijing Tianjin Hebei Region China National Investment and Guaranty Corporation's Green Financing Platform Project. Manila; ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Policy-Based Loan to the People's Republic of China for the Beijing Tianjin Hebei Air Quality Improvement Hebei Policy Reforms Program. Manila.). After the project, its technological innovations and business model can be replicated in other, similar semi-urban and rural areas in the greater BTH region.

The project is closely aligned with (i) ADB's country partnership strategy for the PRC for 2016 2020 (ADB. 2016. Transforming Partnership: People's Republic of China and Asian Development Bank, 2016 2020. Manila.), which supports inclusive rural urban development and pollution control; (ii) ADB's Energy Policy (ADB. 2009. Energy Policy. Manila.), which prioritizes energy efficiency, renewable energy development, and access to energy for all (The project will also contribute toward achieving the PRC's intended nationally determined contributions under the United Nations Framework Convention on Climate Change, to increase the share of nonfossil fuels in primary energy consumption to around 20% by 2030, from 11.2% in 2014. The comprehensive use of agricultural and livestock wastes is one of the important suggested actions to be taken to meet the target.); and (iii) Goal 7 (Ensure access to affordable, reliable, sustainable and modern energy for all) of the United Nations' Sustainable Development Goals.

Value added by ADB. The project will promote the procurement of high-quality equipment and system design in partnership with the Danish Board of District Heating, the Swedish District Heating Association, and the Asia Pacific Urban Energy Association by organizing technical knowledge exchange sessions during project implementation between the QEG, the local design institute, and technology and solutions providers from Denmark, Sweden, Japan, the United States, and other countries.

Impact Low carbon and energy efficient rural and semi-urban energy systems promoted.
Outcome Avoidance of carbon and pollutant emissions from energy supply systems in rural and semi-urban areas in Qingdao
Outputs

Waste-to-energy systems constructed in rural areas in Qingdao

Clean energy supply systems constructed in semi-urban areas in Qingdao

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects An initial environmental examination report will be prepared. Climate change risk to the project is medium and will be assessed during the project preparatory technical assistance. No environmentally sensitive area anticipated to be identified in the vicinity of the project area but this will be confirmed during the project preparatory technical assistance.
Involuntary Resettlement No land acquisition impacts are anticipated and this will be confirmed.
Indigenous Peoples The project site is not located close to any ethnic minority towns or villages. Thus, it is not expected to have adverse impacts on ethnic minorities.
Stakeholder Communication, Participation, and Consultation
During Project Design Project design is being finalized as discussed during the FF mission last 13-16 March 2018.
During Project Implementation
Responsible ADB Officer Oi, Teruhisa
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Qingdao Municipal Government
c/o Qingdao Mun.Devt.& Reform Commission
No. 11 Xiang Gang Zhong Road, Qingdao
People's Republic of China 266071
Timetable
Concept Clearance 29 Sep 2016
Fact Finding 12 Mar 2018 to 16 Mar 2018
MRM 06 Jul 2018
Approval -
Last Review Mission -
Last PDS Update 23 Mar 2018

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.

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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.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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Procurement Plan

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