China steel boomtown maps a low-carbon energy future

03-08-2009, Panzhihua, China

At first glance, the industrial boomtown of Panzhihua, China is an unlikely place for cutting edge sustainability efforts. To most Chinese, the city’s name is synonymous with “Pangang” or the Panzhihua Iron and Steel Company, southwestern China's largest steel producer.

The industry was drawn by the area’s mineral resources, accounting for 21% of the country’s titanium deposits and more than 75% of its vanadium, according to the Panzhihua News. The city’s growth trajectory is also breathtaking: in the early 1960’s this site on a remote headwater of the Yangtze River was home to just seven families near a ferry crossing.

But with the founding of the steel company in 1965, people of many ethnicities began to pour in from all over China, and by 2007 the city had reached a population of more than 1.1 million. Despite its relative youth, the city is listed amongst China’s 118 most energy intensive cities, and it remains very much a steel town with the associated pollution levels and a relatively narrow scope of industries.
Panzhihua

And yet this sub-tropical, mountainous city has still a green streak – quite literally -- with sizable tracts of mountains and ancient forests still intact in the area. According to the online Panzhihua Tour Guide, these areas are home to small pandas and more than 2,300 varieties of plants, the most precious of these being the cycad, a 270-million-year-old species dating back to the time of the dinosaurs.  Jathropa, a biodiesel source, also grows here.

There are also other indicators that this is not just another steel town. The tropical, sunny setting means that mango, papaya and pomegranate are in abundance. Panzhihua University has won a name for itself in piloting education reforms together with scientific research and its practical application. And in 2005, renewable energy accounted for a full 44.3% of total energy production, primarily hydro with a small portion of biogas.  The climate itself also offers great potential for exploitation of solar energy.

But perhaps the clearest indicator of the city’s progressive outlook is the Panzhihua Sustainable Energy City Plan and Action Plan, an exhaustive long-term roadmap put together by the Administrative Center for Panzhihua’s Agenda21 (ACPA) with the support of city officials. This REEEP-funded project covers Panzhihua specifically, but it also consciously acts as a pilot project, generating a methodology, toolkit and manual for integrating energy planning at the city level which can be used all over China.

The plan itself sets three primary goals for the district, where the local supply of coal is likely to run out within two decades:

  • Adjust the industry mix towards services and specialised machining
  • Reduce unit energy consumption and increase efficiency, particularly in transportation, construction and residential use
  • Increase the share of renewable energy in the mix, and to systematically develop it as an industry and thus reduce the cost of renewables.

The effort began with compiling an Assessment Report on the city’s renewable energy and energy efficiency status quo. This called attention to the area’s energy intensity and its high reliance on heavy industry, but also to the huge potential for the expansion of hydro power, solar power and water heating, biofuels and biogas.

In parallel, a manual was developed, on how to go about generating the plan itself, from scoping through to public consultation, resource allocation and the process for action planning. This was summarised in a document that is fully transferable to other cities.

The project itself also promoted interdepartmental cooperation within the government, as key actors came together in a working group for its implementation. A network of energy efficiency and renewables stakeholders was established, which also included organisations such as UN Habitat, the EU ECOPROFIT programme, and the UNDP / Ministry of Science and Technology Green Energy Poverty Alleviation Program.

A training was held for 61 local government officials and stakeholders on China’s renewable energy and energy efficiency laws and policy, with a particular emphasis on biofuels and biogas, identified in the status quo document as having strong local potential.
 
The next stage of the REEEP project which is still continuing, involves identifying two sub-projects to jump-start the implementation process. In Panzhihua, where heavy trucks thunder through the streets and the flow of traffic grows explosively with the population, transportation was identified as one of the areas to tackle first. The two sub-projects reflect this: one to develop a network of LNG (liquefied natural gas) stations throughout the area to make LNG a viable option for trucks and buses locally, and the other to expand jathropa plantations in the area as a source for biodiesel fuel.

As a direct result of the project, renewables and energy efficiency have been integrated into Panzhihua’s strategy energy plan.  To ensure that the Panzhihua experience helps encourage city energy planners elsewhere in China to integrate energy issues with wider city planning issues, a website will be established containing all reference materials created.  The site will be in the Chinese language with short summaries of materials in English.

The project’s indirect results so far are just as impressive. The city’s pro-green stance has led to a raft of sustainable energy developments in the area.  In June the city joined up with China Huitong Credit Guarantee Company and Taiwan Weinan United Technology Company to invest in a solar cell project worth more than US$150 million. The business will be a major production source of thin film solar cells and other solar products. The planned production capacity of solar cells is 150MW per year.  Along similar lines, Suntech recently announced a 500MW photovoltaic project in Panzhihua.

“We are very proud that REEEP is able to support such a pivotal initiative” said Ma Lingjuan, REEEP’s regional coordinator for East Asia. “The Panzhihua Sustainable Energy City Plan and Action Plan has a realistic approach that can be replicated across China.  It’s a good example of how an initiative at city level can influence planning, assist in building capacity with public servants, and raise public awareness.”

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