Assisting Energy Transformation through the Technology Assessment & Dissemination Platform
Dr. Xavier Chen, President, Beijing Energy Club
(This is the transcript of the speechdelivered by the author at the BEC’s TAD platform launch conference on 23rdApril 2016.)
In my speech today, I will endeavour to address three questions.
The first question: why does clean energytechnology need assessment and dissemination?
As you all know, both China and the rest ofthe world require largescale deployment of clean energy technologies to combatlocal air pollution, to mitigate climate change and to realize global energytransformation. China is the world's largest energy producer and consumer aswell as one of the largest providers of clean energy technology solutions.
However, on the one hand, Chinesetechnology solution providers, including Dalian Rongke which is present today,often lack an indepth understanding of the market (both in China and outside),of policy incentives, of regulatory requirements and of marketing approaches.Foreign technology owners have many difficulties in access to the Chinesemarket. Traditional ways of matchmaking are not efficient enough, involving alot of travel and meeting time. Many trials and errors are required for atechnology owner to find the right market partner.
On the other hand, parties in the end-use market who have a need for certain technology solutions have no idea which technologyowner provides the best technology solution and which solution to select. Lackof control of risks in connection with new technologies leads to higherfinancial costs and affects clean energy projects that have a long lead timefor construction and operation. International financial institutions such asthe Asian Development Bank have decided to increase investment in clean energytechnologies, but they can’t find quality projects to invest in.
As a result, clean energy technologydeployment has been slow. Technology owners need an efficient platform foraccess to the market, but also to all the other skills to make their technologydeployment fully successful. For instance, a fuel cell technology provider whohas a need for its fuel cells to go to the market will have a need forassociated facilities to support the application of its fuel cells and hence apotential need for an integrated promotion together with associated technologysolutions. Capital owners who need to find proper investment projects will needsuch a platform to find the best technology with objective expert assessment toreduce investment risks.
As indicated by the logo of the Club, BECis a group of people from different backgrounds and with different thoughtsgathering under one roof to jointly pursue solutions to global energy issues.It was set up on 13th December 2008 and the logo was unveiled by Mr. RobertPriddle, former Executive Director of the IEA and Mr. Wu Guihui, then Chie fEngineer and Head of International Co-operation Department of the NationalEnergy Administration of China.
The Honorary Board of the Club is made up ofChairman Zhang Guobao (former Administrator of the NEA), Vice Chairman FuChengyu (former Board Chairman ofSinopec and CNOOC), Vice Chairman Zhou Dadi (former Executive Vice-Chairman,China Energy Research Society), Vice Chairman Shi Dinghuan (formerSecretary-General, Ministry of Science and Technology), and International ViceChairman John Browne (ex-CEO of BP and President of the Royal Academy ofEngineering, UK).
As Administrator Zhang Guobao andCounsellor Shi Dinghuan have just noted, the BEC is composed of energy sector experts, entrepreneurs, company executives and senior officials both from home and abroad. Lastyear senior officials speaking at the Club included the Executive Director ofthe IEA, Secretary General of the Energy Charter, and the Oil Minister of SaudiArabia. This year, we have held four meetings so far, with the latest one on“Decarbonization, Digitization, and the Future of the Global Energy System”, aspeech by Group President and CEO of DNV-GL, the Norwegian-German classification society.
Evidently, the BEC is a highend platformand has a pool of experts. For better communication in the information age, wehave put into operation an official website, which has quite an impressivedesign, and a public WeChat platform. If you haven’t already subscribed, then Istrongly recommend that you do. About half a dozen energy-related postings, allwith real substance, are published on this platform every day. The platformoperator says that the it is frequently accessed by about 16,000 fans. If youhave good postings, you can send them to us so that they get disseminated throughour platform.
About this time one year ago, we started adiscussion in the Club’s WeChat group on how to do something practical on thebasis of the Club’s advantages. I actually consulted Administrator ZhangGuobao, who, as indicated in his note of congratulations, has always encouragedus to do something practical. The Club’s advantages, in my view, lie in itspool of expert resources, the attractiveness of the Chinese market, innovationin China and international access.
Through the Club, one can gain access tothe most excellent experts in the energy sector or energy-related sectors, notonly from China, but also from the rest of the world.
China has a strong need for cleantechnology and the Chinese market is very appealing to international technologyowners who want to market their technology solutions to potential Chineseusers. And, here we are, in Beijing, the heart of the Chinese market.
As Counsellor Shi has said, the governmentencourages innovation. A lot of entities, whether state-owned or private-ownedor foreign-funded, and individuals are working on innovations and have builtstrong capabilities in innovation. A platform is needed for these differentcapabilities to interact. An example is Dalian Rongke, whose technology will beassessed very soon.
Internationally, there are other platforms,such as the platform in Singapore, the platform under the World IntellectualProperty Organisation (WIPO), and the platform under the InternationalRenewable Energy Agency (IRENA). These platforms need an interface in China.The TAD is a perfect choice for them.
So, what is the purpose of the TAD? Thepurpose is to add real value for all stakeholders, including technologyproviders, technology users and potential investors, and accelerate energytransformation. To put it in a different way, the platform aims to find themarket for technology owners, facilitate them with needed resources, and makedissemination and promotion for them. It is true that technology providers cando marketing on their own, but convincing the recipients is no easy job. Thismay explain why people say “every potter praises his own pot”. However, thisdifficulty will be solved after an objective assessment is made through ourplatform. The platform will also assess potential risks, including those whichtechnology providers may not have identified. Thus, technology providers willbenefit from expert input, be it precaution, advice or recommendation.
The Club resolved at the beginning of thisyear that new moves would be made in the unfolding year. While continuing toplan and organize high-ranking dialogues and discussions (four sessions havebeen delivered so far this year), we initiated “Closer to the Industry”Programme, starting with Beijing Gas Group, which hosted a field tour for BECmembers on 29th March. We were warmly welcomed by the Chairwoman and theGeneral Manager of the capital city’s gas utilities, visited its ControlCentre, Customer Service Centre, and CHP facilities, and spent two hoursdiscussing the development of city gas in China. A lot of recommendations weremade on how to accelerate city gas development in China and on futuredevelopment of BGG. The programme was beneficial not only to participants fromthe Club, but also to the host company. Another move is to launch the CleanEnergy Technology Assessment & Dissemination platform right here on thisvery day, with the aim to serve energy transformation in China and the rest ofthe world. We use the initials TAD to refer to this platform. I’ll explain whylater.
Now we come to the second question: what isthe proper methodology and means that we have and can apply to assessment anddissemination?
We will employ a methodology for assessmentdesigned and developed over the past half a year’s time with the support of theAsian Development Bank, especially with the significant contributions by Dr.Zhai Yongping, Ms. Cao Qiyong and Ms. Su Liya. It is a four-dimensionalassessment methodology, which will be applied to any clean energy technology orsolution.
The first dimension is about theattractiveness of a technology or solution. It serves to evaluate 1) if thetechnology or solution is mature or not, sophisticated or not, and easilyduplicated or not, 2) if associated facilities are required or not, 3) if theanswer to 2) is yes, then what associated facilities will be required, 4) theimportance of the technology or solution in the system where it will beoperating as a part of, and 5) if the technology or solution is dispensable inthat system or if that system can operate without it.
The second dimension is about the marketpotential of a technology or solution. This dimension aims to identify theareas/places for the application of the technology or solution, determine thescale of the market, evaluate the affordability of potential users and theeconomics of the technology or solution, and assess the business model formarket development.
The third dimension relates to governmentpolicies and incentives. It endeavours to determine 1) if there are governmentpolicies supporting a technology or solution or not, 2) if the answer to 1) isyes, then in what ways government policies are supporting the technology orsolution, 3) if the support is from a local government or the Centralgovernment or both, 4) the form of support (subsidies or tax refunds), and 5)barriers to market access (if there is access for private and foreign-fundedenterprises).
The fourth dimension, which is of equalimportance, is about the impacts on health, safety and environment (HSE). Thisdimension seeks to understand the impacts, during production and application,of a technology or solution on health, safety (any fire or explosion hazard),local environment and climate, carbon dioxide emissions, and consumption ofresources in the full lifecycle of the technology or solution.
In addition to the four dimensionsdescribed above, we will need to cover two other issues. One is the prospectfor a technology or solution and the other is the potential commercial,technical, and other risks that may arise in the course of applying thetechnology or solution.
We will employ a spider-web assessmentdiagram and evaluate each dimension with a score of zero to five. We do have adetailed assessment methodology and have emailed it to the judges presenttoday. They know what score to give and will explain why. This is what we thinkmakes objective assessment.
The means or vehicles for dissemination ofa technology or solution includes the Club’s website and WeChat platform andmedia partners, many of which are present today, such as Bloomberg and ChinaEnergy News. More importantly, we have the “key” to disseminating a technologyor solution. This “key” is in the form of recommendations from the members ofthe Club. We are pretty good at this. As a matter of fact, one of our strengthsis the summary report with real material following every activity organized bythe Club.
Our recommendations are made to all stakeholdersinvolved in the dissemination of a technology or solution.
First, we make policy and regulatoryrecommendations to the government. Against the backdrop of the 13th Five-yearProgram being implemented in China, the Club held a session on energy storageon 27th October last year. The summary report recommended the NEA to make adedicated plan for energy storage technology during the 13th Five-year period.Similarly, the discussions and recommendations to be made later today cancontribute to the dedicated energy storage planning.
Second, we make recommendations to therelated industries working on this or other similar technologies. For example,Rongke’s flow batteries can be used in the electric power system, in industrialzones, and in households. Evidently, the most important user is the electricpower system. So, apart from the energy storage industry itself, what shouldthe electric power system do to help disseminate Rongke’s energy storagetechnology?
Third, we make recommendations to the technologyowner company, who are using this platform to disseminate and spread theirtechnology or solution. For instance, we will give advice to Rongke as to whatit should do to improve and better disseminate its technology.
Fourth, we make recommendations toend-users of the technology on what to do and what not to do when they adoptthis technology.
These recommendations add more value thanjust media publicity.
We know that technology assessment needs tobe based on a scientific methodology. In fact, we have learned from thenine-level technology readiness measurement system used by the NASA, U.S. DOE,and EU and the technology added value system adopted in China, which involvestwelve levels – three levels for commercial application plus nine levels fortechnology readiness.
That’s really a lot of levels. So we havesimplified into five levels, including:
1) Scientificconcept,
2) Labprototype,
3) Pilottest,
4) Commercialproduction, and
5) Massapplication.
We want to be pragmatic. Too many levelsmake things complicated and experts confused.
Then, in what form will we have technologyassessment and dissemination? We are considering three forms.
The first one is the BEC Lecture. Up tonow, we have held five lectures, including Dr. Zhai’s lecture on how Chinashould export its soft power in energy, Cao Yin’s lecture on the energyInternet last year, and an American professor’s lecture on limited partnershipbetween the U.S. and Russia on 17th February 2016. This form has proven to be agood one with good results.
The second one is like The (Best) Voice ofChina, or The (Best) Technology of China, as Counsellor Shi has just put it.The owner of a technology will present his or her technology for judges toassess and comment on.
The third one is like the TED, or TEDTALKS,which is very famous in the U.S. Whoever speaks at the TED will become famous.It is our hope that the Club creates and builds the TEDTALKS of the cleanenergy sector. That is why we have chosen TAD, the initials of TechnologyAssessment and Dissemination. As TED is about ideas worth spreading, TAD isabout technologies worth disseminating.
Now I come to the third and final question:why have we selected Dalian Rongke as the first company to present itstechnology for assessment at the TAD?
I believe you have read in your invitationsthat energy storage is a fundamental precondition indispensable to the adventof a low-carbon society for human beings as well as a necessary prerequisite tothe promotion of energy transformation. At a time when renewables includingwind power and solar energy are having a substantial growth and many countriesare encouraging and expediting distributed microgrids and smart energy systems,significant room for growth has beencreated for energy storage technology deployment.
Authoritative international institutionslike McKinsey deem energy storage technology as one of the twelve disruptivetechnologies that will impact the world in the future. They estimate thatglobally energy storage technology may make an economic contribution of up toor more than 1 trillion U.S. dollars by 2025.
Energy storage technology can play a rolein almost every part of the electric power system. At the generation end, whenworking with traditional generation technology, energy storage serves toimprove the grid connection ratio of clean energy, provides auxiliary services,and helps to stabilize the voltage and the current in the instance of instablesolar energy and wind power. In transmission and distribution, energy storageplays the role of peak shaving. At the user end, energy storage storesrenewable energy in situ, provides uninterrupted power supply and provideselectricity to remote areas and even islands. As an integral part ofdistributed supply and smart grid system, energy storage holds a significantrole in the energy Internet.
You all know that China is the world’slargest producer of lithium batteries, with a capacity of 5GWh in 2014 and withextensive applications in mobile phones and automobiles. But you may not knowthat China is also the largest producer of another advanced grid-grade energystorage system, the vanadium flow batteries, co-developed by Rongke and CASDalian Institute of Chemical Physics with 100% proprietary intellectualproperty rights.
These are the reasons why we have given thefirst opportunity to Rongke to present its technology for assessment at theTAD. I appreciate the trust by Mr. Liu Yanhui, Board Chairman of Dalian Rongke,who has sent their top experts to present their technology.