Technology development

This section shows that partnerships with the function of innovation and technology development are prevalent in Rizhao. These partnerships are created both through top-down and bottom-up dynamics. In particular, bottom-up connections play an important role in in the introduction of energy saving and emission reduction technology in firms.

Research partnerships though top-down dynamics

To encourage innovation, Rizhao Municipality has established “government-led, business- oriented” platforms for technology development. By the end of 2012, Rizhao boasted a long list of such platforms: two national enterprise technology centers, 22 provincial engineering technology research centers, five provincial academic workstations and a provincial key laboratory. These centers cooperate with “innovative pilot enterprises”, as well as with researchers from think tanks and universities (CAS, Chinese Academy of Engineering, Shandong Academy of Sciences, Tsinghua University, and Beijing University) in over 60 projects at over 30 demonstration sites in Rizhao (Shandong Net, 2014). The centers emphasize participation of SMEs, which are supported by a provincial Technological Innovation Fund (Ibid).

In 2010, total investments into Rizhao High-Tech Industrial Park where these platforms operate reached two billion RMB (RMPG, 2011d). In the same year, activities in the park generated 142 patents and over one hundred kind of high-tech products (RMPG, 2011d). The platforms allegedly produced over 300 scientific and technological “achievements” (Shandong Net, 2014). Although this is self-reported data, this suggests that activities in these innovation platforms contribute to introduction of new technology in Rizhao.

Rizhao Municipal Government also uses public-private research partnerships to support the introduction of renewable energy in the industrial sector. Two large chemical industrial units, Jiahong Biotechnology and Jinhe Shenghua developed bio-waste to energy technologies in cooperation with Rizhao Environmental Protection Bureau (EPB). In the case of Jiahong, the company invited a consultant from the EPB, a previous professor from Rizhao Vocational and Technical College, to cooperate in the development of the enterprise’s environmental protection

20 _{The retrofits have taken the form heat metering devices, temperature control devices and heat exchange systems}

and improved insulation of windows, doors, facades and roofs (RMPG, 2011g; Shandong h 2014; RCC, 2014). In 2014, it was reported that a total residential area of 1.2 million m2 would be completed by the end of the year (coal consumption would decrease by 30’000 Tsc per year) (Shandong Xinhuanet, 2014).

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work. The project included joint research on technology to convert the waste product methane into electricity (Interview with policy advisor, Rizhao, 2013.03.13). There are further examples of public-private partnerships in development of solar power technology, such as the case of a local solar technology producer whose product development was supported by China National Lighting Research Institute (Interview with local company, Rizhao, 2013.05.21).

Research partnerships though bottom-up dynamics

Section 6.1.4 has already provided a discussion on the role of central government energy efficiency targets in promoting emission reduction practices in the industrial sector in Rizhao. This section discusses the strategies used by key energy consuming enterprises in reaching these targets. The focus on company strategy not only reveals that efforts differ depending on the characteristics of firms, but also that connections with other companies and academic institutes are forged in the search for new solutions. Four strategies used by ten of the key energy consuming firms are discussed below: technology transfer from foreign companies, private-academic partnerships, energy management through contracting, and internal research. These strategies are described below.

The largest energy consuming enterprise in the city is Rizhao Steel, a private company that has achieved considerable energy savings through a combination of technology transfers, private- academic partnerships, domestic contracting, and internal R&D. Rizhao Steel exceeded the energy saving targets of the 11th _{FYP and the 12}th _{FYP by introducing large-scale industrial}

recycling systems. Several environmental projects were realized by contracting domestic enterprises specialized in thermal energy and metallurgical engineering. One contract signed in 2007 led to the introduction of non-blast furnaces, and a wastewater and exhaust gas recovery system (BWK, 2014). The company invested over three billion RMB into the adoption of systems that generate power through exhaust gas recovery and heat transfer and storage capacity (Ibid). The factory’s iron waste recycling equipment was imported from France, and the technology to convert waste powder into cement was developed by Rizhao Steel in cooperation with China Steel Research Institute (Ibid). In 2011, Rizhao Steel claimed to reach a power production capacity of 3 Billion kWh, which allowed the firm to rely to 52% on its own electricity production, contributing annual savings of 370,000 Tsc (Rizhao Steel, 2011). In between 2011 and 2013, these measures allowed the factory to save around 465,000 Tsc (SETIC, 2014).

Huaneng Rizhao Coal Power Plant is an SOE producing most of Rizhao’s electricity. It is also the second largest energy consuming unit in Rizhao. Most of the energy savings in the power plant have been realized through purchase of foreign and domestic equipment. Two of the main boilers, installed in 2000, were imported from the German company Siemens while the installation was designed by the Spanish firm Foster Wheeler (BBK, 2014a). Two supercritical units were put into operation in 2008, both manufactured by Shanghai Electric (China Huaneng, 2010). The factory’s desulphurization equipment was imported from the infrastructure company Alstom (Zhang, 2012a). In 2011, 2012 and 2014 the plant upgraded its motor efficiency and its dust and noise control equipment (Zhang, 2012a; Zhai, 2014). The energy saving of the plant reached around 190,000 Tsc in 2010, and 465,000 Tsc between 2011 and 2013 (Zhang, 2012a; SEITC, 2014).

The third largest energy consuming unit in Rizhao is Shandong Binani Rongan Cement. The company was established in Rizhao in 2003, and is to 90% owned by the Indian conglomerate Binani Industries Ltd. and to 10% by Shandong Wingan Group. In 2008, a Sino-Indian research partnership between the company stakeholders increased production capacity of the factory and reduced energy use by 8 Kg coal/clinker. The collaboration project also led to introduction of a waste-to-heat cogeneration project that contributed a generation capacity of 12 MV, and research into the possibility of introducing bio-waste to energy systems in the factory (YJB, 2015; BBK, 2015). In 2013, it was reported that 120 million RMB was invested into the waste heat to power project, which at that point contributed to reduction of 75,000 tons of carbon

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dioxide emissions (HBGCH, 2013). In between 2011 and 2013, the factory’s energy saving reached around 22,000 Tsc (SETIC, 2014).

Shandong Yatai Senbo Pulp & Paper is a private company that is part of a large international umbrella organization, Asia Pacific Resources International (APRIL). APRIL’s branches operate according to environmental guidelines above those enforced in cities in China, due to the sustainability policy of the organization. In 2010, Shandong Yatai pulp factory in Rizhao adopted an advanced industrial recycling system that enabled it to quit coal and supply bio- waste based power to the grid. The recycling equipment was imported from leading European firms (AkzoNobel, Aquaflow, Purak and Finland Metal) that provided training in use and maintenance (APRIL ASIA, 2013). China United Cement Rizhao is a cement production firm, owned by the SOE China National Building Material Company Ltd. The SOE has a research department working with innovation related to energy saving technology, related to a nationwide strategy to eliminate inefficient cement kilns and introduce waste-to-power technology in all “dry” kilns (CNBM, 2014). The factory in Rizhao adopted a waste heat to power recycling system in 211 and saved over 20,000 Tsc between 2011 and 2013 (RMPG, 2011b; SETIC, 2014).

Rizhao Focal Electric is a company involved in coke manufacturing and electricity engineering. According to their company website, the firm engaged early in resource conservation, allegedly to choose a path of “scientific development” (Rizhao Focal Electric, 2008). The company cooperated with Shandong University in establishing an Engineering Technology Research Centre, self-proclaimed as the first private-academic collaboration focusing on coke and electricity engineering. The center has developed and improved production processes and technical equipment, trained staff, and produced six patented innovations (Ibid). In 2004, this led to introduction of a heat recovery coke oven that saves substantial amounts of energy (Qiang, 2011; Rizhao Focal Electric, 2008). In 2009, the company was titled a “Shandong Province Energy Saving Advanced Enterprise”, and in between 2011 and 2013 the company saved around 12,000 Tsc (SETIC, 2014).

Rizhao Port Group is an SOE formed out of Rizhao’s port authority. It provides services such as cargo loading, transportation and material processing. In 2006, the Port Group signed energy saving contracts with domestic ESCOs to improve energy management of operations. In 2011, Rizhao Port Group invested into equipment for improved efficiency of heat exchange and unloading, installation of wind turbines, photovoltaic (PV) cells and LED for lighting, electricity metering and GPS navigation for energy conservation in truck-based transport (GLINFO, 2012). In the same year, the investments contributed to a fall in energy consumption of 4% in spite of an increase of 11% in total cargo (GLINFO, 2012).

Rizhao Lingyunhai Sugar Group is a company involved primarily in food processing (sugar and soybeans), but also diverse activities such as e-commerce and hotel services. In 2013, the company was one of the enterprises that received Shandong Province’s energy saving awards, due to adoption of advanced industrial recycling equipment in its sugar processing (GLINFO, 2013). The industrial system involves steam recovery, heat exchange and water cooling, based on an investment of around 55 million RMB. These systems were adopted through domestic contracting (GLINFO, 2013). In between 2011 and 2013, the company realized energy savings of around 10,000 Tsc.

Rizhao Yingde Gases specializes in production of industrial gases. In 2014, Yingde signed a contract for introduction of energy management and energy auditing systems (Shandong Lvzhou, 2014). The company’s energy savings in between 2011 and 2013 reached 7,000 Tsc (SEITC, 2014). Shandong Wuzheng Group is a manufacturer of trucks and vehicles that has been active since 1962 and operated as a private firm since 2000. Since the 2000s, the company has focused increasingly on R&D and developed its innovative capacities (BBK, 2014b). The company was awarded Shandong’s energy saving awards in 2009, due to introduction of energy auditing systems, new energy technologies and water recycling systems (Nongjx, 2010). In between 2011 and 2013, the company saved almost 3,000 Tsc (SEITC, 2014).

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In the years between 2008 and 2013, the largest energy savings in Rizhao were reached by adopting waste heat recycling systems and waste material to power equipment. In 2013, twelve companies in Rizhao were recognized as Industrial Recycling Demonstration Enterprises, including several of the key energy consuming enterprises, such as the steel factory and the power plant (REITC, 2014). Although many companies adopted industrial recycling systems, the firms used different strategies to reach energy saving targets. Three companies imported equipment, two companies formed research partnerships with the academic sector to develop new technological solutions, three relied on internal R&D to develop energy saving applications, and four enterprises signed cooperation contracts with domestic ESCOs that helped identify energy saving solutions. Table 15 gives an overview of energy saving strategies adopted by these firms.

Table 15: Technology development and adoption of key energy using enterprises in Rizhao

Name Activity Energy saving strategy Tech. development/ adoption

Rizhao Focal Electric Coke Heat recovery cogeneration coke oven Private-academic _Partnership

Rizhao Steel

Steel Waste heat to power generation

Improved heat transfer, recovery & storage capacity

Private-academic Partnership Domestic contracting

Technology transfer Huaneng Rizhao Coal

Power Plant Energy

High efficiency, supercritical boilers

Shut down inefficient boilers Technology transfer

Yatai Senbo Paper/Pulp Waste-to-energy system Technology transfer

Shandong Binani

Rongan Cement Cement

Waste-to-heat co-power generation (Research into bio-waste power generation)

Private-foreign Partnership / Internal R&D

China United Cement Cement Waste heat to co-power generation Internal R&D

Shandong Wuzheng Auto Energy optimization Internal R&D

Rizhao Lingyunhai

Sugar Sugar

Steam recovery

Heat exchange and water cooling systems Domestic contracting

Rizhao Yingde Gases Gases Energy optimization Domestic contracting

Rizhao Port Group Shipping

Reduction of idle time of conveyor belts, electricity metering, efficiency of heat exchange and

unloading, wind turbines, PV, LED, GPS navigation Domestic contracting