Applied Energy 76 (2003) 89100 www.elsevier.

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Environmental benets of implementing alternative energy technologies in developing countries

B. Buran, L. Butler, A. Currano, E. Smith, W. Tung, K. Cleveland, C. Buxton, D. Lam, T. Obler, S. Rais-Bahrami, M. Stryker, K. Herold*
Students Using Renewable Energy (S.U.R.E.), Department of Mechanical Engineering, Gemstone Program, University of Maryland, College Park, MD 20742, USA Accepted 11 January 2003

Abstract During the early stages of industrialization, developed nations such as the United States did not foresee the extensive damage that would be done to the global environment by continued reliance on fossil fuels. As environmentally-friendly technologies become more feasible, eorts are being made to nd ways to replace fossil fuels with more environmentally-friendly alternatives. However, industrialized countries have faced diculties in converting their already-established infrastructures due to the time, eort, and cost involved. Implementing renewable-energy technologies in developing countries in the early stages of industrialization will avoid these obstacles. China and India are among the most populous and rapidly-developing countries. Therefore, employing renewable energy resources in these regions will have signicant environmental and economic benets and provide a model for other countries to follow. # 2003 Elsevier Ltd. All rights reserved.
Keywords: Pollution; Developing countries; Alternative energy

1. Introduction Consistent with their roles as the worlds second and third leading coal-producing countries, China and India rank second and fth in greenhouse-gas emissions, respectively. Due to rapid growth in both countries, per annum carbon emissions are
* Corresponding author. Tel.: +1-301-405-5268; fax: +1-301-314-9477. E-mail address: herold@eng.umd.edu (K. Herold). 0306-2619/03/$ - see front matter # 2003 Elsevier Ltd. All rights reserved. doi:10.1016/S0306-2619(03)00050-3

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Nomenclature DESA GEF GW mtce NCPIL NHPC PV tce UN UNDP UNEP UN Department of Economic & Social Aairs Global Environmental Facility gigawatt metric tons of carbon equivalent The Nuclear Power Corporation of India Limited National Hydroelectric Power Corporation Photovoltaic tons of carbon equivalent United Nations United Nations Development Program United Nations Environmental Program

expected to grow far more rapidly than the global average over the next 20 years. In these countries, combustion of fossil fuels, particularly coal, is both the primary source of energy and the major cause of environmental pollution. While coal has been a major driving force behind economic development in both countries, increasing levels of pollutants released by the combustion of coal has caused an increase in public health risks and environmental decay. Alternative energy sources have a future in developing countries. Adopting advanced technology, improving energy eciency, and reducing air pollution and greenhouse gas emissions are in the best interest of developing nations. While these goals are already national policy in both China and India, inadequate nancial resources remain a major impediment. Increased nancial assistance from international organizations such as the United Nations (UN) and the World Bank would provide an incentive and needed nancial aid to these countries to develop environmentally-friendly energy infrastructures. This would ultimately benet not only those industrializing regions, but also the global environment.

2. International energy-situation While oil, natural gas, and hydroelectric power all contribute to the overall energy supply in China and India, the primary energy source is coal, contributing roughly 75% of supply in both countries. Consumption of cleaner fuels has increased slightly over the past few decades, but a lack of supply and inecient utilization are two key areas of concern. Currently, hydroelectric power is the only form of renewable energy in either country that contributes a signicant share of energy to the overall supply. Other alternative sources, such as wind power, nuclear, and solar energy, have potential, but due in part to a lack of nancial resources [1], they currently

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account for only a small portion of total energy supply. As large countries like China and India continue to industrialize, their use of fossil fuels will place an increasing burden on the global environment. Providing outside funding and assistance to these countries would benet the environment by facilitating the development of infrastructures based on environmentally-benign energy sources.

3. Overview of energy-related pollution in China 3.1. Energy-use statistics Rapid economic growth in China over the past two decades has fueled an increase in energy demand. While energy use doubled between 1980 and 1999, the internal supply has been adequate to meet the demand for energy. Current projections show that energy demand is expected to increase 4.7% annually between 1990 and 2020 [2], much faster than forecasts for any other country. By 2020, energy demand in China is expected to exceed the total demand of all of Western Europe [2]. Electric generation capacity in China was 215 GW in 1995. It is planned to be 300 GW by 2010 and 553 GW by 2020. At least 17 GW of new capacity must be added each year to meet these goals [3]. Fig. 1 shows a breakdown of the contributions of four energy sources to total energy demand. Domestic coal is the primary source of energy in China, accounting for more than 75% of total consumption [4]. As the economy expands, energy production must increase signicantly to meet the rising demands of large-scale industry. Because coal is Chinas primary natural resource, there are strong economic incentives to use coal to fuel the economic expansion. Natural gas consumption in China remains low, contributing only 3% of total energy consumption [5]. Potential investors have expressed concerns about the commercial viability of projects to develop a pipeline connecting western China, where the bulk of natural gas reservoirs are located, with population centers in the east [5]. Even with increased coal output, China became a net importer of both oil and coal in 1993. While China is the sixth largest producer of oil, accounting for 5% of worldwide oil supply, projected demand exceeds reserves [2]. In recent years, oil consumption has surged, surpassing domestic production. Increasing energy demand in China means that unless China invests more in alternative energy development, it must either continue to increase coal production or increase energy imports. 3.2. Pollution statistics If coal utilization continues to increase in China, there will be a concurrent rise in greenhouse gas emissions. Coal historically has been the largest contributor to pollution in China. Several pollutants are emitted during coal burning, including carbon dioxide, nitrogen oxides, and sulfur oxides. Chinas coal-burning has made it

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Fig. 1. Total primary-energy consumption in China, by energy source. Source: Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory [23].

the worlds leading emitter of sulfur oxides, which have been dispersed so widely that complaints of acid rain from Chinese sulfur emissions have arisen in Indochina, Japan, and Korea [6]. This level of pollutant emission can be attributed not only to Chinas need for energy, but also to poor power-generation eciency [7]. Because Chinas plants are built to meet localized power needs, they are often run at less than full capacity or cycled on and o, thereby reducing eciency. Further, much of the equipment is outdated and inecient. In addition, Chinas soft coal is more polluting and has a lower heating value compared to most fuels, including other types of coal. Many of these pollutants contribute to smog, which aects the breathable air in the cities and inhibits crop growth in rural areas. A recent study shows that if China could clean up its smog, the agricultural sector could increase production by up to 30%, so eliminating the countrys need to import food products [8]. Nitrogen oxides also contribute to acid deposition. In 1998, The World Health Organization ranked seven Chinese cities among the ten most polluted cities in the world [20]. Fig. 2 shows that CO2 emissions in China have increased drastically since 1950. The US Energy Information Administration has projected that CO2 emissions in China will reach 1.6831012 metric tons of carbon by the year 2020, based on an average annual percent increase of about 4.5% in CO2 emissions between 1990 and

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Fig. 2. Chinese carbon dioxide emissions by source (from Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory [23]).

2020 [9]. This is double the estimated increase in global emissions. Thus, by 2020, China is expected to account for 36% of the CO2 emissions from developing countries, and 17% of emissions worldwide [9]. 3.3. Economic aspects of pollution in China Environmental pollution and greenhouse gas emissions have a major economic impact in China. World Bank projections [10] indicate that climate change could cost the Chinese economy of the order of 109 US dollars per year. Studies suggest that air and water pollution are already costing China increasingly high percentages of its gross domestic product. A World Bank study estimated that health costs due to pollution in China would rise from US $32109 in 1995 to almost $98109 in 2000 [10]. Costs of fossil fuel usage in China are complex to calculate. It is estimated that 178,000 Chinese people in the major cities suer early deaths annually as a result of excessive atmospheric pollution. The World Bank estimates that China spends at least $5.41010 annually towards repairing air and water pollution damage [11]. The World Bank has also estimated Chinas spending towards air and water emissions abatement. However, the cost of emissions reductions varies depending on plant size and the desired rate of reduction. For industrial particulate emissions, the amount

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can vary from $10/ton to as much as $1400/ton. Similarly, SO2 emissions abatement varies from $50/ton to $5500/ton [11]. 3.4. Alternative-energy projections Adopting advanced technologies, improving energy eciency, and reducing local air pollution and greenhouse gas emissions are in Chinas national interest and are already part of national policy. China is currently pursuing its tenth Five-Year Plan (20012005), one of a set of plans that sets policies and visions for improving the countrys economic structure. A key focus of the current Five-Year Plan is research and development of renewable energy systems [12]. 3.4.1. Solar energy Due to the high cost of manufacturing photovoltaic (PV) cells, solar power is not yet economically feasible on a large scale. However, there is some potential for small-scale implementation of PV technology for o-grid applications in China. Rather than attempting to connect the most remote rural areas to the grid, the electricity needs in such regions could be met by stand-alone PV systems. To this end, one leader in the PV power industry is committed to providing 78,000 Chinese homes with solar power systems by the year 2006 [13]. 3.4.2. Wind energy Wind energy is a strong prospect for China. Along the countrys southeast coast, limited coal resources cannot meet the regions electricity demand. The high wind density in this region could be exploited, making the region less reliant on other regions for energy. Cost analysis in Industrial-Scale Wind Power In China even predicts that wind energy collected in low population-density regions could provide base-load electricity to energy demand centers at the same lifecycle cost as coal-based electricity [14]. Under the current Five-Year Plan, China plans to develop a system for the design and manufacture of 500 kW commercial wind power plants. Research will also be done to develop wind turbines on the scale of megawatts. 3.4.3. Hydroelectric power According to the government, installed hydroelectric capacity is expected to reach 125,000 MW by the year 2010, providing for more than 40% of Chinas electricity demand. Despite concern over the impacts of large-scale dams on people and the environment, China is continuing with the immense Three Gorges Dam project. This 18,200 MW plant is the largest hydroelectric project in the world. Plans have also been made for other smaller hydroelectric projects, such as a prospective 5400 MW plant in the Guangxi Province [13]. However, a lack of sucient funding has made it dicult for China to actualize all of these projects [15]. The Three Gorges Project consumes the majority of central government allocated funds, and the government prefers to direct international funding to international projects. Because roughly 70% of hydroelectric projects are considered domestic, the government is

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hesitant to invest international funding into these projects; as a result, they are stalled by lack of support. 3.4.4. Nuclear energy Nuclear energy currently accounts for 1.3% of the total Chinese annual energy output. This amount is expected to rise to 3.6% by 2010 [3]. According to the US Energy Information Administrations International Energy Outlook 2002, Chinas yearly nuclear capacity was 2.2 GW in the year 2000 and is projected to rise to 16.6 GW per year by 2020 [13]. Currently, there are three nuclear plants operating in China, with eight more under construction. 3.5. Energy investment in China While it appears that both China and India would welcome the opportunity to implement alternative energy technologies to support their rapid industrial growth, several factors aect their ability to utilize cleaner energy sources. Some energy technologies are not implemented because they are not yet widely available or are not economically feasible. One of the largest operating costs for any industrial establishment is energy. Rapidly industrializing countries are experiencing a surge in energy demand. If these countries plan to continue to industrialize at their current rates, increased energy investment is inevitable. Energy investment has yielded signicant increases in energy production capacity to meet increased energy demands in recent years. However, the rise in renewable energy production has not matched that of thermal generating capacity from fossil fuel use. If China were to concentrate its nancial resources on alternatives to fossil fuels, they could decrease harmful emissions. With energy demand rising constantly, China has also invested in energy conservation. Throughout the 1990s, the government consistently subsidized between US $1,087,297,9441,208,108,826 annually for construction of energyecient industrial systems and $604,000,000725,000,000 annually for updating of industrial equipment [16]. Cogeneration (the simultaneous production of heat and electricity) was the most protable energy conservation technique, saving the country about 2.0108 kJ/year. Other conservation techniques include recovery of waste gases, replacement of smaller and older equipment with new, large-scale production equipment, plant renovation, and coal washing. By 1995, China boasted an energy savings of 2.7035108 kJ/year at an estimated cost of $9.45 per GJ/year [16].

4. Overview of energy-related pollution in India 4.1. Energy-use statistics Currently, India is the sixth largest energy consumer in the world, and the countrys energy consumption is expected to increase over the next 20 years [9].

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In the past, India has derived most of its energy from coal, but recently the country has been making eorts to utilize other resources. However, fossil fuels still remain the largest energy source. About 76% of Indias electricity is produced in power plants using coal or petroleum products. Of the remainder, 22% is hydroelectric and 2% is nuclear. According to data from Indias Ministry of Statistics and Programme Implementation, the nations total energy consumption has increased approximately fourfold over the last three decades. In 1999, India had an electricity consumption total of approximately 4.241011 kWh [17]. India is the worlds third largest coal producer, ranking behind only the United States and China. Current domestic production of coal meets approximately 95% of domestic demand. Coal consumption is expected to increase by 28% by 2010, and is expected to remain the primary source of fuel despite increased reliance on natural gas [18]. Oil provides roughly 30% of Indias energy, but domestic production of oil provides for only a third of Indias oil demand. By 2010 roughly 75% of Indias oil and gas needs will be met by imports [18]. The government predicts that, with present consumption and production trends, India will deplete its oil reserves by 2012. The Indian government is now encouraging exploration for oil to reduce its dependence on imports. However, many researchers believe that Indias easy-access reserves have already been tapped [18]. There are numerous projections for Indias energy consumption in the coming years, and all agree that the increase will not simply be linear. One estimate projects an 810% annual increase in energy demand over the next 15 years if the economy continues to grow at the expected rate of 78% per year [18]. 4.2. Pollution statistics India emits the fth most carbon of any country in the world: at 253 million metric tons, only the United States, China, Russia, and Japan surpassed its 1998 level of carbon emissions. Fig. 3 shows that carbon emissions have grown nine-fold over the past 40 years and are forecast to grow 3.2% per year until 2020faster than both China and the United States. The Indian government estimates the cost of environmental degradation in recent years to be 4.5% of GDP [18]. Low energy-eciency of coal-burning power plants is a contributing factor. Indias coal plants are old and are not equipped with the most modern pollution controls. Given the shortage of generating capacity and scarcity of public funds, old coal-red plants will likely remain in operation for some time. Power plant modernization, improvements in transmission to cut distribution losses, and legislation to encourage enduser energy conservation are all part of the governments current energy eciency eorts. Emerging industrial centers and the lack of pollution-control mechanisms have resulted in a severe drop in air quality in India. Of the 3 million premature deaths in the world that occur annually due to air pollution, more than 500,000 occur in India [19]. According to the World Health Organization, the city of New Delhi is one of the ten most polluted cities in the world [20].

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Fig. 3. Indian carbon dioxide emissions, by source (from Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory [23]).

4.3. Alternative energy projections By 2012, India wants 10% of all additional electric capacity to come from renewable energy sources. The Indian Renewable Energy Development Agency, which is a part of the Ministry of Non-Conventional Energy Sources, oversees the development of these energy sources. 4.3.1. Nuclear energy India has 14 nuclear reactors operating with 2720 MWe combined generating capacity. Four 220-MWe reactors were commissioned between late 1999 and December 2000. The Nuclear Power Corporation of India Limited (NPCIL) wants to boost capacity to 20,000 MWe by 2020 (710% of total electricity generating capacity). The outlook is improving for Indias nuclear-power industry, as plants have been running at an average capacity factor of 80%, and reactor outages have shortened. Quality of fuel supplies has risen and delivery times have improved. In 1999, NPCIL declared its rst dividend, but the nuclear industry is still heavily reliant on government funding. Government spending for research and development for the current ve-year plan is $193.5 millionve times the previous level. By

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mid-2001, two more reactors were scheduled to enter critical development stages. Construction is progressing on two 500-MWe units: the rst uses Indian-developed design and technology [18]. Construction is also scheduled for six additional reactors. 4.3.2. Hydroelectric energy India has vast hydroelectric potential. Estimates place hydroelectric potential at 86,000 MWe, only about one-quarter of which has been utilized. About one-fth of Indias total electricity generation comes from hydroelectric plants. The Ministry of Power announced plans in early 2000 to build the worlds largest hydroelectric plant. The plant will have a capacity of 21,000 MWe and cost $23109. Due to start operation in 2012, the rst of six phases will open in 2008 with 600 MWe of generating capacity. 4.3.3. Solar power Most of India gets over 300 days of sunshine annually. There is a large market for PV technology and progress has been made in the deployment of small, stand-alone PV systems. Thus far, 58 MWe in capacity has been installed through 750,000 systems, including solar lanterns, home and street lighting systems, water pumping systems, and 1.1 MWe in stand-alone power plants.

5. Current UN nancial assistance The UN is currently making eorts to address the worlds energy concerns. Together with the World Bank, the UN is taking the initial steps to nance energy projects to pave the way for a renewable energy future. Divisions of the UN, such as the United Nations Development Program (UNDP) and United Nations Environment Program (UNEP), play an important role in instigating funding and policies for renewable-energy programs in various countries. Currently the United Nations has many agencies involved in the eld of energy. These agencies have limited budgets and thus receive additional support and nancing from organizations such as the United Nations Foundation (UNF) and the Global Environment Facility in addition to the funds, which they have set aside for alternative-energy projects. The UNF supports the eorts of the UN by providing grants to various projects. Since 1998, the UNF has used only 10% of its environmental funding for renewable-energy initiatives. That 10% amounts to only $8.9 million (1.9%) out of the total UNF funding of $451 million and is hardly enough to support renewable energy projects around the world, but it is a start. For China and India, the funding specically includes $1million to the UN Department of Economic and Social Aairs (DESA) to aid the commercialization of renewable-energy development in India, and $100,000 over eight months to the UN Environment Program (UNEP) to design a solar credit facility in Southern India. Another $1.8 million has been designated to

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the DESA to expand the use of solar energy for water heating in China. Several smaller projects also exist in China [21]. The UNF is providing initial capital to initiate particular energy projects, but additional outside nancing will be necessary to continue to expand the renewable energy systems. Other organizations, such as the Global Environment Facility (GEF), are making similar eorts. Because China is responsible for 10% of global greenhouse gases and 40% of developing country greenhouse gases, approximately 10% ($8.3 million) of the total GEF energy funding has been dedicated to China [22]. This funding is being used to develop the capacity to commercialize renewable energies and to remove barriers that hinder the dissemination of alternative-energy technologies. The GEF funding is hoped to increase demand for renewable energy technologies, leading to increased supply and reduced production costs, which will heighten future demand for renewable energy technologies.

6. Conclusion Growing reliance on fossil fuels for energy in China and India has contributed to environmental degradation. If energy consumption in these nations increases as forecast, and fossil fuels are still implemented, these eects will be exacerbated even further. In order to help alleviate the pollution problems associated with industrial development, developing countries should use cleaner fuels. Alternative energy resources are available to these countries; however, renewable energy technologies tend to be more expensive to implement than conventional fossil fuels. While China and India have expressed the intent to utilize more environmentally-benign energy technologies, they have not yet begun to implement them on a large scale. The United Nations and World Bank are providing some nancial support, but increased nances are necessary for these countries to more aggressively pursue the utilization of alternative energy technologies.

Acknowledgements This research was sponsored primarily by the Gemstone Program at the University of Maryland, College Park (UMCP). Additional funding was provided by other UMCP sources, including the A. James Clark School of Engineering, the Mechanical Engineering Department, and Dr. Bongtae Han, Mechanical Engineering Professor.

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