Advanced International Studies Unit, Battelle Memorial Institute
Combined Heat and Power Systems in China
In China, tens of millions of people are not connected to the
electricity grid, and transmission systems are notoriously unreliable.
If cogeneration were used to its maximum potential in China,
local pollution and greenhouse gas emissions could be cut by
50% at the present time, and greatly reduced in the future.
China’s natural gas resources are abundant, and the sector
is being developed with the strong support of China’s
However, barriers to cogeneration are also abundant. Utilities
are reluctant to make the electricity grid available to small,
untested “competitors.” Banks are reluctant to make
loans for cogeneration projects because they are not fully understood.
The Chinese energy market is structured such that there are
few incentives for developers to take on cogeneration projects.
This is where Battelle’s Advanced International Studies
Unit (AISU) comes in. Using a combination of market surveys,
business plans and demonstration projects, AISU hopes to jump-start
the use of cogeneration power systems in China. Initially, the
focus will be on well-known technology such as gas turbines
and internal combustion generators. Over time, more sophisticated
technologies, such as micro-turbines and fuel cells, could be
put to use. AISU will help its Chinese counterparts identify
the most promising market sectors for this technology, develop
sound financial and business plans, identify financing, and
launch demonstrations of the technology. The project will work
in close collaboration with China’s National Development
and Reform Commission, which is working to remove policy barriers
to cogeneration with the support of the Energy Foundation.