[Review] Scottish Connections at Shanghai Jiao Tong University

Published on 2019-07-09

Understanding the Energy Transition and Doing Business in a Decarbonised China

The Chamber's Scottish Focus Group (SFG) held its third Scottish Connections business network event this year on Monday 17 June. The Advanced Engineering & Manufacturing Focus Group also supported this event. Over 30 members attended representing virtually all business sectors.

The following is a summary of the event and importantly this also contains links to the presentations made which both attendees and those that could not attend have requested.  These are well worth a read to get a good idea as to what was covered.

The event was hosted at The China–UK Low Carbon College (LCC), established through the joint efforts of Shanghai Jiao Tong University, the University of Edinburgh and other UK universities, as well as Shanghai and Lingang governments.  

As well as a great networking opportunity in a great location, the event allowed members to hear from a cadre of world-renowned academic professors on one of the most pressing issues the world is facing – The Energy Transition. The event also allowed members to consider the business opportunities and challenges as China transitions to a decarbonised energy system.

The academic core of the event, held in classroom, was a sampler series of four “mini lectures” designed to highlight some key points, provoke thoughts and to act as a prelude to a more in depth course for businesses which, subject to demand, could be held at the Lingang campus later this year.

The four mini lectures were delivered by:

  • Ed Craig, Dean for Edinburgh Affairs at China-UK Low Carbon College (LCC)
  • Professor Simon Kelley, Head of School of GeoSciences, and Chair in Isotope Geochemistry at the University of Edinburgh
  • Professor Conchur O Bradaigh, Head of School of Engineering and Chair of Materials Engineering at the University of Edinburgh
  • Professor Jia Li,  at the China-UK Low Carbon College, Shanghai Jiao Tong University

Ed Craig started by setting the context for Scotland’s role in the Energy Transition. He highlighted the transformation that was occurring in Scotland – having been the “Father of the Industrial Revolution” in the 19th century and having a reputation as the “Dirty Man of Europe” Scotland was now at the forefront of the reduction in CO2 emissions and the hope was that it can be a role model for how small countries/ city states can innovate and develop sustainable solutions for energy production and consumption. He highlighted the role of the LCC in helping this knowledge transfer.

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A copy of Ed’s slides used in his lecture can be found here.

Simon Kelley then presented a fascinating (and sometimes frightening) story of how the Earth’s system works, particularly with regard to carbon, what the data tells us and what the near future holds for us. He outlined the definition of the Anthropocene –the “new” geological epoch we are considered to be in - dating from the commencement of significant human impact on Earth's geology and ecosystems. Simon highlighted examples of the real impact of climate change and increase in temperature that are already evident and the difference the increase in temperature will make – hence the compelling case for reducing CO2 emissions.

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A copy of Simon’s slides used in his lecture can be found here.

Next was Conchur O Bradaigh who presented on a range of Engineering Solutions for Decarbonising Energy. Conchur started by outlining the capability of the School of Engineering at Edinburgh particularly with regard to research on the Energy Transition. He also highlighted the necessity of the integration of efforts and solutions through “Energy @Ed” which bridges across the various schools and disciplines.  Conchur then went on to pick out three example areas where research was active at Edinburgh with the results potentially having high impact on CO2 reduction and of relevance to China. The first was Ocean Energy Systems, harnessing energy from seawater through Tidal, Currents, Waves, Thermal and Salinity. The second was the research on Electrical Power Conversion and the third was the development of lightweight composite materials eg. for tidal turbine blades. 

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A copy of Conchur’s slides used in his lecture can be found here.

Jia Li delivered the final mini lecture focusing on the Energy Transition in China and highlighted some of the current trends. The core thought provoking content of her lecture was the close relationship between Energy and Water. Water and Energy flows are deeply connected: all forms of energy production require some input of water, while the entire water cycle (extraction, distribution, treatment and disposal) consumes energy.

Global estimates: 
8% of total energy consumption is water-related.
 15% of total water withdrawals are energy-related.
 The use of water in the production of energy in China is increasing, eg. water requirements for shale gas development and there is an uneven distribution of water resources between the South (too much) and the North (too little). The increased demand is in the North. This may become a limiting factor in the Energy transition. Jia Li also highlighted that coal still accounts for 69% of total energy production in China and not all coal fired power plants could convert. 

Jia.jpg

A copy of Jia Li’s slides used in his lecture can be found here.

There then followed a very active Q and A session and business forum with a wide range of topics covered. Some of the observations coming out of that discussion included:

  • This will not be a smooth transition; there will be many bumps along the way.
  • There are some high risks, not least due to the potential of policy changes and shifts.
  • The game changer of carbon pricing/ carbon tax remains illusive.
  • Climate change competes with other politically pressing issues, sometimes more immediately apparent, such as urban pollution, plastic, poverty and economic growth. 
  • Opportunities for investment in the energy transition are there, but not neatly packaged and often carrying an unacceptable risk.
  • The level of expenditure required to achieve the Energy Transition in China is huge, including meeting increased demand for energy and other hydrocarbon usages such as petrochemicals.
  • The SOEs and other Big Oil/ Extraction companies are best placed to carry this investment with robust balance sheets. The paradox is that is likely that it is only “old oil” that can fund the transition. 
  • Hydrogen will be part of the mix – but beware the dependency on water.
  • Limitations on battery technology and dependencies on material extraction such as lithium have not been fully thought through. As EVs increase this will cause issues, including supply chain shocks and potential consumer backlash when the environmental impact of the material extraction is fully understood.
  • Members from all business sectors will be impacted by the Energy Transition in China. Not just the traditional/ obvious ones. For example sectors such as hotels will be impacted both on a micro level (building design, energy efficiency, resilience to extreme weather events) and on a macro level (as sea levels rise, what resorts will “disappear”, population shifts etc).
  • Scotland, Scottish business and other Scottish institutions are well placed to meet the demands of this Energy Transition at various levels. However it will require close collaboration and integrated CRM to really take advantage. At the moment the approach while good (like the LCC) is still piecemeal.