11
The Dalian Experience

PHYSICAL, ECONOMIC, AND SOCIETAL SETTING

Dalian, an important seaport, industrial, trade, and tourism center, is located in the southernmost part of the Liaodong Peninsula in Liaoning Province, northeast China (Figure 11-1). It borders the Yellow Sea to the east (300 km from the Korean peninsula), the Bohai Sea and Tianjin (a port city that provides access to Beijing) to the west, and the Shandong Peninsula to the south. Land area in Dalian totals 12,574 km2, including 1,906 km of coastline. Dalian also has access to the river networks including the Biliu River, which is the urban district’s primary water source.

Due to its location in the Northeast Asian economic zone, Dalian is an open, active, and rapidly developing city. It provides a link among the neighboring countries of North Korea, South Korea, Japan, and eastern Russia, and goods are transported from Dalian to Asia and Europe.

The terrain is high and wide to the north, and low and narrow to the south. The surface relief inclines from the central axis of the peninsula towards the Yellow and Bohai Seas, with a long and slow slope along the Yellow Sea. Changbai Mountain (1,132 m), an extension of the Qian Mountain Range, is the highest point in the region. Karst and coastal erosion landforms mark the lower terrain. The urban district extends along the valley area and is slowly expanding into the surrounding hillsides.

Atmospheric circulation in the city is dominated by westerly winds and subtropical systems. Dalian has a maritime climate with northerly and southerly monsoons dominant in winter and in summer, respectively. Northerly and southerly winds dominate in autumn and spring, respectively.



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11 The Dalian Experience PHYSICAL, ECONOMIC, AND SOCIETAL SETTING Dalian, an important seaport, industrial, trade, and tourism center, is located in the southernmost part of the Liaodong Peninsula in Liaoning Province, north- east China (Figure 11-1). It borders the Yellow Sea to the east (300 km from the Korean peninsula), the Bohai Sea and Tianjin (a port city that provides access to Beijing) to the west, and the Shandong Peninsula to the south. Land area in Dalian totals 12,574 km2, including 1,906 km of coastline. Dalian also has access to the river networks including the Biliu River, which is the urban district’s primary water source. Due to its location in the Northeast Asian economic zone, Dalian is an open, active, and rapidly developing city. It provides a link among the neighboring countries of North Korea, South Korea, Japan, and eastern Russia, and goods are transported from Dalian to Asia and Europe. The terrain is high and wide to the north, and low and narrow to the south. The surface relief inclines from the central axis of the peninsula towards the Yellow and Bohai Seas, with a long and slow slope along the Yellow Sea. Changbai Mountain (1,132 m), an extension of the Qian Mountain Range, is the highest point in the region. Karst and coastal erosion landforms mark the lower terrain. The urban district extends along the valley area and is slowly expanding into the surrounding hillsides. Atmospheric circulation in the city is dominated by westerly winds and subtropical systems. Dalian has a maritime climate with northerly and southerly monsoons dominant in winter and in summer, respectively. Northerly and south- erly winds dominate in autumn and spring, respectively. 0

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0 ENERGY FUTURES AND URBAN AIR POLLUTION FIGURE 11-1 Dalian’s location within China. The Dalian administration governs six districts, three county-level cities, and one county (Figure 11-2). Since 1980, Dalian has administered four national-level open zones: a development zone, a high-tech park, a free trade zone, and a resort area. Such areas encourage foreign investment and provide opportunities to adopt innovative practices. The Dalian Environmental Protection Bureau, established in 1985, divides Dalian into three divisions for the purpose of environmental man- agement: the city center (123 km2), the urban district (2,414 km2), and the new urban district (2,292 km2) (DEPB, 2007). The city center includes four of Dalian’s six districts—Zhongshan, Shahekou, Xigang, and Ganjingzi. The urban district contains six subsections, including the development zone and the high-tech park. Between the urban district and the city center is the new urban district. With a population of ~6 million, Dalian’s GDP was 229 billion RMB ($28.6 billion) in 2005 (DFTECB, 2007). Secondary and tertiary industries1 contribute 45 and 46 percent, respectively, to total GDP. In 1984, the State Council autho- 1Primary industry refers to production of raw materials, such as agriculture or mineral extraction. Secondary industry involves processing raw materials, alternately referred to as manufacturing. Tertiary industry is also commonly referred to as the service industry and includes such industries as finance, tourism, and food service.

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0 THE DALIAN ExPERIENCE FIGURE 11-2 Dalian municipality. rized Dalian to be among 14 “open coastal cities” (including Shanghai, Tianjin, and Guangzhou), effectively opening it up to outside investment, and in 1994 the State Council elevated it to a vice-provincial (or prefecture-level) city, granting local leaders more authority in economic decision making. In 1998, Dalian was designated as a National Model City for environmental protection and was also named China’s Top Tourism City. In 1999, the United Nations (UN) confirmed Dalian as the Asia-Pacific Region’s Leading Urban Governance Model City. In 2001, Dalian received the UN Environment Program’s “Global 500 Award” and the UN’s Human Habitat Award. In 2003, it won the China Habitat Environment Prize and the mayor at the time, Bo Xilai, was awarded the China Environment Prize. Since 2002, Dalian has become a base for petrochemical production, elec- tronics, informatics and computer software development, advanced machinery manufacturing, shipmaking, and international shipping. The Dalian port currently trades with over 300 ports in 160 regions and countries, accounting for 70 per- cent of cargo and 90 percent of containers in northeastern China. It is the largest petroleum and chemical port in China, and handles the most grain (mostly exports) in all of Asia. A planned railway in northeast China (the “Golden Passage”) will

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0 ENERGY FUTURES AND URBAN AIR POLLUTION connect to more than 10 ports in Russia and North Korea. A major international shipping center is expected to be completed by 2020. Dalian is home to over 200 scientific research institutions, 22 universities, 250,000 scientific/technical personnel, and more than 200,000 students. In 2002, The Chinese Academy of Sciences’ Institute of Chemical Physics and British Petroleum established a joint research center. Research areas include new methods for hydrogen storage, conversion of methane to hydrogen and aromatics, and fuel cell/hydrogen technology. It has developed fuel cell engines for minibuses and personal vehicles (DICP, 2006). In 2002, 50 kW fuel-cell bus engines were introduced with the goal of having these buses running in Beijing and other cities by 2008. It obtained a U.S. patent for a catalyst that could boost the yield of ultra- clean diesel from syngas. SOURCES AND LEVELS OF AIR POLLUTION Currently, the Dalian air quality monitoring network includes 10 stations that monitor inhalable particulate matter (PM10), sulfur dioxide (SO2), nitrogen dioxide (NO2), and carbon monoxide (CO). Dalian’s air quality ranked 16th nationally in 2005, based on the annual Air Pollution Index (API) rating. Major emissions sources are: • Coal burning—a primary energy source in northern China. • Industrial processes—primarily from steel plants, chemical manufactur- ers, and cement plants. • Motor vehicle exhaust—as of 2005, Dalian’s vehicle fleet (public and private) included 240,000 light-duty gasoline vehicles, 135,000 light- and heavy- duty diesel vehicles, 158,000 motorcycles, and 6,000 non-road vehicles. • Resuspended dust—the 17 days with recorded API reaching 500 between 2001 and 2005 resulted from invasive dust storms. Local dust is estimated at 110,000 tons in 2005, ~25 percent of which originated from the city center. • Transport of pollutants—from other parts of China and neighboring countries. In 2005, there were 347 Class II days in Dalian, including 61 Class I (Excellent) days. Five dust storms (123 hours) were recorded in 2005. Annual dustfall in downtown Dalian averaged 15.7T/ km2*M, which is double Liaoning Province’s standard2 (DEPB, 2005). Annual average concentrations are 85 µg/m3 for PM10, 44 µg/m3 for SO2, 32 µg/m3 for NO2, and 480 µg/m3 for CO, in compli- ance with Class II standards. The pH value of the urban districts’ rainfall ranged from 3.6 to 7.9 with ~25 percent of acid precipitation in the southern part of the 2Liaoning Province sets its own criterion for dustfall, though the province does not set standards for other air pollutants.

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0 THE DALIAN ExPERIENCE city. Acid rain was observed in the city for the first time in 2004, and it occurred frequently in 2005. Daily air quality reports (see Table 11-1) and an annual environmental qual- ity report are available from the Dalian Daily, from the Dalian EPB website (http://www.dlepb.gov.cn/), and from the State Environmental Protection Agency (http://www.sepa.gov.cn). Table 11-2 shows that daily exceedances were highest for PM10 (7.2 per- cent), followed by SO2 (2 percent), indicative of impacts from coal combustion. Although primary energy consumption from coal was reduced from 69 percent to 60 percent during 2001-2005, exceedance of SO2 increased by ~4 percent. The highest levels occur in winter due to increased heating (November to March) coupled with a shallow surface layer. Table 11-3 (next page) shows that the major pollutant is PM10 in all seasons, with elevated SO2 and CO concentrations during winter. TABLE 11-1 Sample Daily Air Quality Report from Dalian Environmental Protection Bureau Date: 06-30-2006 District API Main Pollutant Air Quality Xinghaisanzhan 60~70 PM10 Very Good Ganjingzi 70~80 PM10 Very Good QingniwaBridge 60~70 PM10 Very Good Fujiazhuang 40~50 None Excellent Qixianning 50~60 PM10 Very Good Lushun 50~60 PM10 Very Good Jinzhou 50~60 PM10 Very Good Development zone 60~70 PM10 Very Good Zhoushuizi 60~70 PM10 Very Good Jinshitan 40~50 None Excellent TABLE 11-2 Summary of Annual Exceedances of Air Pollutants from 2001 to 2005 (percent) Year SO2 NO2 PM10 CO > Grade II 2001 0.8 0.0 6.6 0.1 81.4 2002 1.3 0.0 6.7 0.0 89.7 2003 1.9 0.0 6.0 0.0 71.2 2004 1.3 0.0 7.9 0.1 76.3 2005 4.7 0.1 8.6 0.0 80.0 Average 2.0 0.0 7.2 0.0 79.7

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0 ENERGY FUTURES AND URBAN AIR POLLUTION TABLE 11-3 Average Seasonal Concentrations of Criteria Pollutants (2001- 2005) in µg/m3 Seasons SO2 NO2 PM10 CO Spring 35 31 108 510 Summer 16 25 69 440 Autumn 29 29 78 580 Winter 69 31 86 720 Mean 37 29 85 560 Class I standard 20 40 40 4000 Class II standard 60 80 100 4000 Figure 11-3 illustrates elevated concentrations at the Ganjingzi district, fol- lowed by the Qinghiwa Bridge area. Figure 11-4 shows a decreasing trend for total suspended particulate (TSP) with compliance to the Class II standard achieved after 1996. PM10 remained below Class II standard, and shows little variation from 2001 to 2005. SO2, in Fig- ure 11-5, has been in compliance with the Class II standard since 1995. Although a downward trend is found between 1993 and 2000, SO2 increased from 1990 to FIGURE 11-3 Spatial variations of SO2, NO2, and PM10, interpolated from measurements averaged from 2001 to 2005.

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0 THE DALIAN ExPERIENCE 0.50 0.40 TSP PM10 TSP-PM10 (mg/m3 ) 0.30 Class II TSP 0.20 Class II PM10 0.10 0.00 1985 1990 1995 2000 2005 FIGURE 11-4 Trends of TSP and PM10 concentrations in Dalian since 1985. Also shown are Class II standards. 0.10 11-4 0.08 Class II SO 2 0.06 SO2 mg/m 3 0.04 Class I SO 2 0.02 0.00 1985 1990 1995 2000 2005 FIGURE 11-5 Trends of SO2 concentrations in Dalian since 1988. Also shown are Class I and Class II standards.

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0 ENERGY FUTURES AND URBAN AIR POLLUTION 1993, and from 2000 to 2005. NO2 (not shown) increased along with TSP between 1991 and 1995; then it gradually descended toward the Class I standard. CO (not shown) remained stable and generally achieved the Class I standard. Emissions estimates in Figure 11-6 show that 70.5 percent of SO 2 and 57.4 percent of soot dust originated from industries. Fugitive dust sources are not included in the inventory. In addition to local sources, Dalian is also affected by transported dust from Mongolia to the north and by steel production and coal combustion from the northern cities (e.g., Anshan, Liaoyang, Shenyang, Fuxin, Benxi, and Fushun). By 2005, there were 441 registered industries reporting environmental statis- tics in Dalian. Table 11-4 shows that the top 29 sources accounted for 75.3 percent of total emissions. The thermoelectric power industry accounted for 49.5 percent and the petrochemical industry accounted for 25.8 percent of industrial SO 2 emissions, whereas the cement industry contributed to 23.4 percent of industrial TSP. These 29 enterprises have become the focal point of Dalian’s air pollution Residential 33.8% Residential 25.7% Industry 70.5% Industry Transportation Transportation 57.3% 3.8% 8.9% FIGURE 11-6 Distribution of 2005 emissions estimates for SO2 and TSP. TABLE 11-4 Dalian’s Major Sources of SO2, Soot, and Dust (2005) 11-6 Standardized Fly Ash/ Pollution Load SO2 Suspended Dust Emission Emission Industry Unit Number Percent Amount/kt Percent Amount/kt Percent Thermoelectric power 10 43.11 41.48 49.49 5.96 14.26 Petrochemical 3 22.75 21.65 25.83 3.94 9.43 Cement 12 7.48 1.27 1.51 9.79 23.42 Other major sources 4 1.94 — — 0.77 1.84 Subtotal of the major 29 75.28 64.40 76.84 20.46 48.95 sources Total of the city 441 100.00 83.81 100.00 41.80 100.00

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0 THE DALIAN ExPERIENCE control strategy. Accordingly, the electric power, petrochemical, and building material industries have become the three key industries in the city targeted for pollution control. Figure 11-7 shows that 62.2 percent of inventoried emissions are located in the city center, including 52.5 percent from the Ganjingzi District. Estimated 2005 emissions for SO2 were 506.6 thousand tons (60.2 percent of the total). Ganjingzi District, north to northwest of the city center, is the old indus- trial area. It is home to many large state-owned enterprises such as the Dalian Second Power Plant, the Dalian and Xiaoyetian cement plants, the Dalian Steel and Chemical Corporations, and the Dalian Oil Plant. Prevailing northerly winds during winter transport air pollution to the city center. Dalian has attempted to limit coal consumption during rapid economic growth as shown in Figure 11-8. SO2 emissions per 10,000 units of GDP in Dalian is 6.37 kg, lower than in Shanghai (7.2 kg), and in the nation (18.9 kg). An appar- ent downward trend is found for inventoried TSP emission (Figure 11-9), which follows a similar pattern to TSP concentrations as shown in Figure 11-4. ENERGY RESOURCES AND USE The primary fuels used in Dalian are coal, oil, and natural gas that are mostly imported from other areas. Dalian’s local coal reserves are limited and have already been exploited. Renewable energy resources are also limited and are not widely utilized. For 2003, consumption was 15 million tons of coal (crude fuel); 14.2 billion kWh for electricity; 208.5 billion m3 for coal gas; 124,300 tons for liquefied petro- leum gas (LPG); 1.1 million tons for fuel oil; and 180 × 105 GJ for heating. Total and per capita energy consumption in 2005 was 13 and 2.16 tce, respectively, and Ganjingzi Other 52.5% Counties 18.0% City Center 62.2% New Urban Shahekou Zhongshan/ 19.8% 6.3% Xigang 3.4% FIGURE 11-7 Standardized pollution load in different districts. 11.7

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0 ENERGY FUTURES AND URBAN AIR POLLUTION 20 700 SO2 600 COAL COAL CONSUMPTION 10 4 tce 15 500 SO EMISSION (10kt) 400 10 300 2 200 5 100 0 0 1985 1990 1995 2000 2005 FIGURE 11-8 Relationship between industrial coal consumption and SO2 emissions (1985-2005). 11-8 25 20 ASH DUST EMISSION 10kt 15 10 5 0 1985 1990 1995 2000 2005 FIGURE 11-9 Trends of emission estimates for inventoried sources (1985-2005). 11-9

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 THE DALIAN ExPERIENCE energy consumption per unit GDP was 0.6 tce/10,000 Yuan. As shown in Table 11-5, energy consumption per capita is 40.6 percent lower than in Beijing, but nearly double that of the nation. Figure 11-10 shows that gasoline and diesel fuel account for 32.5 percent of terminal energy consumption, followed by electric power (19 percent) and coal (17.9 percent). Coal accounts for 59.3 percent of the primary energy fuel. The contributions of primary, secondary, and tertiary industries to Dalian’s GDP in 2003 are shown in Table 11-6. Figure 11-11 shows that secondary industry accounts for nearly half of terminal energy consumption, followed by transportation (~30 percent). It is apparent that secondary industries are highly energy intensive. As of 2003, Dalian had 28 power plants, though this number encompasses 10 combined heat and power (CHP) plants, and 8 plants for private industrial supply, in addition to the more conventional coal-fired plants (3), wind farms (3), hydropower (3), and fuel oil (1) plants. The installed capacity was 2,416 MW. TABLE 11-5 Energy Consumption Intensity National World Unit Dalian Liaoning Beijing Average Average Energy Tce/capita 2003 2.16 — 3.64 1.14 2.05 consumption per capita GDP energy Tce/10000 Yuan GDP 0.60 1.83 0.80 1.22 2.5 consumption 2005 Fuel Oil 9.8% Refinery Gasoline Dry Gas and Diesel Syngas 8.4% 32.5% 1.2% Coke 1.8% Heat 6.8% LPG 2.5% Coal Power 17.9% 19.0% FIGURE 11-10 Main terminal energy consumption 11-10

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 ENERGY FUTURES AND URBAN AIR POLLUTION TABLE 11-6 Comparison of Contribution Proportion of Each Industry to GDP of Dalian in 2003 Primarya Secondaryb Tertiaryc Items Industry Industry Industry Total Domestic GDP 14.56 78.21 70.49 163.26 (billion RMB) Proportion/percent 8.9 47.9 43.2 100 Residential Transportation 8.3% 29.5% Primary Industry 0.1% Tertiary Industry 13.3% Secondary Industry 48.8% FIGURE 11-11 Structure of energy consumption in Dalian (2003). For 2003 and 2004, the generated energy was 12.3 and 13.65 billion kWh; and annual power consumption was 14.2 and 15.5 billion kWh, respectively. Note that 11-11 power production was slightly lower than power consumption, signaling a need to import electricity from other regions. In 2003, daily production of synthetic coal gas was 730,000 m3, with a total capacity of 208,500,000 m3. Residential use consumed 137,000,000 m3. The total capacity of LPG supply was 124,000 tons, of which residential use consumed 61,400 tons. District heating is the primary means of heating in Dalian, and it is provided by steam from central heating plants. City heating, industrial purposes, and cool- ing utilize 80 percent, 18 percent, and 2 percent, respectively, of the total steam production from these plants. Since the early 1990s, Dalian has developed CHP

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 THE DALIAN ExPERIENCE co-generation and central heating systems. New energy-efficient equipment and building materials have been used. Renewable and clean energy sources are being explored, such as biogas, straw biomass conversion, wind power generation, solar energy water heaters, and seawater heat pumps. Energy conversion levels are low and energy efficiency needs to be improved, particularly since electric power consumption has been increasing rapidly. The exploitation of new and renewable energy sources is insufficient to meet rising energy needs. POLLUTION AND ENERGY POLICIES AND THE APPROACH TO AIR QUALITY MANAGEMENT Air pollution control measures have been implemented that include industrial source controls, new source prevention, centralized heating, gasification and co- generation, urban planning and restructuring, and vehicle emission controls. From 2001-2005, the city invested 12.9 billion RMB, or nearly 2.1 percent of GDP, into environmental protection (DEPB, 2005). Industrial Source Control Since 1985, 3,678 projects on emission source control were initiated at a cost of 1.12 billion RMB. More than 7K billion m3 of sulfur-containing waste gas was treated with an estimated 8.73 million tons reduction in suspended dust (Table 11-7). Efforts for SO2 reduction include flue gas desulfurization (wet and dry) and increased combustion efficiency through boiler improvements. Dust removal efforts included electrostatic precipitators, bag houses, and cement furnace improvement. In 2004, SO2 emissions were 103,000 tons, ~20 percent below the target (125,000 tons) set by the State Council. As part of the joint anti-pollution/pollution prevention program between Japan and China (in Dalian, Chongqing, and Guiyang), Dalian received US$100 million to finance 13 projects on cleaner production and technological transformation. This resulted in annual TABLE 11-7 Industrial Pollution Control Statistics, 1985-2005 Investment Pollution Control Measures Dust Reduction Years (million Yuan) (Number) (thousand tons) 1986-1990 141.75 2491 960 1991-1995 94.76 616 1220 1996-2000 192.13 401 1390 2001-2005 693 170 5160 Total 1121.64 3678 8730

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 ENERGY FUTURES AND URBAN AIR POLLUTION emissions reductions of 20,000 tons of SO2, 20,000 tons of fly ash, and 1,000 tons of NOx in Dalian. Several small factories without pollution-control devices were closed to eliminate pollution. These included 4 lime factories, 11 charcoal factories and 150 small-scale charcoal ovens. New Source Prevention Since 1986, new sources are required to perform environmental impact assessments. New sources need to be in compliance with the santongshi3 policy. In 1996, 14 projects were rejected due to potential pollution impacts and 206 factories were fined for failing to follow santongshi. In addition, santongshi encourages the substitution of new technologies for the old ones. Centralized Heating, Gasification, and Co-generation Since 1992, central heating and power co-generation has been encouraged. The Beihai, Xianghai, Taishan (Phase I), and Donghai (Phase II) thermoelectric plants have dismantled inefficient boilers and promoted central heating. In 2004, there were 37 districts receiving central heating, covering an area of 12 million m2; 1,194 boilers and 887 chimneys were removed and the central to non-central heating ratio for downtown districts reached 74 percent (DEPB, 2005). In the past, coal gas or LPG have been used for commercial and residential cooking. At present, the two gasification plants supply 100 percent of the city’s cooking fuel, eliminating the use of coal briquettes (DEPB, 2007). Urban Planning and Restructuring Several projects (e.g., “May 24” [�uersi] soot treatment, “blue-sky jade-sea” [lantianbihai]) were initiated to remove 1,687 coal-fired low-capacity boilers (below 1 ton) and 860 chimneys in 1999. SO2 and fly ash emissions were reduced by 2,550 and 31,000 tons, respectively. A coal distribution center was built in Dalian to discourage the use of high-sulfur and -ash coal. The center promotes and sells clean coal with sulfur content lower than 0.5 percent by weight and ash content lower than 10 percent. Similar coal standards are in place for major industries. Since 1992, if corporations are in non-compliance for energy and water consumption by the specified deadline, they are required to implement mitigation plans, or to relocate their plants outside of urban areas (Bai, 2002). From 2001 to 2005, relocation from downtown to outside urban areas was completed for 85 3This is a Chinese policy to ensure that environmental regulations are addressed at the planning, construction, and operation stages of project development.

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 THE DALIAN ExPERIENCE plants. Advanced processes and equipment were installed for city center coal-gas plants in order to maintain compliance. Approximately half of Dalian’s residents utilize public transportation for trips in the city, and though this share is beginning to give way to increased personal vehicle use, the government has invested $232 million to construct a light rail transit (LRT) network, in order to better serve urban areas and to guide future urban growth, with planned extensions nearing completion (Liu and Yang, 2006). In addition to the LRT network, Dalian has three tram lines and 87 bus routes to serve the nearly 3 million passenger trips taken daily. Vehicle Emission Control Dalian has implemented an annual motor vehicle emissions inspection pro- gram. It also conducts on-road emission detection to prohibit non-compliant vehicles from driving (DEPB, 2005). Unleaded gasoline and LNG gas have been in use since 1997 and 2000, respectively. Taxis with dual LNG and conventional fuel systems are now in use. Ethanol (10 percent in gasoline) use was required in Dalian beginning in 2000, and was further mandated as part of a province-wide regulation in 2004. Violators will be fined from US$600 to $3,600. Dalian has increased the width, length, and quality of roads. Intelligent traffic management at the Dalian Traffic Direction and Control Center was implemented to improve traffic flow. From 2000 to 2005, highway road length increased from 549 to 640 km. In 2005 there were 425,000 motor vehicles registered in the city, with a projected annual increase of 15 percent per year, or approximately 700,000 motor vehicles in 2010 (DEPB, 2005). Environmental Regulations and Civil Society In 1991, the city promulgated its first environmental management statute, and in 2000 it called for “further control of air pollution.” Presently, there are 20 local environmental protection rules, which play important roles in the environmental quality of the city. Thirty-one corporations received ISO 14001 environmental management system certification, and 42 corporations were named Model Environmental Pro- tection Corporations. The Dalian Environmental Protection Volunteer Association, established in 2003, encourages civilians to improve the environment by driving one day less per month, along with other activities. FUTURE DIRECTIONS Dalian’s pollution prevention and control strategy, as well as its energy forecasts, are based on its 11th Five-Year Plan for 2006-2010. It is estimated that

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 ENERGY FUTURES AND URBAN AIR POLLUTION Dalian’s GDP will increase by 13 percent annually. Energy demand will also increase, as shown in Table 11-8. There are three projected energy supply and demand issues over the next 10-20 years: • Coal consumption for primary energy will decrease from 62.2 percent in 2003 to about 44 percent in 2020. However, coal will remain the main source of energy (Table 11-9). • The energy consumption structure will change. Natural gas and nuclear energy consumption will increase, and the effects of energy-saving technologies will become apparent. • Energy consumption will increase at a rate lower than that of GDP. Air Quality Goals Dalian’s air quality goals for 2010 are shown in Table 11-10. The Chinese government is transitioning from “sacrificing” to “optimizing” the environment while growing the economy. By 2010, Dalian is expected to attain Class II air TABLE 11-8 Forecasted Energy Demand in Dalian in Mtce Category 2003 2005 2010(a) 2010(b) 2020 Terminal coal consumption 1.48 1.44 0.60 0.40 0.11 Coke 0.16 0.20 0.30 0.20 0.20 Oil-fired 0.87 0.72 0.50 0.30 0.23 Gasoline, diesel, and coal oil 2.90 3.64 2.73 2.35 3.15 LNG 0.21 0.39 4.91 5.46 11.38 Coal consumption for power generation 5.68 6.43 9.00 9.11 11.48 Other electricity 0.22 0.22 0.00 0.00 0.00 Gross 11.52 13.04 18.04 17.82 26.54 Energy growth rate per year (percent) 6.38 6.71 6.46 3.94 GDP grow rate (percent) 14.3 13 13 7 TABLE 11-9 Forecasted Coal Consumption in Dalian Category 2003 2005 2010(a) 2010(b) 2020 Coal consumption (Mtce) 7.16 7.87 9.60 9.51 11.59 Proportion of coal in prime energy 62.15 60.35 53.22 53.37 43.67 (percent) Proportion of coal for power 79.33 81.70 93.75 95.79 99.05

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 THE DALIAN ExPERIENCE TABLE 11-10 Current and Target Values for Air Quality and Emission Standards, and for Energy Consumption Current value Target value No. Items (2004) (2010) 1 Days of air quality reaching Class I standard 75 100 2 Days of air quality reaching or better than 350 360 Class II standard ≤0.075 Annual average PM10 (mg/m3) 3 0.086 ≤0.030 Annual average SO2 (µg/m3) 4 0.038 ≤0.040 Annual average NO2 (µg/m3) 5 0.036 6 Fly ash emissions (10,000 tons) 5.77 5 7 Industrial ash dust emissions (10,000 tons) 2 1.5 8 Total SO2 emissions (10,000 tons) 10.3 9 9 SO2 emission from medium or large sources 7.5 7 (10,000 tons) 10 Opacity (percent) percent) ) 87 93 11 City’s central heating to coal consumption 73.9 85 ratio/percent 12 Energy consumption per GDP 0.6 0.45 (tons of coal/10,000 RMB) quality standards for 360 days, which would include at least 100 Class I days. Total SO2 emissions in Dalian should be reduced to <90,000 tons annually. In order to achieve these energy and air quality targets, Dalian has set a number of specific goals, including: • Use domestic supercritical technologies for ne� coal���red po�er plants. Zhuanghe Power Plant will install two 600 MW generators which have been domestically developed based on foreign advanced technologies (MOST, 2006). • Construct Liaoning�s ��rst nuclear po�er plant. The Hongyanhe nuclear power plant plans to begin operating by 2010. Starting and target capacities are 1,000 and 4,000 MW, respectively. • Build and expand coal���red thermoelectric plants and expand central heating. Ten CHP plants will increase installed capacity by 2,000 MW and will increase district heating areas by 10 million m2. The central to non-central heating ratio of the city center will surpass 85 percent by 2010 and will reach 70 percent in the three northern cities and Changhai County. • Improe pollution�control e�uipment. Desulfurization devices (with removal efficacy of ≥85 percent) will be installed for new and existing coal-fired power plants. Plants should adopt low-NOx burners and leave space for installation of flue gas denitrification equipment. Desulfurization devices will be installed on existing power plants by 2010 (DEPB, 2005).

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 ENERGY FUTURES AND URBAN AIR POLLUTION • Phase out old �et dust remoal deices. A more efficient bag house or precipitator will be installed on new coal-fired plants. The average efficiency of dust removal equipment in the city should reach 98 percent in 2010. • Enforce industrial dust emissions. By 2009, Dalian will close cement fac- tories in four urban and suburban districts and will phase out cement corporations using polluting vertical kilns. 1,392 small coal-fired boilers and 925 chimneys will be removed. Small (<10 tons) heating coal-fired boilers are to be eliminated by 2010. • Ensure ef��cient dust control. During demolition, water should be sprayed to minimize suspended dust. Earth and stone should be transported in bags and covered when in bulk. Windscreens and shelter belts should be installed around construction sites. Sand-gravel stacks and mortar mixers are forbidden; hillocks should be covered and roads should be hardened at construction sites. • Conduct air �uality research. This research should lead to specific dust control measures. • Establish a ehicle and traf��c control management system. By combining annual vehicle inspections, road surface monitoring, and parking management into a unit, Dalian will be able to manage vehicle emissions more efficiently. An automatic emission monitoring system will be established to inspect busy traffic sections. • Control ehicle fuel oil components and minimize apor emissions at gas stations. Energy Sector Strategy Dalian’s energy and air quality management strategy builds on the principles of developing a circular economy (see Chapter 5, Box 5-1). The city plans to give priority to projects that save energy, improve efficiency, and encourage economic development. The government will facilitate this by exercising macroeconomic control to establish a market for energy efficiency. Specifically, it will: • Adjust the terminal energy structure. Dalian seeks to decrease its reliance on coal while increasing electrification, gas-fired power generation, and central heating. The first planned LNG receiving station (expected to handle 3 million tons annually by 2009) will allow 3-4 thermal heating plants to operate on natural gas instead of coal (DEPB, 2005). • Deelop a regional energy base. As an international shipping center for petroleum, LNG, and coal, Dalian is expected to become a power generation base for northeast China. Related plans include developing petroleum refining, nuclear, and coal-fired power generating capacity. • Improe energy ef��ciency and the po�er supply. The government will work with the residential, industrial, and commercial sectors to improve energy efficiency and guarantee supply, reliability, and safety.

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 THE DALIAN ExPERIENCE • Deelop combined cooling, heating, and po�er (CCHP) and �aste�deried po�er. The city plans to establish distributed energy power stations (natural gas- fired) with the application of CCHP. Dalian has begun to convert 1,500 tons of municipal waste a day, the estimated daily household waste in urban areas. Incineration will generate 277 million kWh of electricity annually, and plans are in place to develop a facility with 20 MW capacity. • Demonstrate rene�able and energy ef��ciency projects. The city will build wind power plants with 200 MW capacity and will continue work on a tidal power demonstration project. It also plans to implement solar PV lighting systems to replace the current street lights. Dalian has applied solar water heaters in archi- tecture projects since 2005, and energy-saving exterior insulation systems since 2006. It also uses heating and cooling systems with water heat pumps in seven districts. • Power plants, chemical plants, and cement factories all release large quan- tities of waste heat. The city will work with these industries to develop energy- saving heating mechanisms and to inspire the application of new technologies for future waste heat utilization projects. Analysis Dalian provides an example of a Chinese city enjoying steady economic growth, while still maintaining high environmental standards. Measures taken to improve local environmental quality have likely benefited Dalian in attract- ing regional investment. The city also benefits from a strong scientific and tech- nological capacity within the local universities and research institutes, aided by an active local bureau of science and technology. Dalian’s proactive approach to guiding urban development has thus far allowed it to maintain a high percent- age of public transportation use, though this will likely be a primary challenge in coming years as the development zones expand. From 1990 to 2000, Dalian’s sprawl expanded some at the fringe of the existing urban district, but also in a linear fashion to the northeast, along Dalian Bay (Deng et al., 2005). Bicycle ridership (already low) and walking will likely decrease in share as automobile use increases in share, as an alternative to the LRT. Energy security is an important concern in Dalian and will likely impact most decisions related to energy and air quality. Recent efforts to promote energy efficiency and renewable energy technologies should bring both short- and long- term benefits. In particular, by developing a market for energy efficiency, Dalian may be able to reduce the need for additional capacity, which in the U.S. experi- ence has been extremely cost effective, in addition to its savings in potential air emissions. The city intends to develop into an energy base, and this will require attention to the unintended consequences, such as air pollution from petroleum refineries (directly emitted and fugitive leaks), added coal-fired capacity, and the shipping industry, which is a central component of the city’s future development

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0 ENERGY FUTURES AND URBAN AIR POLLUTION plans and is expected to increase dramatically. This latter source is still not well documented, and from Los Angeles and other port cities’ experiences, the shipping industry is a major contributor to regional air pollution. Dalian is focusing on air quality research to support dust control policies, but it will also benefit from research on PM2.5, which is primarily from combustion sources. Having a better understanding of the ratio of PM2.5 to total PM, as well as its sources, will help Dalian develop effective strategies to protect human health. NOx and ozone monitoring and research are both in need of more attention, par- ticularly given the large and rapidly increasing vehicle fleet. Considering Dalian’s large service industry, and the amount of building construction taking place, there is a major opportunity to improve building energy efficiency. Building-integrated PV ought to be explored, and efficiency standards should be enforced for all new construction. This is one area in which Dalian could continue to be a national leader in environmental management and policy. As Dalian expands and local air quality improves, it will need to increase its understanding of regional air quality. This will involve cooperation with other cities in the province, as well as potentially with Korea and Japan. Regional modeling and source apportionment (e.g., Wan et al., 2006) will aid Dalian in developing locally appropriate strategies which benefit regional air quality. Dalian’s strong local science and technology capacity will be an asset in develop- ing and implementing clean energy technologies, as well as research support for its air quality management. REFERENCES Bai, X. 2002. Industrial relocation in Asia: A sound environmental strategy? Environment 44(5):8-21. Deng, X.Z., J.Y. Zhan, and R. Chen. 2005. The Patterns and Driving Forces of Urban Sprawl in China. Geoscience and Remote Sensing Symposium Proceedings, IEEE International, July 25-29. DEPB (Dalian Environmental Protection Bureau). 2005. The Current Status and Development Plan of Dalian Environment Protection. Presentation to committee on October 28, 2005. DEPB (Dalian Environmental Protection Bureau). 2007. Dalian Environmental Protection Bureau website, http://www.dlepb.gov.cn (accessed March 15, 2007). DFTECB (Dalian Foreign Trade and Economic Cooperation Bureau). 2007. Dalian FTECB website, http://www.dalian-gov.net. DICP (Dalian Institute of Chemical Physics). 2006. Dalian ICP website, http://www.dicp.ac.cn. Liu, R. and F. Yang. 2006. Urban Development Directed by Light Rail Transit (LRT): A Case Study of Dalian, China. Proceedings of the 85th Annual Meeting of the Transportation Research Board, Paper No. 06-2870, January. MOST (Ministry of Science and Technology). 2006. China Science and Technology Newsletter No. 437, April 30. Wan, X.L., J.W. Chen, F.L. Tian, W.J. Sun, F.L. Yang, and K. Saiki. 2006. Source apportionment of PAHs in atmospheric particulates of Dalian: Factor analysis with nonnegative constraints and emission inventory analysis. Atmospheric Environment 40:6666-6675.