Chinese data centers are dabbling in renewable energy

Interest in renewable energy in China is growing, and leading Chinese companies are riding on the opportunities to go with renewable energy, according to Greenpeace. The environmental campain group is set to bring out a new release of the Chinese edition of its Clicking Clean report, which investigate the use of renewables within the IT sector.

The renewable energy market in China is increasingly open, Yuan Ying, program manager of Climate and Energy at Greenpeace East Asia, told DCD in advance of the publication of China Clicking Green 2019, a new release in Greenpeace’s Clicking Clean series of studies report, which examines the sustainable energy usage of Chinese IT and data centers. .

The report is due to be published at the end of the year, and Ying is scheduled to release some information from the report at a “Clicking Clean China Report Unplugged” session at DCD>Beijing in December..

Quiet adoption
Chinese companies have been quietly adopting renewables in small pilots, with some embarking on notable largescale deployments, she observed. For instance, Alibaba’s data center in Zhangbei in Hebei province – a mammoth cloud facility hosting over 600,000 servers – purchases wind power directly from local wind farms there. Elsewhere in China, a Baidu data center in Shangxi province purchased 550 GWh of wind power in 2018.

“These examples show that renewable energy is increasingly becoming available in China and top IT and data center companies are demonstrating great potential to lead the sector to make a shift towards 100 percent renewable energy,” said Yuan. At the moment, she says the data center sector’s renewable energy intake is around 23 percent.

China has made incredible progress in building renewable energy sources. Yuan said: “China is home to more renewable energy capacity than any other country in the world. By the end of 2018, solar and wind installation capacity wind [is more than] Europe’s entire solar and wind capacity.”

Room for improvement
There is room for improvement though. Yuan admitted that there were no “large shifts” towards renewables, and corporate renewable energy procurement in general is still at a relatively early stage. She says awareness in this area is “slowly building up”, however. ,Chinese companies are showing a lot more in this year’s report than in the inaugural report two years ago.

Crucially, no Chinese technology or data center companies have made a public commitment towards fully adopting renewable energy, unlike technology giants from the West such as Microsoft and Google. Energy usage transparency is not yet a norm with technology firms, which doesn’t help in building awareness.

“Few companies are openly sharing their overall electricity consumption, electricity mix, and energy carbon footprint. The lack of transparency poses a challenge for public stakeholders to gauge how the companies are handling their energy usage and its associated carbon footprint,” noted Yuan.

To drive the adoption of renewables, she suggested that companies establish an integrated internal structure or have a dedicated team of employees tasked to manage energy sustainability. This can help overcome the current situation where this function typically spans multiple departments, making it difficult for organizations to realize the full potential of switching towards renewables, she explained.

Increasing adoption of renewables
Shenzhen, China
10 Sep 2019
Greenpeace: China’s data centers are primarily coal powered, emit 99m tonnes of CO2
And it’s only set to get worse

What of the Chinese government’s push to improve energy efficiency by stipulating a PUE target? The average PUE (power usage effectiveness) of data centers in China was 2.2 in 2015, and has improved significantly over the lats few years. Earlier this year, the Shanghai municipal authorities issued a three-year action plan to bring the PUE of new data centers to 1.3.

While Yuan acknowledges that PUE serves as a powerful indicator that can be used to drive data centers towards substantial improvement in energy efficiency, she doesn’t see it as the solution.

“We believe that optimizing energy efficient alone is not enough to address the scale of the challenges we are facing from climate change. We need to start addressing the carbon emissions and air pollutants associated with the source of power that feed into our data centers.”

On this front, uneven policies in the emerging renewables market pose a barrier for data center providers to fully access renewable energy, says Yuan, due to unequal progress in the development of renewables across different provincial markets.

This places a heavier burden burden on data center providers to shop for the best renewable options that their data centers can access. Moreover, many companies lack the capacity or knowhow to navigate the inherent complexities of renewables to identify market opportunities for the best deal.

Urgent action needed
Fortunately, the situation is fast-changing, and additional procurement mechanisms are becoming increasingly available thanks to market reforms by the Chinese government.

“Since 2015, power market reforms have created unprecedented opportunities for companies to procure renewable energy via a diverse set of mechanisms, including building onsite distributed renewable projects, procuring clean power directly from renewable energy generators and purchasing green power certificates.”

Ultimately, a lot more can be done by the industry, and urgently. After all, China’s data centers are heavily reliant on coal power, emitting an estimated 117 million tons of CO2 in 2018. This is projected to reach 194 million tons by 2023, assuming no changes in the ratio of renewable energy intake.

Conversely, should data centers’ renewable energy intake increase by a third to 30 percent, a whopping 19 million tons of carbon emissions can be avoided by 2023, says Yuan. This is equal to the emissions from roughly 10 million round-trip transatlantic flights. So every data center that adopts renewable energy matters. And the earlier, the better.

For now, Yuan is hopeful that various renewable pilot projects – though small – may yet bear fruit. “We believe as China power reforms deepen and corporate procurement mechanisms diversify, these pilots will become the seeds for a massive shift towards renewable energy.”


Climate change: Asia ‘coal addiction’ must end, UN chief warns

A labourer loads coal in a truck next to containers outside a logistics center near Tianjin Port, in northern China, 16 May, 2019.Image copyrightREUTERS
Image captionNew coal power plants are planned in Asia

The chief of the United Nations has warned Asia to quit its “addiction” to coal in a bid to tackle climate change.

UN Secretary General António Guterres said countries in the region were among the most vulnerable to global warming and should be on the “front line” of efforts to stop it.

He cited a new study that found that Asian countries were at particular risk of climate-driven flooding.

Coal is a major source of power in many Asian countries.

Speaking to reporters in the Thai capital Bangkok on Saturday, Mr Guterres described climate change as the “defining issue of our time”.

The UN chief referenced a study published on Tuesday, which found that climate change would put millions more people at risk from coastal flooding by 2050 than previously thought.

The majority of those implicated were in developing countries across Asia, the study said.

UN Secretary General António Guterres speaks at the 74th session of the United Nations General Assembly in New York on 24 September, 2019Image copyrightAFP
Image captionMr Guterres said climate change was a “defining issue” of our time

Mr Gutterres said that while “people can discuss the accuracy of these figures…what is clear is that the trend is there”.

He said the issue was “particularly sensitive” in Asia, where a “meaningful number” of new coal power plants are planned.

“We have to put a price on carbon. We need to stop subsidies for fossil fuels. And we need to stop the creation of new power plants based on coal in the future,” Mr Gutterres warned.

Presentational grey line

Who is at risk in Asia?

Tuesday’s report by Climate Central, a US-based non-profit news organisation, said 190 million people would be living in areas that are projected to be below high-tide lines in the year 2100.

It found that even with moderate reductions in greenhouse gas emissions, six Asian countries (China, Bangladesh, India, Vietnam, Indonesia, and Thailand), where 237 million people live today, could face annual coastal flooding threats by 2050.

  1. China – 93 million people
  2. Bangladesh – 42 million
  3. India – 36 million
  4. Vietnam – 31 million
  5. Indonesia – 23 million
  6. Thailand – 12 million



Malaysia’s solar sector on the rise

Malaysia’s solar photovoltaics (PV) industry is on the rise thanks to strengthening government support, growing investor confidence and reducing costs.

Already ASEAN’s biggest solar PV employers, Malaysia’s solar sector is well poised for more growth given the favourable conditions that are developing.

Besides having relatively high irradiation levels, Malaysia already has an established solar manufacturing sector, although most of the solar equipment used is exported at present.

“The expanding domestic manufacturing base for renewables components will ensure that there is a reliable and low-cost supply chain for project developers amid global falling technology costs,” noted Fitch Solutions Macro Research in a report last month.

“We believe that this will be a key supportive factor to the Malaysian solar industry over the coming year, as greater numbers of manufacturers set up in the country,” added the credit rating agency.


Renewable energy is being promoted at the highest levels of government, and speaking at an environmental event on the side-lines of the United Nations General Assembly (UNGA) in New York last week, Malaysian Prime Minister Dr Mahathir Mohamad promised that current incentives and tax breaks such as the Green Technology Financing Scheme and the Green Investment Tax Allowance will be continued to spur further development in the renewable energy sector.

Such policies are needed if Malaysia is to achieve the ambitious target of increasing its energy generation mix from renewable energy from two percent in 2018 to 20 percent by 2025 as announced by the Energy, Science, Technology, Environment and Climate Change Ministry last September.

Malaysia has the potential to generate more than enough electricity to meet its current demand if all the roofs in Peninsular Malaysia are fitted with solar panels.

There are over 4.12 million buildings with solar rooftop potential in the peninsular (West Malaysia) said Malaysia’s Energy, Science, Technology, Environment and Climate Change Minister, Yeo Bee Yin in May, and they could generate 34,194 megawatts (MW) of electricity if they are fitted with solar PV systems. The country’s total electricity production currently stands at an average of 24,000 MW.

Concept of NEM
Source: Sustainable Energy Development Authority (SEDA)
The revised Net Energy Metering (NEM) scheme has also been received well, and a total of 16.6 MW of NEM was approved by industry regulators Sustainable Energy Development Authority (SEDA) in the first four months of 2019 compared to 18.24 MW in 2018.

Since the NEM’s introduction in 2016, solar power producers would sell excess electricity to Malaysia’s largest electricity utility company, Tenaga Nasional Berhad (TNB), at RM0.31 pkWh (US$0.07 per Kilowatt per hour) and purchase it at about RM0.50 (US$0.11) pkWh.
But since 1 January, the sale and purchase prices of electricity under the NEM has been at the same price – a move aimed at improving solar PV’s return on investment.

Reduced cost

As it is, solar energy has now become cheaper than gas-generated power thanks to advances in technology.

The government of Malaysia opened bids for an estimated RM2 billion (US$477 million) worth of projects under the third round of the Large-Scale Solar (LSS3) scheme in February, and speaking to local media last month after the bidding process ended, Yeo revealed that the first four projects – 365 MW out of 500 MW – were actually bid below the gas-generation price of RM0.2322 (US$0.0554) per kWh.

“In the second round of LSS bidding (in 2017), RM0.32 (US$0.0763) per kWh was the lowest price; that became our reference price when we opened LSS3 for bidding this year. But when the bidding exercise closed, the lowest bid was at RM0.1777 per kWh (US$0.0424),” she said.

“That is a 45 percent reduction in just a few years. That is why we are very confident that the renewable energy price will reach parity (with that of gas) in the foreseeable future,” she added.


Businesses and investors have taken note of this, and SEDA approved 17 solar investor applications in the first three months of this year alone.

Yesterday, CIMB – one of the country’s largest banks – announced it had allocated RM100 million (US$23.9 million) to its renewable energy financing scheme for small and medium enterprises (SMEs), and one of its main initiatives is to provide companies with 100 percent financing to cover the cost of solar PV systems and installation on their rooftops in support of the NEM scheme.

“Our planet is at a tipping point from an environmental, economic and social (EES) perspective, and we must take action now … to begin pursuing profits with a purpose,” stressed CIMB Group CEO, Zafrul Aziz.

On 19 September, Mydin Mohamed Holdings Berhad (Mydin) became the first chain retailer in Malaysia to install a solar PV system at its outlet in the city of Ipoh, in the northern state of Perak. They expect the 324 kilowatt-peak (kWp) solar PV installation in the department store to save up to RM3.24 million (US$773,000) in electricity bills throughout its 25-year lifespan.

In June, the Seberang Perai Municipal Council (MPSP) in the northern state of Penang became the first municipal council in the country to choose solar energy generation by installing solar panels on the rooftops of public markets and some state government offices.

With TNB proposing an internal restructuring of its generation, transmission and retail divisions – which is expected to be completed in the third quarter of 2020 – the increasing liberalisation is set to improve competition and grow investments in the solar PV sector.


CIMB joins 130 banks worldwide on responsible banking

CIMB Group Holdings Bhd today became one of the Founding Signatories of the United Nations Environment Programme Finance Initiative UNEP-FI Principles for Responsible Banking.

According to one of the largest banking group in Asean, the initiative demonstrated CIMB’s strong commitment to strategically align its business with the UN’s Sustainable Development Goals and the Paris Agreement on Climate Change.

“As a founding member of the UNEP-FI Principles for Responsible Banking, we are convinced that only in an inclusive society, founded on human dignity, equality and the sustainable use of natural resources, can our employees, customers and other stakeholders thrive,” CIMB group chief executive officer Tengku Zafrul Aziz said in a statement.

“By signing the Principles, we commit to using our products, services and relationships to support and accelerate the fundamental changes in our economies and lifestyles necessary to achieve shared prosperity for both current and future generations,” Tengku Zafrul (on left in photo below) said.

As a signatory of the Principles for Responsible Banking, CIMB joins a coalition of 130 banks worldwide, representing over US$47 trillion (RM196.16 trillion) in assets, committed to playing a crucial role in achieving a sustainable future.

Taking place at the start of the UN General Assembly, the official launch of the Principles for Responsible Banking marked the beginning of the most significant partnership to date between the global banking industry and the UN.

“The UN Principles for Responsible Banking are a guide for the global banking industry to respond to, drive and benefit from a sustainable development economy.

“The Principles create the accountability that can realise the responsibility and the ambition that can drive action,” said UN secretary-general Antonio Guterres at the launch event, attended by the 130 Founding Signatories and over 45 of their CEOs.

The statement noted the Principles for Responsible Banking is supported by a strong implementation and accountability framework.

By signing it, CIMB is committed to being transparent on both its positive and negative impact on people and the planet.

The Principles for Responsible Banking will also provide CIMB with an effective framework to systematically identify and seize new business opportunities created by the emerging sustainable development economy and enable the bank to identify and address related risks.

Under its current strategic sustainability growth plan Forward23, CIMB has begun engaging with regulators, investors, customers, suppliers, employees and communities to create a more sustainable and resilient future for all.

CIMB will also be hosting “The Cooler Earth”, its inaugural sustainability summit, on Oct 1-2, 2019, to be held in Kuala Lumpur.


Putrajaya to review carbon emission commitments next year

KUALA LUMPUR (Oct 1): The government is looking to review its carbon emissions commitments under the 2016 Paris Agreement.

Speaking at CIMB Group Holdings Bhd’s The Cooler Earth Sustainability Summit, Minister for Energy, Science, Technology, Environment and Climate Change Yeo Bee Yin said the government would be reviewing its national determined commitment under the Paris Agreement.

“Our national determined commitment [under the Paris Agreement] is a 45% reduction in carbon emissions intensity relative 2005. This means by 2030, we want to reduce our carbon emission intensity, which means carbon emissions relative to gross domestic product, to 2005 levels,” Yeo said.

The review will take place at the next United Nations Framework Convention on Climate Change next year.

As of today, Malaysia has reduced its carbon emissions intensity rate to 33%. The minister noted that Malaysia is at a comfortable level with its ability to meet the 45% target, and that the emissions target could be raised.

With regard to the global fight against climate change, Yeo emphasised that while it is everyone’s responsibility to combat climate change, there must be common but differentiated responsibilities.

“This means that more developed countries have to play their part in assessing climate change as well. If you want less developed countries to do more, you have to give them the assistance to do so,” she said.

Malaysia entered the Paris Agreement in 2016.