This March 24th issue of the Economist magazine published an article called “Asian Innovation” which discusses how global innovation now often flows from the East to the West. Their references include cars and healthcare, but just as easily could be have been energy, specifically those technologies revolving around the coal chemical and coal power industries.
Back when the Chinese central government put forth the idea to use its vast coal resources to develop chemicals to support its populous, they relied heavily on technologies from western firms for gasifiers and chemical catalyst systems. If you visited many of the existing facilities, you would recognize many of the suppliers as large US- or European-based companies.
Newer plants, however, are increasingly being built using Chinese technology. I’m not talking about knockoffs and price plays (some of which do exist), but rather innovative, often cheaper, processing technologies developed by institutions such as the Dalian University of Technology and the Chinese Academy of Sciences. Advances in methanol production and conversion and gasifiers are being developed and, since the country is one of the few in the world converting coal to chemicals, will most certainly be further optimized and price reduced.
Both the US and China rely heavily on coal and with the use of coal comes the discussion of carbon capture. To date, there has not been a cost effective technology for capturing CO2 but China has been innovating to develop a solution.
Just this week, Bloomberg published an article, China Shows U.S. How to Push for Carbon Capture, about a Chinese CO2 capture solution, which costs about a third of existing technologies. Their approach hints to the essence of the Economist article about “frugal innovation” because what they’ve developed is a simpler, lower tech approach. Innovation does not have to imply more technology.
As the world continues its quest for additional energy resources, it is likely that other countries (including the US) will look to convert their coal assets to fuels along with power. If this happens, it is a good bet that the innovations around coal from China will help lead the way.