Resource-rich region, energy hub put sustainability at center stage by tapping latest technology, innovations

When villager Tian Yanhu arrived at his work site at the Ningdong Energy and Chemical Industry Base, in Northwest China's Ningxia Hui autonomous region, as a fresh graduate almost two decades ago, he felt lost.

"It looked very barren. There were no roads or signs at first glance, and we didn't know where to go. But we soon got the hang of it, when we realized the path for development was assuredly set for us," said Tian, 40, who is now director of the economic development bureau of the management committee of the base.

The humble beginnings of one of China's leading natural resources and energy bases－now a modern, model industrial site boasting the latest technology and management practices－point to the importance of resolute planning and consistent implementation to achieve stable and successful development, he said.

"It was always the direction from the authorities, right from the central to the local level, which ensured our progress. Our main priorities were clear from the start," Tian said.

Ningdong is a major coal and coal-to-chemical industrial hub and an energy generation site, tapping large regional deposits. It neighbors the similarly resource-rich Inner Mongolia autonomous region and Shaanxi province.

The base is now banking on its natural advantages, industry experience, sound infrastructure and technical know-how to take a lead in China's low-carbon transition toward green energy for sustainable development.

In September 2020, Chinese President Xi Jinping announced via video link at the general debate of the 75th session of the United Nations General Assembly that China aims to have carbon dioxide emissions peak before 2030 and achieve carbon neutrality before 2060.

A year later, Xi, who is also general secretary of the Communist Party of China Central Committee, reiterated the country's carbon peak and neutrality goals, which have mapped out a national blueprint for green and low-carbon transformation in the coming decades.

In October, the CPC Central Committee and the State Council jointly released a document containing guidelines for achieving the green targets, with specific objectives and measures. China aims to gradually grow its share of non-fossil energy consumption to about 20 percent by 2025 and 25 percent by 2030, and more than 80 percent by 2060.

The emphasis is on establishing a clean, low-carbon and circular economy, increasing energy efficiency, raising the share of non-fossil energy consumption, and cutting carbon dioxide emissions through science, technology and innovation. The guidelines lay out a firm commitment for a green, low-carbon and high-quality development path that gives priority to ecological civilization.

Key development zone

Ningdong has long been identified as a national key development zone, with its large-scale fuel production base including coal, chemical and other crucial resources in the Yellow River basin area of northern China feeding the country's increasing energy needs.

By the end of the 13th Five-Year Plan (2016-20) period, Ningdong, which covers 3,500 square kilometers, achieved a regional GDP of 48 billion yuan ($7.54 billion), with an average annual compound growth rate of 9.5 percent.

The region's total industrial output exceeded 130 billion yuan, with its industrial added value growing 11.3 percent annually, making it the only chemical industrial park with output exceeding 100 billion yuan in Northwest China, according to government figures. More than 160 enterprises, including 12 companies with annual output of over 1 billion yuan each, have set up operations in the base.

In recent years, Ningdong has geared up its coal liquefaction capabilities to process solid coal into liquid fuel, in order to better meet energy demand by increasing the efficiency of regional fossil fuel reserves. The site has become the largest coal liquefaction and coal-based synthetic materials manufacturing facility of its kind in the country, boasting production capacity of 4 million metric tons by 2020.

With coal consumption expected to peak soon, the region is increasingly tapping its strengths in solar, wind and hydrogen energy, among other green sectors.

By 2025, generation capacity for wind and solar power alone is set to exceed 50 million kilowatts, accounting for more than 55 percent of local installed capacity, while power output from the two renewable sources will hit 80 billion kW and make up more than 30 percent of the total energy mix, according to regional authorities.

The moves are expected to help regional GDP hit 70 billion yuan, at an average annual growth rate of over 10 percent, with total industrial output value reaching 260 billion yuan and average annual industrial added value growing more than 12 percent.

Tao Shaohua, deputy secretary of the Party working committee of the Ningdong base and director of the base's management committee, said the area's green transition involves using its natural energy resources more efficiently and sustainably. It will also build on its fuel production capabilities to take advantage of the latest industry developments, in line with environmental priorities such as the protection of key water resources from the Yellow River, which flows through the region.

"We have always adhered to long-term, stable development, firmly forming our industry capabilities and expertise through major projects and investments," Tao said.

"To successfully meet the challenges of a low-carbon future, we will need to continue focusing on technological progress and talent attraction, tapping expertise and experience in the region and beyond, to keep up with the latest green trends toward the next necessary stages of high-end development."

Clean energy push

Hydrogen, seen as a fossil fuel alternative that can be stored more efficiently than solar or wind energy, features prominently in Ningdong's clean energy push. Its production of green hydrogen, which involves using water and solar and wind resources in an electrolysis process, is set to hit more than 300,000 tons by 2025, cutting standard coal use by at least 3.6 million tons and reducing 7 million tons of carbon dioxide emissions, according to the Ningdong base's figures.

Hydrogen infrastructure plans include at least 10 major refueling stations and 30 km of transmission and distribution pipelines in core areas; liquid hydrogen storage and transportation facilities to support annual volumes of over 3,000 tons; and the use of more than 500 hydrogen fuel cell vehicles. Improved technology, research and development and innovation capabilities will also help the sector move toward a total output value of 26 billion yuan.

Green hydrogen, used mainly for chemical production and transportation, is set to expand its reach in Ningdong. This will include a demonstration zone project with a planned investment of 15 billion yuan that can save 550,000 tons of coal in energy consumption and reduce carbon dioxide emissions by 1.1 million tons, with applications extending to vehicle fuel cell production, according to the base.

Leading Ningdong's transition is Ningxia Baofeng Energy Group, with 16,000 employees helping the industry giant achieve an annual increase of 300 million standard cubic meters of green hydrogen.

Expansion of Baofeng's production capacity is expected to take its green hydrogen annual output to 10 billion standard cubic meters, reflecting the group's commitment to becoming "the world's largest green hydrogen producer and supplier", said Liu Yuanguan, president of the group.

The group is laying out a "technologically advanced and economically feasible carbon-neutral scientific path in the global industry", he said. It is doing so in part by using solar energy to produce and deliver green hydrogen to the area's major chemical producers, significantly replacing fossil fuel use. In addition, solar and wind energy are used in a complementary loop that generates "green electricity" for "green hydrogen" and "green oxygen" products, Liu said.

"Through the innovative integration of advanced equipment and technology from home and abroad, the company vigorously promotes the technological upgrading of domestic large-scale equipment and the optimization of production processes and technical parameters," Liu said.

Green hydrogen will also be used in transportation, and will be expanded to various fields to "realize the integrated development of the entire hydrogen energy industry chain toward national energy security and the goal of carbon neutrality", Liu said.

In the digital sphere, the company is ramping up 5G and big data capabilities to increase interconnectivity, which will cover artificial intelligence, the internet of things, cloud computing and other fields with energy resource development, utilization and production safety processes.

"Baofeng also attaches great importance to the construction and improvement of scientific and technological innovation platforms and the transformation and application of scientific research results," Liu said.

"The company embraces internal and external research and development efforts, establishes industry-academic research cooperation with well-known universities and scientific research institutions at home and abroad, builds science and technology innovation platforms, and continuously improves R&D infrastructure and an innovation-focused environment. It actively promotes the transformation and application of scientific research results and has achieved important results in patents," he said.

Three main strengths

Liu pointed to three main strengths of China's energy development path－policy support, the advantage of scale, and an innovation-driven approach.

"In order to drive the development of China's energy industry and achieve its low-carbon goals, the country promotes energy conservation, emissions reduction and clean energy development with new policies and new measures," he said.

China is also the world's second-largest economy and the largest developing country, leading in its speed of development and market potential, with innovation positioned as a major driving force for economic growth, Liu said.

Baofeng's green achievements include a "solar plus agriculture "project that involves more than 2 million solar panels set up on 2,000 hectares beside the Yellow River to tap the 3,000 hours or so of sunshine that the region receives every year.

The panels also offer shade to goji berry crops planted at the site, significantly increasing vegetation cover and helping to provide jobs to local farmers. The project avoided more than 2 million tons of carbon emissions by the end of 2020, compared with a traditional coal-fired plant, according to the company.

By opening up a technical and economically feasible carbon-neutral path for the industry, the energy giant can also offer a demonstrable way for economies along the Belt and Road routes to reduce fossil fuel emissions, Liu said.

Ningdong's environmental inroads are already attracting industry leaders from abroad. Late last year, the initial phase of one of the region's largest foreign investment projects began, involving South Korean chemical and textiles conglomerate Hyosung. The project is touted as a key high-performance facility for spandex and related materials, marking a new step in the industrial transformation and upgrading of Ningdong, with a total investment of 12 billion yuan.

At an event marking the project rollout, Zhang Yajun, a member of the base's Party working committee and deputy director of the base's management committee, said the time span between meetings to explore the project involved 360,000 tons of annual production capacity and bringing it to fruition took less than 300 days. The impressive speed clearly reflected Ningdong's strength in entrepreneurship and innovation, Zhang said.

Joo Young-don, the South Korean company's general manager for project construction, told local media that the project's next few phases are firmly in place, setting it up to become the largest production facility of its kind in the world.

Ling Zhen, who heads the Ningdong bureau that handles investments, said the projects show how the base is building on the raw materials of the region to meet demand in higher-stage production capabilities. This in turn offers a "comprehensive ecosystem supporting complete industry chains" amid the sustainable development drive, Ling said.

Tian, the official at the base's economic development bureau, said, "We've certainly come a long way."

"We used to go all out to attract investors and enterprises to set up shop here. But now we can pick the most promising, suitable ones from all those who are interested in our impressive growth. The challenge now is to stick to the green plan, maintain our trajectory and move up to the next stages."