Shanghai Orient Champion Paper, one of China’s leading tissue paper manufacturers, made the switch from off-site coal-fired to on-site gas-fired power generation. As a result, energy efficiency increased, the carbon footprint shrank by 60 percent, and power costs dropped by a fifth.
By Justus Krüger
The paper industry is among the most energy-intensive and highest carbon emitting around, so power consumption and emission reduction are even more crucial topics than in most other sectors. It is no wonder then that Xu Mingyan, Deputy General Manager at leading Chinese tissue paper manufacturer Shanghai Orient Champion Paper (SOCP), has taken a profound interest in this issues. Together with his colleagues he holds regular meetings specially to discuss how to save power and reduce emissions while also cutting costs. “We have studied decentralized energy – and invested in it.” affirms Xu.
“We have studied decentralized energy – and invested in it.”Xu Mingyan, Deputy General Manager at Shanghai Orient Champion Paper
Less emissions, more flexibility
In the past, the company had relied on electricity from a nearby coal-fired power plant. But Xu and his colleagues gradually stopped considering this a satisfactory option. Eventually, they decided to generate the power for the company in-house. Since spring 2018, two gas turbines from Siemens Energy installed on the company’s premises generate 15.8 megawatts of energy as well as 38 tons of process steam for the paper-drying process. While these two units are the first of their kind to be installed in China, the model already boasts a proven track record in many different industries worldwide.
Not only do they minimize the firm’s carbon footprint, they also massively reduce energy consumption through increased efficiency. At the same time, the new installation increased the flexibility and reliability of the company’s energy supply. “This is a very significant contribution,” Xu explains. With the new turbines, the company reduced its CO2 emissions from energy by no less than 60 percent while minimizing its energy costs by a fifth.
“We are very happy to make another breakthrough in the market for distributed power generation,” says Yao Zhenguo, Senior Vice President of Siemens Energy, CEO of Siemens Energy Greater China, of the trusting, mutually beneficial business partnership with SOCP. “As a trustworthy partner of China, Siemens Energy will continue to provide its full support to the energy transition.” As such, Shanghai Orient Champion Paper’s move to gas-fired industrial power generation is in line with China’s strategy to transform the energy supply system.
Transition in the country with the highest global energy demand
The country’s energy transition follows after decades of unparalleled growth: In 1990, China’s power consumption ranked third worldwide, behind the USA and Russia, and was at 871 million tons of oil equivalent (Mtoe) per annum. In 2021, China's annual energy consumption totaled 5.24 billion tons of standard coal. The figure is 2.99 billion tons of standard coal in 2010. Today, China consumes more power than any other country – about as much as the USA and India, who rank second and third globally, combined.
While this marks China’s rise to economic superpower status and improved livelihoods for hundreds of millions of citizens, it also means a big ecological impact. In order to reduce this footprint and make sure it can grow sustainably, China’s energy sector is in the process of transforming on several fronts at once. This implies the fast growth of renewables, gas and nuclear as major factors in China’s energy mix. Another central part – and one necessary for the optimization of the electricity power structure – is the country’s transformation of its energy sector from centralized to on-site or distributed energy.
A future-proof business case
Considerations such as these were crucial at SOCP in Shanghai as well. The city and its neighborhood increasingly required local power generation to switch from coal to gas. SOCP’s decision to produce power locally and to do so with a small carbon footprint fits into this strategy. And when a manufacturer reduces its carbon footprint by 60 percent, this has a decisive impact and sets a precedent for others to follow.
Equally important, the switch also makes business sense. Not only because it saves a lot of money by increasing energy efficiency, contributing to the flexibility and stability of the production lines, and selling excess power to the local grid. Siemens Energy’s gas turbine technology also proved a smart long-term, future-proof investment.
By 2030, Siemens Energy’s gas turbines aim to be able to run on 100 percent hydrogen and previous models can be retrofitted to allow for a zero-carbon combustion process. Thus, the units in operation today in Shanghai will continue to play their role in decreasing carbon emissions in industrial power generation in decades to come.
“Our project is a benchmark in the paper industry. It can play a promotional role throughout the country in the future.”Chen Chaofeng, Energy Plant Manager at Shanghai Orient Champion Paper
Strong regional partnership built on mutual trust
For the successful implementation of this forward-looking technology, Siemens Energy’s designated partner for industrial power applications in China, Zhuzhou AECC PST Nanfang Gas Turbine Co., Ltd, proved crucial.
“The Siemens Energy team has been very supportive of the technological operation, including the initial installation,” says Chen Chaofeng, the head of SOCP’s energy department. Building lasting relationships and long-term cooperation with its customers as well as regional technology partners has always been the approach of Siemens Energy in China and elsewhere, both with regard to individual clients and the country as a whole.
At SOCP, these two aspects of the story reinforce each other. “Our project is a benchmark in the paper industry,” says Chen of the cooperation with Siemens Energy. “It can play a promotional role throughout the country in the future.”
October, 2022 (updated version), September, 2020 (first publication)
Justus Krüger is a freelance journalist based in Hong Kong. He has written for the Financial Times Deutschland, GEO, the South China Morning Post, the Berliner Zeitung, and McK Wissen.
Combined picture credits: Siemens Energy