The ability to produce affordable power while protecting the environment has emerged as one of the world’s greatest challenges to economic progress. Increasingly, the demand for affordable energy and concerns about environmental sustainability are in conflict, forcing difficult trade-offs between economic growth and environmental protection. Coal provides in excess of 70% of China’s primary energy. Its coal fired power plants, accounted for over 70% of the total electrical power generation capacity with 690GW in 2010. The capacity of coal power plants is projected to be more than 1200 GW by the end of 2020, almost doubling in those ten years. Coal is the most plentiful energy source in China, with 192 billion tons of proven recoverable reserves, containing enough energy to last for more than 100 years. Clearly, coal will continue to play a major role in power generation to ensure the availability of abundant and reasonably priced electricity nationwide and a solution to coal’s pollution effects is critical for both environmental and economic reasons.

The government was forecasted to spend $170 billion during the 11th 5-year plan to provide environmental protection in China. The target was too aggressive and not achieved so China is redoubling its effort in the 12th five year plan to spend additional dollars, almost the equivalent of $1.8 Trillion USD in projects for environmental control, to achieve the necessary environmental controls for SO2 and now NOx controls. Mercury controls are on the horizon and expected to be legislated in less than 3 years.The requirement for SO2 and NOx control with soon to be introduced Hg control requirements in an active market like China supported by operating subsidies creates a perfect situation for the highest pollution removal technology at the most attractive prices and will be aggressively adopted in this industry.The emerging environmental crisis has given warning that China can no longer blindly put economic growth above all else. China is looking for a solution to air pollution, and is committing significant resources to mitigate their crisis.

In view of the whole environment in China, CEG has been active in acquiring or partnering with western technologies. Coupled with the reduced capital and operating costs of entry and operating subsidies for pollution control. CEG believes that the highest pollution removal technology at the most attractive prices will be aggressively adopted in this industry.