Climate change is an issue having an effect on sustainable development and human well-being. Therefore, it has become the global issue pulling collaborations across the world to reduce the GHG emissions and alleviate its impacts. Many countries have jointly set the common goals to reduce GHG emissions in order to control an increase of the earth’s average temperature to well below two degrees Celsius. Consequently, policies and laws have been put in place to promote the GHG emission reductions in many countries, including the People’s Republic of China, such as the Emission Trading Scheme (ETS), and the fuel consumption restrictions for energy production.
Major activities causing the GHG emissions conducted by BPP are summarized as following:
|Direct GHG Emissions (Scope 1)||Indirect GHG Emissions (Scope 2)|
Due to its power and energy generation business, BPP has directly consumed fuels for energy productions. As a result, the company has mainly focused on operations to reduce the direct GHG emissions (Scope 1) resulted from various fuel consumptions. BPP’s direct GHG emissions released from using various fuels, are accountable for 99% of its total GHG emissions since the company’s business operations are the upstream business on generating power and other energy supplied for industrial and residential consumptions.
BPP sees the opportunities and capabilities to reduce the GHG by improving the energy utilization efficiency, reducing losses in the production process, conducting a study on alternative fuels in order to achieve its GHG reduction target. It is also seeking chances to invest in the renewable energy, energy technology and smart energy solutions in accordance with the Greener & Smarter strategy.
BPP has closely monitored policy changes and assessed risks associated with climate change in preparation for adapting itself to both physical, policy, and legal changes in several countries. Therefore, the company has to adjust itself in various ways, for example, using the business continuity management system to assess risks, impacts and opportunities associated with changes in order to align with the Task Force on Climate-related Financial Disclosures (TCFD), including setting the carbon pricing as part of the investment consideration in various projects.
BPP has established working groups to supervise climate change operations as following:
- GHG emission intensity of 0.609 tonnes CO2e / MWh, a decrease of 9.9%, compared to the target set.
- An equity power generation capacity of 288.1 MW from renewable energy, representing a 36% progression of its target to have at least 800 MW from renewable energy by the year 2025.
Key Activities and Projects
The People’s Republic of China has gradually announced laws related to energy consumption control, GHG emissions and environmental quality control over the years. In responding to the nationally determined contributions (NDCs) policies to reduce GHG emissions announced in the meeting of states parties to the United Nations Framework Convention on Climate Change, the local clean energy projects are continuously planned and promoted.
Zhengding CHP Plant has continuously implemented projects to increase its energy efficiency and to reduce the GHG emissions in response to policy and legislative changes related to energy consumptions and climate change including adapting itself to changes in energy consumption patterns. Throughout the past three years, the plant has undertaken projects to reduce GHG emissions as following:
- A project to control exhaust gases emitted from stacks and reduce heat losses: A study on engineering design was conducted by using a heat pump for heat exchanger instead of constructing a steam distiller. The heat pump can separate steam mixed with exhaust gases and control the generation of white smoke. It can also recycle heats from exhaust gases. The investment budget for construction is about CNY 35.5 million, while the operating cost is about CNY 2.4 million per year. Benefits contributed from this project include:
- About 14 MW of heats are recycled into the system, covering an additional heat supply area of about 340,000 square meters, or about 5,000 households, equivalent to CNY 10.56 per year of revenue.
- Able to recycle all water resulted from condensation, reducing groundwater consumption by 130,000 tonens/year
- Reducing sulfur dioxides and particular matters emissions by approximately 30%.
- Decreasing energy consumption, leading to a reduction of GHG emissions by approximately 41,000 tonnes/year
- Selected as one of the top 100 Eco-environmental innovation projects in 2020.
- The Intelligent monitoring and control system for heat exchangers station: About CNY 1 million was invested in installing the sensors such as temperatures, pressures and flow rates, including developing a remote monitoring and control system. This makes it possible to quickly monitor and control operations. As a result, it can reduce electricity consumption by about 18.4% or decrease the electricity consumption intensity by 0.36 KWh/square meter (from 1.96 KWh/square meter to 1.6 KWh/square meter). This represents a reduction in GHG emissions of approximately 0.34 kilograms of CO2e/square meter, valued to approximately CNY 864,000 per year of annual energy cost savings.
- Conducting a feasibility study project to invest in carbon captures used in the industrial sector: The study was completed in 2021 and is in the process of studying on constructions. It is expected to capture about 100,000 tonnes of CO2, or about 10% of the total GHG emissions from Zhengding CHP Plant. CO2 can be sold to industrial factories in the vicinity where CO2 is used in the production process.
- Conducting a feasibility study on investment in solar rooftop installation: In response to the government’s policy that has been promoted for more local clean energy projects, Zhengding CHP Plant has been selected to be the operator of the solar rooftop installation project. It aims to increase the installation of solar panels on the roofs of governmental buildings, factories and communities to a total of 167 MW by 2023. It is expected to generate power of approximately 200,000 MW per year and reduce GHG emissions by 119,000 tonnes of CO2e/year.
Operation Risk Management
BPP has adopted the Business Continuity Management System (BCMS) in preparation for events interrupting business operations such as natural disasters, decease epidemics. Consequently, the company will be able to deliver products and services to customers and various stakeholders immediately.
Changes in policies and regulations regarding energy and GHG emissions
BPP has a responsible unit to monitor and anticipate changes in regulations in all areas open for operations at the local level and the central government in order to be able to adapt itself to the changing environmental quality standards that are more extreme. At the same time, it is looking for opportunities to invest in the renewable energy business receiving more supports from the government.
In the past year, the Company used the internal carbon price which would determine the GHG cost in various areas used as part of the cost to analyze the investment value and possibility of new projects in the future. The Company focused on low carbon emission projects and factors to reduce the Company’s GHG emissions reduction in order to achieve the goal set and to be prepared for adaption to the possibility of legal changes and enforcement to reduce GHG emissions in the near future.
The Company conducted a preliminary assessment of indirect GHG emissions (Scope 3) which involved operational activities as follows:
BPP has assessed risks, impacts, and opportunities arising from climate change during the years 2022 – 2040, with a scope covering investments of all business units with significant investment proportion, or over 30%.
Climate Change Policy