Last year was certainly one of the most interesting of my life:

• I got MARRIED (sorry internet, no public photos)
• Techyizu had an amazing year of events (register for Spring Barcamp 2012 here)
• After 2 years of service to the environmental NGO JUCCCE (peep their new website!), I’ve left to freelance and look for new challenges.
• I received a really bad-ass bike as a stag-party gift from my dear friends.  How awesome?  this awesome.
• I studied some Chinese, spent time with amazing people from all around the world, visited Hong Kong, Vietnam, Chengdu, Beijing, Tucson, Portland and San Francisco.

The year of the dragon has begun, and we’ve taken these pseudo-vacation days as opportunities to do some house cleaning, fun cooking and goal setting.  We’re really excited for this year!  Goals for this year include

• Serious Gym and exercise time whenever possible
• Pass the HSK5
• Positive career moves!
• Blog more!
• Travel more and blog about it!
• Eat a proper breakfast every morning.  We got started immediately:

Best of luck in your Dragon year, and thanks for reading!  More articles about life in China, the Energy/Sustainability scene, and random detritus coming soon!

I can only imagine the glee in the LARPing community for this tree-house ewok world just outside of Portland.  This is, however, no joke: the builder/operator is Michael Garnier, a world renowned treehouse constructor.  I want to spend some time in his Costa Rican treehouse. that looks awesome.

This reminds me of an early 90s/crystal pepsi era visit to the Dallas Arboretum for their ‘ultimate treehouse’ competition.  I was young, but it was magical.  There’s something extra special about being up in the trees.  But shower afterwards — sap is sticky.

I can’t mention trees and tree climbing without name dropping my college classmate and tree-climbing extraordinaire WIll Koomjian, his project Ascending the Heights, and their kickstarter funded documentary project Treeverse.

Spotted on nerdapproved, check out FairCompanies for some other cool sustainable architecture projects!

In a country so proud of its global stature, football is a painful national joke. Perhaps because Chinese fans love the sport madly and want desperately for their nation to succeed at it, football is the common reference point by which people understand and measure failure. When, in 2008, milk powder from the Chinese company Sanlu was found to have been tainted with melamine, causing a national scandal, the joke was: “Sanlu milk, the exclusive milk of the Chinese national football team!”

I spent my national holiday working and watching foursquare airport/vacation check-ins scroll by.

I did have a wonderful China moment, thanks to an old Shanghainese man in a Lynyrd Skynyrd Confederate Flag hat.

This guy, Skynyrd hat and all, was painting poetry and the odd revolutionary slogan on the slate tiles around The Center, a major building in the center of Shanghai.  Well, that’s what he said he was writing.  I can barely read signs, let alone proper artistic calligraphy.

I watched him ‘paint’ for a while, but the video I took is pretty boring.

Perhaps this is just the laowai talking, but I sure do like the hobbies and habits of retired Chinese. From the Qi Gong, Taichi and adult jungle gyms in the morning to the calligraphy, fan dancing, and boardgames in the daytime, then the night time ballroom dancing in the parks, there are always a group of retirees enjoying themselves.  It’s fun to see; someday soon my Chinese will be good enough to really engage and understand their stories. It sure is good practice.

Bloomberg carries a few more details about Beijing’s changes to the PPC:

The increase will affect the consumer price index “indirectly” by 0.05 percentage point, China Central Television reported yesterday, citing Liu Shujie, head of economic research at the NDRC. Inflation was 5.3 percent in April and has been above the government’s 2011 target of 4 percent every month this year.

So State TV calculates the power price compromises will effect the CPI, slightly.   They are also in the business of downplaying bad news, though I don’t have any data to contradict them.  Based on Reuters’ quotes from earlier this weekthat suggest the completed increases were outpaced by increases in the price of Coal, I can only imagine that we’ll see the CPI climb more, and not just based on power price increases.

The Catch 22 is obvious, right? The Central Government must control inflation to maintain consumer confidence and economic growth. Both of those roughly add up to “Social Stability”. Two of the biggest contributors to inflation are inter-related and out of their direct control: the price of Thermal Coal, and the ongoing, worsening drought. The effects of drought are obvious, and the worse it gets, the more dependent the Chinese power infrastructure becomes dependent on coal power, and thus coal prices. State Owned Power Producers won these rate concessions, but surely will demand much more.

It’s going to be an interesting summer.

Not 3 days after I posted about the showdown between Beijing and China’s State Owned power producers over price ceilings, Beijing announces a 3% increase for some industrial customers. That doesn’t seem like much, but check out the quote below from Reuters, who broke the news.

China said on Monday it would raise electricity prices for some users by about 3 percent, the first increase since 2009 as it tackles its worst power shortage in seven years.

The power price rise affects industrial, commercial and agricultural users in 15 provinces, state media said after a briefing by the National Development and Reform Commission (NDRC), China’s top economic planning agency.

But authorities in the world’s second biggest economy may have already played one of their strongest cards to combat the shortages as the NDRC revealed power companies in 13 of the 15 provinces have been paid higher prices for their electricity since April 10. [Emphasis added]

China’s electricity demand is running so far ahead of supply that it is expected to be short of 30-40 gigawatts of power capacity this summer, twice the deficit caused in Japan by the earthquake and tsunami on March 11.

As famous China Bear Gordon Chang puts it, that’s about the size of Argentina’s entire operational power grid. But Argentina’s population is 3% of China’s (really), so take his context with salt.

News of the 3% increase buries what I find the most interesting: many provinces have been raising rates for industrial customers for nearly 2 months which does not appear to have had a major effect on shortages, since Coal prices were also rising.

If you take a look at the power shortages over the past month, you can see that the hike had no significant impact on the current power shortages,” said Wang Wei, senior analyst at Guotai Junan Securities. “Actually, it didn’t have the impact it should have because after the on-grid power price hike in April, coal prices rose again, eroding the power price hike.

“Coal imports could rise after the power rise hike as coal producers and trading companies are likely to raise coal prices, triggering more coal imports. Every 0.01 yuan rise in power price could offset an increase of 50 yuan in coal prices,” he said.

At an average of 0.02 yuan per kilowatt hour, that would add 100 yuan ($15.43) to a tonne of coal, which was trading around 850 yuan per tonne on May 20. [COAL/CHINA]

That’s a huge price gap. This coal problem will not be changing any time soon. Analysts project Chinese coal imports to double by 2015.
To anchor this new information into the previous discussion, this is what has changed:

1. China’s central government started addressing the power price ceiling issues that were dis-incentivizing coal based power production.
2. Their changes began very quietly (if not totally in secret) and are very small.
3. The changes have already been nullified / outpaced by global price increases for thermal coal.

So, what happens next? More price increases, and this summer, industrial areas will face forced idling and power cuts. This is still a planned economy to a certain extent, so a lot of thought and planning will go into managing these measures to minimize economic impact.

“But look what will happen if electricity shortages aren’t solved: the inflationary pressures will be even larger because the price of raw materials will continue to surge because of heavy demand. In the end, looking at the power shortages, there is simply no choice but to raise prices,” Lin told Reuters.

China has already cut power supplies to some industrial users in eastern, southern and central regions as pent-up demand rebounded after local governments ordered power cuts in late 2010 for the purpose of achieving energy saving goals.

The State Grid of China, the country’s dominant power distributor, has said it will cut supplies to more industrial users in summer, when the shortfalls are expected to worsen.

“This (price rise) was definitely not the last one,” said Shen at Mizuho. “But it depends on the coal price and on a lot of things, like CPI inflation and the power shortage situation.”

Even if the price of coal plummeted, the drought conditions that have reduced hydro-electricity output would still create a sizable energy shortage this summer. So the powers that be are now going to spend the summer: keeping coal plants running (cost/price management) , managing the energy impact of the drought (not to mention environmental and social impacts), and managing the numerous inflationary pressures that result from all of this.

Not easy.

NYTimes graphic showing Coal use statistics for China

“In a high-stakes game of bluff, several large refineries were suddenly moghtballed for what the companies called ‘scheduled maintenance’. [...] The threat of angry truckers and taxi-drivers being forced to queue to get petrol in the summer heat, not to say businesses being forced to close down for lack of fuel, backed the authorities into a corner. Wen Jiabao, the Premier, personally stepped in to negotiate an end to the dispute, approving a lump-sum subsidy to the companies to solve the shortages.

–The Party by Richard McGregor

It was worse this morning

A sandstorm which hit Shanghai on the first two days of May has significantly increased the level of respirable particles in the city and made Shanghai one of the most polluted city in the country, with Shanghai’s air pollution index 87 points higher than that of the runner-up on May 2. Shanghai seemed to be covered with a grey lid on May 2. The air was full of dust, leading to poor visibility. The buildings in the city proper looked vague in the dust, and the cars parked outside were covered with a thick layer of dust. The Shanghai Environmental Monitoring Center (SEMC) said that as the sea wind blew the dust back to Shanghai, the city’s respirable particulate matter index rose to 500 at 4 a.m. on May 2, and the air pollution in the city reached “severe” levels. According to a diagram drawn by the SEMC, Shanghai has been in “severe” air pollution levels for the past two days.