China takes first place in Ernst and Young's index for renewables and in 2010 it passed the US to become the world's largest energy consumer. In March, the National People’s Congress voted through the Five-Year Plan 2011–15 for National Economic and Social Development. With a third of its targets relating to environmental issues, it’s been hailed the "Greenest FYP in China’s history” Ernst and Young have analysed what that will mean and how it will happen.
It's an interesting insight into the numbers that sit behind changing an economy, in what will be one of the most incredible revolutions we have seen.The Five Year Plan's environmental targets include an increase in the proportion of primary energy generated by non-fossil fuels to 11.3% by 2015, up from 8.3%. To help meet this target, it intends to build at least 70GW of new wind farms and 5GW of solar farms.
The latest statistics from Bloomberg New Energy Finance indicate the China Development Bank made around US$35b in low-interest credit available to Chinese renewables companies in 2010.
A complaint filed with the World Trade Organization in December 2010 by the US claimed assistance given to China’s wind energy manufacturers violated global trade rules. In March, however, the China Development Bank agreed to lend the equivalent of €1.3b to the Linuo Group, a solar cell maker.
At the end of 2010 China also overtook the US to become world leader in wind power installations.The Ernst & Young report shows that the latest Global Wind Energy Council statistics show it installed around 16GW in 2010 – almost half of global installations. Yes, small sentence, but huge impact -almost half of global wind installation was in China in 2010. This took cumulative installed capacity to 42GW.
However, China ranks second globally for grid-connected capacity, with more than a third yet to be connected at end 2010. It will need extensive grid upgrades to take advantage of its estimated 300GW of exploitable onshore wind resource.
Q1 saw the tightening of rules over turbine manufacturing in a bid to control overcapacity and prevent prices being forced down. Local investment bureaus have been asked not to approve the construction of new turbine production plants, excepting the expansion of existing facilities. This follows a policy implemented last year only allowing government support for the production of turbines over 2.5MW.
Onshore wind grid issues and support for large-scale turbine manufacture has enabled enthusiastic provincial governments to persuade national authorities of offshore wind’s potential. The market is still in its infancy, says Ernst and Young with only one operating project – the 102MW Donghai Bridge plant near Shanghai, but strong growth is forecast.
Provincial governments suggest 30GW by 2020 is a realistic target. The National Development and Reform Commission recently awarded licenses to build four offshore wind farms in eastern Juangsu Province.
Japan’s nuclear disaster has prompted a call for an increase in China’s solar capacity target from 20GW to 50GW by 2020. China is under pressure to develop its own solar market and reduce reliance on components export, amid concerns that European FIT (feed-in Tariffs) cuts and a growing US supply chain could produce an oversupply of panels.
China is preparing its second CSP (concentrated solar power) tender – a 92MW project in Yulin City, costing around US$300m (€213m) and using US technology developed by ESolar Inc.
China is using competitive bidding rather than European-style subsidized FITs to reduce power prices: the Government’s first CSP tender generated an average solar power price of CNY0.96 (€0.104) per kWh compared with €0.475 in Spain, but this is still double the price of conventional power. For now, the larger state-owned utilities seem content to sacrifice financial return for expertise, but China has said it will spend next year studying Europe’s premium payment schemes for solar power to determine the most effective incentive system. A very useful study, indeed.
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