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China’s renewables strategy annoys the US

China renewable energy | China’s renewables strategy annoys the US Anthony Harrington

The scale of China’s strategy for renewable power generation is not widely grasped or appreciated in the West. Japan’s horrendous difficulties with the Fukushima nuclear reactors in the wake of the tsunami has made the Chinese government revisit its nuclear strategy, which had been – and still is – a major part of its energy policy. As a consequence, it has revised upwards the contribution it expects “green” energy to make to power generation. Wind and solar generation look like being the main beneficiaries, although new nuclear reactor build-outs, probably with some modest reductions in the number of new plants and with some additional attention to safety features, are still very much part of the plan.

Renewable Energy World (REW) is an enthusiastic follower of China’s push for green energy and a must-read site for anyone interested in keeping abreast of how wind and solar power are faring in the world’s fastest growing economy. According to REW, total renewable capacity in China reached a staggering 226 GW in 2009. However, for those interested in wind and solar, you have to subtract from this enormous figure the almost as enormous contribution of hydro electric power, which amounts to 197 GW.

To say that China’s hydro strategy has a controversial dimension would be massively understating the position. When you rule by dictat and brook no local opposition to your plans, you can build dams and flood regions without troubling yourself unduly about the folk who live on the soon-to-be-flooded land. Nor do you have to trouble yourself too much about the environmental consequences of plonking a vast dam in a particular area, or the downriver consequences of the restricted water flow. But let us pass by this topic since what is done is done, even as the consequences roll on down the decades.

Even with hydro out the picture, that still left China, at the end of 2009, with 25.8 GW of wind energy, 3.2 GW of biomass and 0.4% of grid connected solar power, again according to REW. By way of contrast, China’s total installed power capacity in 2009 amounted to 860 GW. Moreover, as REW notes, “during the five year period 2005-2009 wind power grew thirty-fold, from just 0.8 GW at the end of 2004”.

Today, China is neck and neck with Germany in installed wind power and second only to the US. More significantly, REW points out that China was way ahead of both Germany and the US in new capacity added through 2009, which amounted to 13.6 GW of new wind installations and 0.4% of new biomass power. Thiemo Lang, portfolio manager for the Sustainable Asset Management (SAM) Smart Energy Fund, and who will author a QFINANCE Viewpoint on this topic, points out that in the process of pushing for green power, China has built up a domestic wind turbine manufacturing capacity that is massive and growing. “China is able to build wind turbines at around a third of the cost of western manufacturers,” Lang says. The country’s major wind turbine manufacturers have been fully occupied rolling out turbines for China’s own use, but the CEOs of these companies are not blind to the export opportunities that lie ahead.

This is perhaps one reason why the US, somewhat astonishingly for anyone observing from outside the fray, is attacking China’s green policy through the World Trade Organisation. Where you might expect the US to be applauding any effort on the part of China to move away from coal fired generation, a potent source of green house gas emissions, the leaders of the world’s largest economy actually seem determined to throw as large a spanner in the works as they can. The point? China’s subsidising of its wind turbine manufacturers is giving them an unfair advantage it seems… As if the world did not need as much cheap wind generation as it can get!

Further reading on power generation and China's renewable energy agenda:

Tags: China , green energy , nuclear power , renewables , solar power , US , wind power , World Trade Organisation
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