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China renewables: Blowing in the wind

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COMMENTS

9 November 2010 15:37

Catherine Chan is an environmental lawyer and journalist in Beijing.

The China dream — that eternal, simplistic myth — enthrals starry-eyed Western investors with its siren song of one billion customers and an expanding, demanding and increasingly sophisticated market.

Illustrating the corporate sector's seemingly insatiable appetite for applying the dream to new industries and situations, China was tipped by Ernst and Young in August as the most attractive market for renewable energy in the world.

This in part stems from China's moves to dial down its coal additions and rapidly increase the amount of electricity it generates from renewable sources. In 2009, China installed the equivalent of one new turbine every hour, with some 10,129 turbines installed.

The future for wind looks bright, on paper at least, according to a joint report released last month by Greenpeace, the Global Wind Energy Council and the Chinese Renewable Energy Industries Association. Projections estimate China's wind power capacity will equal 13 of the Three Gorges Dams, or 230GW of installed capacity, by 2020. If realised, this would amount to cutting 150 million tons of coal consumption — not much, considering China's 2009 total consumption was just over 2 billion tons.

But in spite of the optimism and real growth in the sector, Chinese power companies are still young and hindered by practical issues. Access to wind power for the grid is frequently hampered by an unstable, out–dated grid infrastructure that varies across the nation.

In August, China made amendments to its very broad Renewable Energy Law, in an attempt to curb the oversupply generated by what many consider to be an overly large and unwieldy industry. Tales abound of rusting belts of wind farms in areas which receive nominal or only slim seasonally-sufficient winds to generate energy of any significance.

Wind–rich areas in China are concentrated in remote regions of northern China — Xinjiang, Inner Mongolia, poverty-stricken Gansu and Jilin. These regions sit on the edges of the existing national power grids (there being at least four major power grids), making interconnection problematic. This amounts to a lot of waste.

According to the China Electricity Council and Gao Hua Securities Research, grid connectivity only reached 68 per cent of wind farms in China in 2009. The UN stopped approving Clean Development Mechanism certification for Chinese wind power projects in December 2009, after controversy over whether the power rates set by the government to calculate carbon credits were unfairly low.

A major focus of the government's 12th Five Year Plan, China's supportive policies for the renewable industry have been widely regarded as the catalyst in making it a world leader in renewable equipment manufacture. This has garnered some attention overseas. In September an American labour union filed a suit accusing China of unfairly subsidising its clean energy industry, in contravention of the WTO's free-trade rules. According to Sun Zhenyu, China's WTO envoy, this smacks of politics and protectionism.

Reliably controversial New York City Mayor Michael Bloomberg agreed last week while in Hong Kong and Shenzhen, calling for Americans to 'lay off the Chinese':

Let me get this straight: There's a country on the other side of the world that is taking their taxpayers' dollars, and trying to sell subsidized things so we can buy them cheaper, and have better products, and we're going to criticize that'

Comments like these will no doubt be welcomed by Chinese commentators and politicians alike. China is likely to focus on its domestic efforts —  large amounts of capital are needed to bridge long–distance power lines, and improving power grid connectivity is probably going to be prioritised — particularly with the introduction of smart grids, which may start to eventually ease grid connectivity issues. Rumblings in the US are unlikely to distract China, at least in the short–term. I could be proven wrong — but as Mayor Bloomberg warned, a lack of understanding could be part of the problem:

We’re about to start a trade war with China if we’re not careful here … only because nobody knows where China is. Nobody knows what China is.

Photo by flickr user Chris Lim, used under a Creative Commons licence.

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