Opening an international conference on renewable energy in Beijing last November, President Hu Jintao drew applause while declaring that China saw "strengthening the development and use of renewable energy as a must" .
With soaring oil prices, frequent electricity shortages all over the country and worsening pollution, it would seem that the prospects for China's renewable energy industries have never been better. Beijing is keen to promote low-polluting alternative energy not only as a solution but also to improve its profile as a responsible international player. But while going green has consensus with the Chinese leadership, much depends on government will if renewable energy such as solar, wind and geothermal are to emerge as significant sources in China's overall energy mix.
"If China wants to implement new energy technologies, there is no doubt that they can do it very rapidly. We have seen this happening in the telecommunications industry and other sectors," says James Brock, an independent energy analyst based in Beijing. One of the problems with Beijing's commitment to developing renewable energy sources, though, is that demand for energy is outstripping the speed of development of alternative-energy sources.
China's energy consumption has soared in recent years amid economic growth that, last year, neared ten percent. Chinese researchers say the country simply must boost its energy-generation capacity if it wants to continue powering its high economic growth. China must double its current total production to 1,000 gigawatts (gw) by 2020, to avoid a major electricity shortfall. While all alternative energy industries have been undergoing expansion, the energy supplied by them is still trifling compared to the country's demand.
For example, China's wind-power generation capacity, reached just one gw in 2005. Despite the emphasis on clean energy, out of concern for both the environmental costs of the country's heavy use of fossil fuels and security risks, imported oil and coal continue to account for most of the energy consumption in China.
Inexpensive, but dirty, coal-based energy currently accounts for 70 percent of the country's total energy production. The government's goal is to increase the use of renewable energy from seven percent of the country's total electricity consumption today to 15 percent by 2020. "It is a nice wish-list," comments Brock, "but as a percentage of the system I don't think it matters much now and I don't think it would matter much within the next ten years."
Costs are the paramount hurdle for developing renewable energy resources in China. In wind power generation for instance, China cannot yet manufacture large-scale and high-tech wind turbine generator systems and has to import much of the necessary technology. As a consequence, it still costs a Chinese wind farm 1.5 times more to generate the same amount of electricity as a coal-fired power plant.
The government has decided to spend a total of 1.5 trillion yuan (185 billion US dollars) on renewable energy by 2020. But supporters of alternative energy caution that adequate financial-support is called for. At the start of this year China put into effect its first ‘Law on Renewable Energy', which experts involved in its drafting say took about two years of lobbying to be approved. The legislation requires the government to provide supporting regulations detailing who will be required to purchase the more expensive renewable energy.
The National Reform and Development Commission (NDRC), the state's top economic planning body, recently announced it would make it mandatory for power companies with installed capacities of over 5 gw to ensure that 5 percent of their electricity generators are fuelled by renewable energy sources by 2010.
"Although the proposed percentage might not sound like a big number, it will mean a substantial increase for China as it will boost the use of new energies," Zhang Guobao, vice-minister of NDRC told the press at a briefing on Jan. 12. Some 15 power companies boast an installed capacity of more than five gigawatts, accounting for more than half of the country's total capacity. The country's biggest power producer, China Huaneng Group, for instance, with a capacity of 34 gw by the end of 2004, now only has 140 megawatts (mw) generated by wind.
It remains to be seen how the government would enforce the mandated alternative energy requirements. The predecessor of the current law failed to enforce requirements on efficient energy use with local governments commonly disregarded them. Moreover, traditional energy consumption does not pay towards the cost of the environmental degradation it produces, invalidating the urgency for high polluters to switch to cleaner energy. Still, bullish advocates of renewable energy in China believe the country has reached the threshold in its voracious use of fossil energy and the government is well aware of it. "China must go to sustainable energy and cannot follow the US approach to using energy,"
Li Junfeng, secretary general of the China Renewable Energy Industries Association told the English-language magazine ‘China International Business'. The consensus seen emerging among Chinese energy experts is that the country would be better suited to following France's example for developing renewable energy. The French experience of persevering with the development of nuclear energy, setting high environmental standards for building and car industries and pursuing high energy efficiency are "worth China's careful study", according to expert Guan Qinyou.
"French example might be one that is pre-occupied with its own priorities but it has ensured them an energy consumption level only 60 or 70 percent of the U.S." Guan, a researcher with the Chinese Academy of Social Sciences, says.
Posted on 26th January 2006
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