energy

After trusting the top spot for Foreign Direct Investment (FDI), China now leads the world in total investment in renewable energy with USD 50 billion.

The indicators listed in the report by REN21 are telling : in 2010 China was the top installer in wind turbines and solar thermal systems as well as the top hydropower producer. It added 29 GW of grid-connected renewable capacity. Renewables accounted for 26% of total installed electric capacity (18% of generation but only 9% of final energy consumption). China accounts for the world’s half of new installed capacity in wind power. It also leads the list of new capacity in solar hot water/heat.

The country plans to have 362 GW of renewable capacity installed by 2020 (the equivalent of 300 nuclear reactors), including 300 GW hydro, 30 GW wind, 30 GW biomass and 1.8 GW solar PV. Central government’s policy are complemented by initiatives at the local level. For instance, Beijing aimed to have 40% of electric power capacity by 2010 and Shanghai aimed to have 200-300 MW of wind and 10 MW of solar PV by 2010. The city of Lianyangang requires solar hot water in all new residential buildings up to 12 stories.

In spite of this major drive, renewable energy (including hydropower) only fills for 25% of its energy needs. The rest comes from nuclear 1% and thermal 73%.

Chinese wind turbines may not be as advanced in terms of technology as their overseas competitors’ but they are up to 30% cheaper. This explains partly how Chinese wind manufacturers emerged from nowhere - before 2006 there was no Chinese firm in the top 10 global manufacturers - and managed to capture a significant share in the world markets. Help from the government to develop “indigenous technology” and traditional market-for-technology probably explain the rest of the success.

In addition to selling turbines, a number of Chinese companies are taking further step by establishing themselves directly abroad. The Longyuan Power Group acquired rights to develop a 100 megawatt project in Canada. Sinowell just agreed on a EUR 1.5 billion investment to build a 1500 megawatt windfarm in Ireland and is exploring offshore farms in Greece. It is no surprise either that a couple of month ago, Sinovel released a 6 megawatt turbine prototype (with 128 meter blades in diameter) and announced it is working on a 10 megawatt turbine, the world’s largest.

The question now is how Western governments and companies can counter China’s succesful industrial policies.

Capturing Solar Energy in orbit and beaming it down to Earth in a 24 hours a day controlled process, in combination with hydrogen technology, apppears as one of the global, clean and sustainable solutions to replace fossil fuels. The application is expected to be operational in 30 years from now, and technological development is already underway.