China, the world’s leading producer of greenhouse gases, is taking an aggressive path to develop alternative sources of energy. Already the world’s leading generator of hydropower — a renewable but sometimes controversial power source because of the impact on river ecosystems — China now aims to be the front runner in wind- and solar-power generation. In 2007 the government directed that by next year at least 3% of large power companies’ generating capacity should come from renewable sources (excluding hydropower); this target jumps to 8% in 2020. That may not sound like much, but according to a recent study by the China Greentech Initiative, a coalition of Chinese and foreign businesses, NGOs and government organizations, environmental technologies including renewable energy could become a $1 trillion market in China by 2013. In a recent commentary, Pulitzer Prize – winning journalist and author Thomas Friedman wrote that China’s decision to go green “is the 21st-century equivalent of the Soviet Union’s 1957 launch of Sputnik.”
The fast-growing country’s huge appetite for electricity is behind the push. While China’s total power capacity will nearly double by 2020, the amount that could come from wind and solar is expected to jump more than fivefold, aided by significant government assistance. Beijing announced in March it will subsidize 50% of costs for certain solar-panel projects, and 70% in remote regions. (See pictures of the new ways to boost energy efficiency.)
But as often happens in China, this potential bonanza could prove to be a mirage for foreign companies. The country’s policymakers are nurturing a domestic alternative-energy industry on a massive scale. China is home to more than 100 wind-turbine manufacturers and some 400 solar-panel companies. The country has quickly grown into the world’s largest maker of photovoltaic cells. Yet more than 95% of PV cells produced by China in 2008 were exported, indicating the country’s output far exceeds domestic demand. Not surprisingly, foreign companies think they are being blocked from the mainland market.
Meanwhile, China Daily reports on overcapacity in the solar power industry in China.