A draft amendment to the renewable energy law was submitted for first reading to the Standing Committee of the National People’s Congress (NPC), in a bid to remove the power transmission bottleneck that hinders industrial development.
The draft requires related ministries to map out concrete plans for meeting the country’s medium- and long-term renewable energy targets, which should be based on the overall national energy strategy and available technologies.
"The country’s power grid development plan is falling behind that of the renewable energy, becoming a major block for reaching the country’s renewable energy target," said Wang Guangtao, director of the NPC’s environment and resource protection committee.
For instance, areas rich in wind power resources are mainly concentrated in the remote northwest, northeast and southeast, where the power transmission network is poorly constructed, Wang said.
Coal-dependent China plans to generate at least 15 percent of its energy capacity from wind, solar and other renewable energy sources by 2020.
Chief policy makers said they are revising earlier targets to create a "greener" environment, adding that new jobs to support the new energy sources also would spur economic growth.
Xie Zhenhua, vice-minister in charge of climate change policy for the National Development and Reform Commission (NDRC), said last week that renewable energy is expected to account for 10 percent of the country’s energy resources by 2010 and 15 percent by 2020.
Zhang Xiaoqiang, the NDRC’s vice-minister in charge of international cooperation, was more ambitious. Zhang said recently that China could reach a renewable energy target of at least 18 percent by 2020.
"Personally, I think we could reach the target of having renewable sources make up 20 percent of total energy consumption," Zhang recently told the media in London.
Sun Qin, deputy director of the National Energy Administration, told China Business Weekly that China would soon announce the revised power supply capacity target for 2020 — a target that might increase to 1,400 to 1,500 gigawatts, or GW, of energy.
The revised target, if approved by the central government, would represent nearly a 50 percent increase from the previous goal set by the government in 2007. In 2007, the central government had approved plans to develop 1,000 GW in installed energy capacity by 2020.
This year, China’s power capacity will surpass 900 GW and will soon be on par with the United States, which now has 1,000 GW in energy-generating capacity.
Zhang said China would restructure its electricity supply mix by supporting more investments in nuclear, solar, wind and biomass energy resources.
In line with the revised target, the ratio of nuclear power to the combined installed electricity capacity would increase to 5 percent in 2020 — up from 2 percent in 2008.
Sun of the National Energy Administration said China’s installed nuclear power capacity target would increase to 60 GW to 75 GW by 2020, up from the previous target of 40 GW approved two years ago.
Sun did not discuss the specific 2020 targets for wind, solar and biomass power.
On solar power, the NDRC’s Energy Research Institute reported that China’s 2020 target would be expanded from 1,800 megawatts (MW) of installed solar capacity established in 2007 to 10,000 MW or more.
At the end of 2008, solar power capacity attached to the grid was less than 100 MW, or 0.01 percent, of China’s installed capacity.
Even with a tenfold increase in the 2020 target, solar energy would play a much smaller part in China’s overall power mix than other energy sources.
Under the 2007 plan, biomass and wind were set to reach a generating capacity of 30,000 MW by 2020, with nuclear power expected to reach 40,000 MW.
Xiao Ziniu, director of the National Climate Center, said China’s onshore wind power potential has been evaluated at 700 GW to 1,200 GW. China has another 250 GW of potential offshore wind power capacity, the center reported.
Some regions have been identified as rich in potential wind power resources. For example, the Xinjiang Uygur autonomous region was estimated to have more than 100 GW of wind power generating potential.
Plans are being considered to develop mega wind power farms with the potential to each generate more than 10 GW. "We have great renewable resources to explore," Xiao said.
China has set a target for renewable energy consumption of 40 percent of the market by the year 2050.
The news comes as it emerges that China will have 100 GW of wind power capacity by 2020, more than three times the 30 GW the government set as a target 18 months ago.
It’s also been revealed that China will become the biggest growth market for wind power generating capacity this year, ahead of the United States, which has been worse-hit by the economic downturn, according to the Global Wind Energy Council (GWEC).
China is the fourth largest producer of wind power after the United States, Germany and Spain.
The annual growth rate in wind power in China will be about 20 percent, Fang Junshi, head of the coal department of the National Energy Administration, told a Coaltrans conference in Beijing.
China, the world’s second largest energy user, has around 12 GW of wind power capacity and has said it wants to raise that to around 20 GW by next year. That means wind is set to be a bigger source of power than nuclear, despite a construction boom in nuclear power plants, and far bigger than solar, which is expected to hit 1.8 GW by 2020, according to a 2007 plan.
More than 27 GW of wind power generating plants worth about $53 billion were built around the world last year. Demand for power in China has been spurred by economic stimulus measures.
"China is powering ahead with no visible signs of slowing down," said Steve Sawyer of the Brussels-based GWEC. "If anything it is accelerating. They intend to become the largest market in the world, very clearly, and they probably will unless things take off in the US again in the relatively near term."
China’s local wind turbine manufacturing industry has "grown dramatically" as power production has expanded, Sawyer said. Local manufacturers, dominated by Sinovel Wind Co, Xinjiang Goldwind Science & Technology Co and Dongfang Electric Corp, captured more than half the domestic market for the first time in 2007, rising to between 75 percent and 80 percent last year.
"Although all the big international brands are there and their markets are growing in absolute terms, their market share is diminishing pretty rapidly," Sawyer said.
The growth in Chinese wind turbine manufacturing means Chinese-made equipment is poised to emerge in the international wind market "in earnest", Sawyer said.
Until now, Chinese suppliers have only won smaller contracts in the US, Cuba, Peru, Africa and the Middle East, he said.
Danish company Vestas, the world’s largest wind turbine maker, plans to invest $9 million in its factory in Inner Mongolia to produce about 800 sets of V60-turbines every year. These turbines are specially tailored for Inner Mongolia’s low to medium strength winds, being shorter with bigger blades than standard turbines. The factory will employ an additional 1,000 Chinese people, about half of its current local employees.
The company, which entered the Chinese market in 1986, has a market share of about 12 percent. This pales in comparison with local competitors such as Sinovel, Goldwind and DEC, which took about 65 percent of market share in 2008, according to Shi Pengfei, vice-president of the China Wind Energy Association.
The World Wind Energy Report 2008 predicts that Asia, under China’s lead, will "become the worldwide locomotive for the wind industry" and "Chinese wind turbine manufacturers will be among the top international suppliers".
Wang Jun, director of the National Energy Administration’s renewable energy department, said: "Renewable energy will become the mainstream power supply in 2050 from a supplementary role in 2010." He envisaged a future with heating dependent on solar and geothermal power, cars driven using biofuels and families owning their own photovoltaic power stations, turning the country from the world’s biggest emitter of greenhouse gases to one of its smallest.
However, some are worried that too much attention and aid is being paid to the renewable energy industry. They argue China should focus on clean coal technology.
"Renewable energy is our destiny, but it is not the solution to China’s urgent problem of large-scale coal burning," said Feng Xiaoting, director of Jiangsu Coal Chemical Engineering Institute.
He said he believes that in the next 30 to 40 years, traditional energy, especially coal, will still be the powerhouse for China’s growth. He said clean coal technology research and development should be prioritized.
But the scale of renewable energies is over-expanding in some areas despite the lack of necessary infrastructure to collect the electricity.
More than 20 percent of the country’s wind power machines did not generate any electricity last year because the equipment was not yet connected to the grid, according to officials from the China Wind Energy Association. The draft law also stipulates the setting of a nationwide annual purchase quota for renewable energy sources to protect the interests of renewable energy enterprises.
The renewable energy law orders power grid operators to purchase resources from registered renewable energy producers within their domains. But some grid companies failed to abide by the law.
"The electricity supply from renewable energies is not as stable as the supply from traditional coal-fired power plants," said Yang Lei, chairman of Vantage Point Venture Partners. "This makes power grid companies reluctant to collect electricity from such sources."
Wind power, for example, is affected by sudden surges or falls in electricity caused by unstable wind conditions. This leads to strong fluctuations to power grids, and may even cause damage, Yang said.
The draft legislation will help and protect renewable energy producers, but the challenges that power grid companies face have not yet been tackled, Yang said. Technology breakthroughs are required to fix this problem, Yang said.
The draft amendment also calls for China to set up a government fund to support research and development of renewable energy-related technologies and a smart power grid system.
Last month, China’s lawmakers revised some target dates, mandating at least 15 percent of its energy capacity be generated from wind, solar and other renewable energy sources by 2020.
Guangzhou will highlight the development of solar energy, heat pump technology, hydropower, wind power, biomass energy and alternative energy for public communication in its new energy and renewable energy development plan, released in late July. Guangzhou is the first city in China to have issued such an energy development plan.
The city will encourage foreign investors in new energy power generation projects while developing the equipment manufacturing industry for the new energy sector, according to the Guangdong provincial development and reform commission.
The new energy plan for Guangdong province also will be released soon, hopefully within this year, said Li Miaojuan, director of the provincial development and reform commission, at a recent international energy forum in Guangzhou.