China unveils 2011-2015 plan for renewable energy

China is to launch quota and trading systems to ensure the effective investment, grid connection, transmission, and utilization of the electricity generated from renewable energy sources.

Some of the related sectors, particularly power equipment manufacturing for renewable energy, would be boosted by the development plan, industry observers noted.

China to give greater shape to renewable energy industry Under the development plan, China’s wind power installed capacity is to reach 100 GW by the end of 2015, with annual electricity output of 190 billion kWh, while solar power installed capacity is likely to hit 15 GW, with annual electricity output of 20 billion kWh.

Industry observers noted that the planned target revealed the government’s further commitment to support the development of renewable energy industry, thus lifting the prospects for the further development of those sub-industries listed in the plan.

For the solar photovoltaic (PV) sector, where most of the Chinese majors have suffered substantial losses, particularly in the third quarter of 2011, China is to further refine favorable policies as well as regulations to give greater support to the industrial chain, from upstream to downstream.

For example, in the short term, China will further develop solar technology and demonstration projects to meet the specific needs of some regions in the west China that are rich in resources.

Meanwhile, China is planning to implement more policies favoring solar PV power generation, and to promote the development of distributed solar PV power generation during 2011-2015.

For wind power industry, China is to tighten up control upon wind power development, to raise technological and quality standards as access thresholds into wind power industry, and to develop wind power projects according to schedule, according to the five-year plan.

As for hydropower, with some 200 GW of hydropower under development in 2010, greater efforts are to be made to improve water resource planning and environmental protection issues around the construction of hydropower projects during 2011-2015.

Meanwhile, China will also put more efforts into biomass energy development in order to reduce the uses of traditional energy sources, especially liquid fuels, which are usually regarded as higher carbon-emission way of energy consumption.

The increased power generation target set for each type of renewable energy and the updated regulations will help China’s renewable energy industry, particularly solar power and wind power, to rebalance from the overcapacity achieved during 2006-2010 towards a more rational growth that focuses more on industrial structure as well as product quality in 2011-2015, according to Cui Rongqiang, director of the Solar Energy Institute of Shanghai Jiao Tong University.

China to implement power quota system China will continue to formulate and polish policies in a bid to break bottlenecks of the renewable energy development, according to Shi Lishan, deputy director of the New and Renewable Energy Department of the National Energy Administration (NEA). In particular, the NEA is mulling over launching quota and trading systems for renewable energy such as wind power and solar power to solve the problems of grid connection that have been a headache for years.

The framework of the quota system has been completed and is likely to be implemented in 2012, according to an earlier report by Economic Information Daily.

The quota system is to set the tone for prioritized connection and purchase of the electricity generated from renewable energy sources, thus ensuring the investment, grid connection, transmission, and utilization of the electricity generated from renewable energy sources to pay off, notes the report.

It is estimated that the upcoming quota system could either require power grid companies to give access to renewable energy at a certain rate of their capacity, or require power plants to use a certain amount of renewable energy as their energy sources.

Meanwhile, the power grid can also give access to power generated from waste heat and cogeneration to comprehensively utilize energy sources in a more efficient way, according to Zhou Dadi, an expert with the Energy Research Institute under the National Development and Reform Commission (NDRC).

Even greater opportunities for power equipment industry The plan also puts up to establish 200 green energy demonstration counties by 2015 in a bid to promote renewable energy utilization in rural areas.

Industry observers noted that the increased power generation target and demonstration projects would drive up the demand for power equipment, which would create great opportunities for relevant manufacturing companies.

China’s electricity generated from solar power has reached 15 GW currently, with an annual growth of 3 to 5 GW.

In addition, China’s wind turbine installed capacity is estimated to reach 100 GW by 2015 with an annual growth of 11 to 16 GW, according to Wang Haisheng, an industry analyst with Huatai United Securities.

Compared to a growth of 18.9 GW in 2010, it is estimated that there would be a slowdown in the growth of China’s wind turbine capacity in future.

China would redirect wind power development towards product quality and electricity generation instead of speed and installed capacity, noted Liu Qi, Deputy Director of the NEA.

The stabilized growth of China’s wind power installed capacity as well as the upcoming quota system for renewable energies make clear statements that China will put more effort in connecting electricity generated from renewable energy sources such as solar power and wind power to the power grid, which will lead to greater demand for grid connection facilities and equipment, according to Wang Haisheng.

Solar power and wind energy plant operators were also expected to benefit from the plan, Wang noted.