Protectionism clouds over wind energy and solar power

China’s new energy industry faces an unprecedented challenge because of the United States’ anti-dumping and anti-subsidy investigations against Chinese wind power and solar energy products.

So China will need a “green revolution” in its traditional energy sector to reach its energy conservation target and achieve sustainable development.

In May, the US Department of Commerce imposed preliminary duties of 31.14-249.96 percent – up from 4.73 percent – on China-made solar panels and cells. The European Union could well follow suit. On July 24, German company SolarWorld AG filed a petition with the EU requesting that anti-dumping investigations be started against solar products imported from China.

The EU, the largest market for Chinese solar products, will decide in September whether or not to impose punitive tariffs on Chinese solar panels. If it does, it will be disastrous for China’s photovoltaic industry, which is already reeling from a sharp drop in demand. The debt crisis in Europe has led to a sharp decline in the demand for Chinese solar panels, and many domestic photovoltaic companies are on the verge of bankruptcy.

According to investment bank Maxim Group’s latest report, LDK Solar Co, the world’s top solar wafer producer based in Jiangxi province, reported a loss of $185 million just in the first quarter of 2012.

China’s photovoltaic industry is hoping to cash in on the promising prospects in domestic and overseas markets, such as India and Brazil. But the threat of the EU imposing excessive tariffs on Chinese photovoltaic products could make its outlook bleak.

Zhou Fengqi, former director of Energy Research Institute of the National Development and Reform Commission, said that in the next five years the world’s renewable energy production is expected to grow at an average annual rate of 7 percent, five times that of the traditional fossil fuel sector. Even then the proportion of renewable energy in the overall energy mix will remain low.

It’s good to see that traditional energy companies are focusing on environmental protection and carbon emission reduction, and thus preparing the ground for a “green revolution” in the fossil energy industry.

Ren Xiangkun, deputy director of the coal-to-liquid and chemical sector of the Shenhua Group, said new energy will not replace traditional fossil energy if its production increases gradually.

Ren’s company, based in the Inner Mongolia autonomous region, has been engaged in the development of the world’s first commercial coal liquefaction facility to transform coal into diesel and gasoline.

Therefore, it is important that traditional energy use becomes cleaner.

Coal remains the primary source of energy in China, and making its use cleaner through technological advancement is one of the priorities on the road to transforming the country’s economic development model and achieving sustainable development.

China will have to develop cleaner coal technologies if it is to reduce its greenhouse gas emission and meet its energy conservation target. For that, it has to upgrade the technologies for coal power generation, pollution control and cost-effective carbon dioxide capture and sequestration.