The conventional environmental view of the BRIC developing economies in general and China in particular equates high growth with high pollution. However, while coal-fired power stations are China’s main source of energy, and the country is famously said to be building one new coal-fired plant a week, in February this year, according to a Bloomberg report, China overtook the US to become the world’s largest market for wind energy.
China is determined to address its huge carbon footprint and has an absolutely massive, multi billion yuan ongoing programme of alternative energy development, including wind, hydro and solar projects. The Chinese Government is committed to getting at least 15% of its 800 to 900 GW total energy requirement from wind energy by 2020.
Some idea of the scale of activities in this sector can be gathered from the fact that in May this year, China’s largest power producer, the Huaneng Group, signed up to buy 8.06 billion yuan ($1.2 billion) of wind energy from a cluster of local wind generation companies, including Sinovel Wind Group, Shanghai Electric Group, Dongfang Electric Corp, China Shipbuilding Industry Corp, China Shipbuilding Industry Corp and Zhejiang Machinery and Electrical Group. Each of these will be providing the Huaneng Group with some 300Mw of wind energy.
The article in Business Green cited figures from the energy analyst New Energy Finance, which showed that investment in renewable energy sources in China exceeded $6 billion in the first quarter of 2010.
The sector is also proving a fertile source of deal making and initial public offerings (IPOs) as companies scramble to take advantage of the opportunities emerging in China’s alternative energy market, now that it has solid support from the State. At the end of December 2009 China Longyuan Power Group Corporation, the country’s largest wind-power producer raised $2.26 billion in an IPO on the Hong Kong Exchange, in the world’s third largest IPO by an alternative energy company (source: Bloomberg). The world’s largest alternative energy IPO was back in December 2007, when Iberdrola Renovables SA, the renewable energy unit of Spain’s largest power utility raised $6.6 billion. The second largest was the IPO of EDP Renovaveis, the renewable energy unit of Portugal’s largest power company, which raised $2.4 billion.
Solar power too, is getting substantial backing. On July 7, the Chinese Government requested tenders for the development of 13 solar power projects in six Western provinces. The total solar power output being sought is 280Mw. This follows the country’s first set of tenders for a 10 Mw solar power installation in Dunhuang, in Gansu province in 2009. According to an interview by Zhang Guobao, head of the National Energy Administration, given to the China Daily back in May, the country is aiming for an installed capacity of 20 gigawatts of solar power by 2020 to supplement 100 gigawatts of wind power, which it hopes to have installed by 2020. China recently brought in legislation which means that regional power companies are now under a compulsion to by any renewable energy that is available to them.Further reading on global environmental issues and the Chinese economy:
- CSR: More than PR, Pursuing Competitive Advantage in the Long Run, by John Surdyk
- Why the World Needs a Green New Deal, by Achim Steiner and Pavan Sukhdev
- Global Ambitions—China’s Big Banks, by Sir John Stuttard
- Economic Ebb and Flow, a World of Challenges and Opportunities, by Hamish McRae
Tags: alternative energy , China , green energy , power producers , solar energy , wind energy