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Raising the Bar and Then Raising it Again

Last week, it was announced that China's National Energy Administration is renewing and even upping its push for increased renewable energy in the country, as was put in place in the 12th Five Year Plan, the government's quinquennial roadmap for development from 2011 to 2015.

According to the administration, the combined capacity of grid-connected wind power in the nation will reach 55 GW by 2015. New wind power projects expected to come online this year include the second phase of a project in Jiuquan, Gansu province, with an annual capacity of 5 GW; a 2 GW project in Hami, Xinjiang province; a 2 GW project in Kailu, Inner Mongolia; a 1.5- GW wind project in Tongyu, Jilin province and a second 1-GW offshore project in Jiangsu province.

Over the next five years, China expects to add 15 GW of installed capacity of wind power each year, said Shi Pengfei, deputy director of the Chinese Wind Energy Association. In 2010, the country's installed capacity of wind power grew by 18 GW from the prior year to reach 42 GW, he added.  

Solar Power to Rival Three Gorges Dam

As for solar power, China will continue the development of solar photovoltaic (PV) power stations in the western part of the country during this year.  Plants under development have a combined capacity of 500 MW. Key projects including the solar power base in Qinghai province and solar thermal power demonstration projects in Inner Mongolia Autonomous Region. In addition, the country will accelerate the implementation of the "Golden Sun" program to support the construction of new energy demonstration cities.

Chinese Renewable Energy Society chairman Shi Dinghuan disclosed that total solar power generation is likely to be 1.5 times the amount generated by the Three Gorges Power Plant – the world’s largest hydropower station - over the next decade.

"The government will reset the goal for solar power generation for 2020, with total solar power generation, including solar thermal power, to be raised to between 20 GW and 30 GW by 2020, more than 10 times the amount in the previous plan," said Shi Dinghuan.

Why Push for More Renewables?

China is facing energy safety and pollution challenges resulting from its heavy dependence on fossil fuels. Coal and oil currently account for 69 percent and 20 percent of the country's primary energy consumption respectively, with clean energy sources, including nuclear, wind and solar power, accounting for only 7.6 percent.

 The renewable portfolio standards (RPS) set forth in the Medium-to-Long-term Program for Renewable Energy Development released two years ago calls for China to get 10 percent of its total energy from renewable sources by 2010, rising to 15 percent by 2020.

There are currently 10 solar PV cell manufactures that have an annual capacity exceeding 100 MW in China today, however the combined installed capacity of existing solar PV projects now reaches only 10 MW. Under the 12th Five Year Plan, the Chinese government will attempt to address the challenges of incorporating more PV onto the grid. The government will review tariff levels as well as the costs to physically connect to the grid that inhibit the growth of solar PV in the region.

A recent increase of those tariffs may help turn the energy providers that have long operated in the red into profitable operations. Lou Schwartz, contributor asked last summer how PV developers were able to maintain their businesses without turning a profit in “Chinese Firms Developing Solar Power Plants for Less Than 1 Yuan per kWh?”

During the 2011-2015 period, the Chinese government plans to use the carrot and the stick to enforce the policies, by not only offering subsidies, but by also putting in place punitive measures, to support the development of the renewable energy sector.

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