The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Renewable Energy Recap: China

Developers, manufacturers, investors and other renewable energy industry stakeholders need to know where the next big market is going to be so that they can adjust their business decisions accordingly.

Since 2003, global consultancy Ernst & Young has released its Country Attractiveness Indices, which gives a numerical ranking to 30 global renewable energy markets by scoring renewable energy investment strategies and resource availability. The indices are updated on a quarterly basis and the most recent report can be found here.

Here is the firm’s assessment of China.

General

While there are signs that the rapid pace of China's broad economic growth appears to be slowing to a more sustainable level, there is no doubt that the country remains committed to the ongoing development of its renewable energy sector. Despite this, Q3 has been a relatively quiet period in terms of policy announcements or significant news items relating to the country's renewables market. Rather, the quarter has been dominated by the accusations of US politicians and solar panel  manufacturers that China's solar subsidies represent a violation of global trade rules.

Solar

The collapse in August/September of a number of high-profileUS solar manufacturers has renewed demands from US lawmakers and union leaders that the Obama Administration pursue unfair trade complaints against China for its policy of awarding “anti-competitive” subsidies to support the growth of its solar sector. 

According to the US Energy Department, China provided around US$30b (€22b) in credit to its biggest solar manufacturers last year, about 20 times the U.S. effort. A new report by S&P acknowledges that Chinese solar companies have been able to use cheap debt, often interest-free, to achieve economies of scale, offer extended credit terms and to gain market share. This has resulted in significant oversupply in the global market, an estimated 30 GW in 2011 compared with expected demand of 15-20 GW, which has in turn pushed down the price of solar power at an astonishing rate. 

Just days after the bankruptcy of Solyndra Solyndra , Oregon Senator Oregon Senator ,Ron Wyden sent a letter to President Obama accusing China of “dumping” solar panels on the US market. In the first seven months of this year, China shipped US$1.4b (€1.0b) of solar panels to the US, according to US International Trade Commission data. Wyden is calling for the Department of Commerce to launch an investigation on whether to impose a trade tariff on Chinese modules, and pursue a case against China at the World Trade Organization (WTO).

No formal action has yet been taken by the Obama Administration, and the outcome is by no means a foregone conclusion. The Solar Energy Industries Association, a US trade group, has attributed Solyndra's bankruptcy to the harsh realities of a maturing industry in a competitive marketplace. The less than conventional cylindrical PV panel produced by the failed manufacturer has also been blamed for its downfall. Inevitably, fierce competition from Chinese manufacturers has played a role in driving down costs and therefore putting pressure on competing companies around the world. The question is now, therefore, whether China has in fact provided its domestic companies with an unfair advantage resulting in the unjust downfall of U.S. manufacturers, or whether US policymakers and industry players are conveniently ignoring other technologies and market-based factors. China should wait and see what challenge it will actually face.

It was not all bad news for China’s solar sector in Q3. In a bid to stimulate its domestic manufacturing market during the current global slowdown in demand, the country is turning its attention to Africa, its fifth-biggest export market for PV products, as a area of future growth. China hopes to take advantage of the regions' growing focus on alternative energy to help overcome power shortages, which in turn could open new markets for the solar-power products. China has already confirmed it will start construction of six solar projects in Africa this year.

Wind

China undoubtedly remains the global leader in respect of wind power. However, in a bid to prevent growth in the sector becoming unmanageable, particularly with reference to a struggling grid infrastructure, the country has tightened its wind power approvals process. In order to qualify for government subsidies for power tariffs from the Renewable Energy Development Fund, the construction of all new wind farms will need to be endorsed by the NEA in Beijing. Such endorsement will then allow provincial governments to approveprojects, and also make them eligible for connection to the local grid. 

The change comes in response to the build up of excess capacity under previous rules, whereby provincial governments had the right to approve wind farms up to 50 MW. The inadequate grid infrastructure has been unable to deal with the flood of requests for new connections and resulted in a large proportion of China’s impressive wind portfolio not actually generating power. It is hoped that the new rules will allow wind installations and grid connection requests to be monitored more centrally, enabling more sustainable growth in the sector. 

As a result, there is set to be a slowdown in wind turbine installations of up to 20% over the coming year, causing turbine manufactures to exit the domestic market, or look more toward export markets. One such company that is already planning on leaving the domestic market is Germany’s REpower, which is looking to sell its majority stake in a turbine factory in Inner Mongolia.

For more information on renewable energy development in China, contact the report’s authors Ivan Tong and Ben Warren.

Untitled Document

RELATED ARTICLES

Solar power growth impacting UK electricity sector

Diarmaid Williams

Q2 of 2015 saw a large increase in the generation of electricity from solar PV in the UK, with the growth having a significant impact on electricity market prices and other supply factors.

PACE Finance Opening Doors for C&I Solar In California

Susan Kraemer, Correspondent With its excellent renewable policy, California leads the nation in solar. Over the years both the Renewable Portfolio Standard and the California Solar Initiative drove utility scale and residential solar deployment. But w...

US Clean Power Plan Could Include Carbon Trading

Mark Drajem, Bloomberg Some businesses that back President Barack Obama’s plan to curb greenhouse gases are making a late lobbying push to add an element similar to a cap-and-trade program. With the administration set this week or next to unveil ...

Why the Future of the Yieldco Is at Risk

Haresh Patel In the past two years, the proliferation of YieldCos, and their ability to open new sources of capital for renewable energy projects, has captured the attention of the energy industry. While a YieldCo’s potential to catalyz...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

GRC Workshop at Indonesian International Geothermal Convention & Ex...

The Geothermal Conceptual Model & Well Targeting The Geothermal Me...

Grid-connected and Off-grid Photovoltaics

This training covers all aspects of planning, installation, maintenance,...

COMPANY BLOGS

Do Your Goals Match Your Values?

Before you set goals for your company or your personal work performance ...

LSX rises with sustainable wine making in Mexico

his custom LSX solar canopy shades the upper deck organic gard...

A Networking Story

When you’re at a networking event and you meet someone who works i...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS