The government in Beijing has set itself high goals in a bid to expand domestic green industries
The government will boost funding to encourage the growth of its green R&D industries. (Source: Suntech)
China’s State Council has released a report this week detailing the government’s plans to invest in its green industry to boost its economy.
The country is looking to “upgrade” its economy [which] “is an important and urgent task”, according to the report.
China vowed in an industrial development plan last year that it will raise the total output value of environmental protection industries to 4.5 trillion yuan (US$729.7 billion) by 2015, or on average a 15% yearly increase.
The world’s biggest emitter of carbon-dioxide is looking to “achieve sustainable economic development and ensure a comprehensive well-off society by 2020.”
Chris Evans from industry advisers the Rolton Group told RTCC: “The information which the Chinese release on targets, connectivity, costs, etc. can be interpreted in varying ways, we would therefore not want to categorically state that their intentions will or will not meet their targets.
“What we can glean is they have spent between 2004-2012 US$257 billion dollars on renewables.”
With China’s recent involvement in various trade cases it has closed the door somewhat on its export industry. The government is intending to invest in its domestic market, expanding its research and development for renewable energy.
Capacity
In June the government announced plans to more than quadruple its solar capacity to 35GW by 2015, which will involve adding around 10GW per year from 2013-2015, as smog reached record levels in Beijing this year. For renewables, China announced an investment of 1.8 trillion yuan (US$294 billion) over five years until 2015.
“Currently we understand that they spent US$66.6 billion in 2012 on renewables, if you add 15% to this per annum then this takes their annual spend up to US$97 billion by 2015,” said Evans.
“But will this increase give them what they need, particularly when we compare their CO2 emission increase on average has been typically 7.5% per annum since 2005 according to the EIA, no doubt retarding the total effect of the 15% renewable cost increase?”
The following month, the government announced it will release its airborne pollution prevention and control action plan, backed by 1.7 trillion yuan in investment from the central government, by 2014.
For renewable energy in general, the government is proffering 1.8 trillion yuan (US$294 billion) over the five years until 2015, a senior official said in July.
Infrastructure
Evans also raised the point that without a robust electricity infrastructure for renewable energy, the amount of money spent is irrelevant.
“Some intrinsic infrastructure issues may also impact the effectiveness of renewable integration,” said Evans.
“For example the Chinese also have had significant problems in infrastructure connectivity for renewables, which they have been trying to improve upon since 2010 when they targeted grid issues, cross province subsidies and guaranteed off take agreements, before then they had invested in many renewable solutions including wind turbines – but some weren’t even connected to the grid.”
In terms of specific policy measures, the central government will direct its budget to developing more efficient boilers, investing in its motor industry to produce cleaner vehicles, controlling air pollution and recycling.
Evans said: I think they’ve some very good aspirations, but to actually hit their target of 20% of renewable energy (excluding hydro and nuclear) by 2020 could be difficult, particularly as their demands are constantly increasing.
“Alternatively if they increase hydro and nuclear, which are significant percentage of their overall generation, then they could meet the needs of their targets. It should be borne in mind however that China’s coal fired power stations are more efficient than the United States and it may not be long before China is the largest consumer of renewable solutions in the world.”