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ePaper created 2014-12-05, 16:31:30 | version 1.33.01
26 CHINA n GENERAL OVERVIEW Over the past decade, China has established itself as the global renewable energy champion: double-digit economic growth rates, rapidly increasing energy demand and the establishment of the largest wind industry globally. Between 2004 and 2010 China managed to double each year its newly installed capac- ity for wind, achieving an average annual market growth of well above 15,000 MW. Increased air quality problems due to the large expansion of the coal industry over the same time period drove even a faster deployment of renewable energies. In addi- tion to wind, China has the largest expansion of hydropower in the world. During the second half of the past decade, solar PV production capacities were developed and which in 2013 repre- sented well over half of the world’s production capacities for solar PV and about one third of the global annual PV market. n MAIN DRIVERS FOR RENEWABLES The expansion of the renewable energy industry is of strategic national importance in the context of upgrading its existing industrial infrastructure and is recognised as an important sector for the creation of future value-added jobs. Meeting the demand of surging export markets for renewable energy technologies— mainly solar PV—was a major driver for the Chinese government. Diversification of the energy supply and security of supply both play an important role. Air pollution, in particular across Eastern China, has recently emerged as an important driver for new renewable energy expansion plans in that region. An equally important driver is the need to foster decentralised/distributed power generation capacities to avoid the enormous financial expenditures associated with relying entirely on long-distance transmission lines, which otherwise would have to transmit power generated in West China to East China. n RENEWABLE ENERGY POLICY DEVELOPMENT Between 2004 and 2006, a renewable energy law—based closely on the German Renewable Energy Sources—was devel- oped. Since its entry into force in January 2006, the renewable energy legislation has been constantly changed and adapted to reflect the realities of the market while minimising any disrup- tive impact on the domestic renewable energy market. Initially the FIT focused on the wind industry but expanded in 2011: the solar PV industry was added to the political roadmap and quickly became another strategic technology under development. In the beginning, solar PV support programmes used tendering schemes for utility-scale projects and capital subsidies. Due to major problems and a low deployment rate, solar PV, in July 2011, received a feed-in tariff, which helped the solar market become as dynamic as the wind market. Technology targets for wind and solar were established under the 11th Five-Year Plan (2006 – 2010), the 12th Five-Year Plan (2011 – 2015), and most recently in the “Air Pollution Prevention Plan 2014 – 2017” released by the National Development and Reform Commission (NDRC) in June 2014. n DEPLOYMENT OF RENEWABLES The economically exploitable hydropower potential in China is estimated to be 402 GW. To date, 280 GW have been installed with an average annual expansion rate of around 20 GW. Given the anticipated energy consumption of the country new renew- able energy technologies such as wind and solar PV in the power sector and solar water heating play (and will play) an increasingly important role. Between 2004 and 2014 90 GW of wind and 20 GW of solar PV were installed. While the solar photovoltaic industry is generally privately owned, public and private entities, including the five biggest utilities in China, are actively involved in the development of utility-scale solar PV power plants. Similarly, large-scale wind farms are primarily developed by public entities. n MILESTONES OF THE PAST DECADE The Renewables2004 conference in Bonn, June 2004 was widely seen as the “kick-off event” for China’s new renewable energy programmes for wind and solar PV. Activities undertaken after the event led to China’s commitment for a domestic renewable energy law as well as the establishment of a renewable energy development fund. In the beginning, “pico-hydro”, small scale wind and solar PV formed the basis for decentralised projects. On January 1, 2006, China’s renewable energy law came into force and kick-started the breath-taking development of China’s wind, and later solar PV industries. The establishment of the China National Renewable Energy Centre—developed in close cooperation with Denmark—is another national milestone. This national institution assists China’s energy authorities in renewable energy policy research and industry policy development. The Initial Public Offering (IPO) of Suntech in 2005 on the New York Wall Street Stock Exchange marked the beginning of China’s solar PV-orientated export industry. The rapidly expanding manufacturing capacity of solar equipment fed global demand; ironically domestic use of solar PV was low until 2010. China’s important role. Between 2004 and 201490 GW of wind and