China has seen massive economic and technological growth in the last few decades, resulting in the billion inhabitants increasing the country’s energy demand by 15% a year. As President Obama alerted the US in the State of the Union address last week, China has entered the race for renewable energy and is vying for first place. In fact, China is currently spending 10 times as much on renewable energy than the US (based on a percentage of the GDP). China also plans to supply 15% of its energy by renewable resources by 2020. Despite the competitive race to be world leader in green energy, the US has teamed up with China on certain initiatives. In November 2009, the US and China announced several joint programs to stimulate research and development of green technology including hybrid electric cars, clean coal processes, and improving the efficiency of industrial buildings [DOE].
Strong evidence points to China succeeding in the world race for clean energy. In 2009, China was the largest wind turbine and solar panel manufacturer in the world. Also, the country’s wind energy capacity has doubled for each of the past four years. As extra incentive for renewable energy entrepreneurs, state banks are offering loans with interest as low at 2%. Moreover, China has already invested $45 billion dollars to improving the electric grid in 2009.
From these new policies and promises, it appears China will be the world leader in Green Energy in the very near future. Though things aren’t always what they seem. Yes, China has doubled its wind energy capacity every year for the past four years. However, almost a third of the wind generation plants are not yet connected to the grid. By law, state grid companies must purchase all power generated by renewable energy sources [China Environmental Law]. Historically this law has not been strictly enforced as grid upgrades are costly and the 0.4% renewable energy fee attached to each electricity bill is insufficient to cover these costs. Also, China includes both hydro-electric and nuclear power in the “renewable energy” category. An increase to 15% renewable energy by 2020 becomes highly comparable to the US level of 15.2% (renewable and nuclear energy) reported in 2007 [Annual Energy Review 2007].
So the question lies: Is China on track to be the world leader in Green Energy? Can the West, with our well established energy markets, be able to keep up?
Annual Energy Review – Energy Information Administration, Annual Energy Review 2007, Tables 1.3, 2.1b-2.1f and 10.3
China Environmental Law – http://www.chinaenvironmentallaw.com/2009/12/28/chinas-renewable-energy-law-amendments/
Yale Environment 360 – http://e360.yale.edu/content/feature.msp?id=2180