American companies are being squeezed out of the lucrative Chinese wind-power market at the same time as Dallas-based investors are bringing Chinese firms to the US via a big wind farm project in Texas, according to a new industry report. PES examines a potentially-damaging situation.
The study examines Chinese government policies promoting the development of industries producing equipment for generating electric power from renewable energy sources (hydro, wind, biomass, solar) to serve electrical grids. Those policies are transforming China into a major production base for renewable energy equipment at the watershed moment at which total global investments in renewable energy power capacity have surpassed investment in fossil fuel power capacity, the report claims. China’s rapid economic growth and urbanization has been paralleled by rising energy consumption with the country now second only to the US in total primary energy consumption.
It has also emerged as a larger generator of energy-generated CO2 emissions than the US and it faces a dilemma in that its indigenous reserves of oil and natural gas will be depleted within two decades at current rates of extraction, and coal, which accounts for about 75 per cent of China’s energy production, is a source of pollution and greenhouse gas emissions. Chinese planners are addressing this challenge, in significant part, through a dramatic national effort to promote the development of renewable energy as a larger percentage of China’s total energy consumption.
The task is complicated by the fact that the growth potential for hydropower, China’s principal source of renewable energy, is increasingly limited by environmental and social problems associated with the construction of large dams. As a result, the Chinese government is prioritizing the development of “new renewables” industries – wind, solar and biomass power. China imported much of the generating equipment used to construct its hydropower infrastructure, and until very recently the country relied heavily on foreign equipment and technology in the wind, solar and biomass sectors. However, Chinese planners have indicated their intention that eventually most or all of the renewable energy equipment installed in the country will be made there, will be based on Chinese-owned intellectual property, and will embody Chinese-developed standards.