China leads in renewable energy

In many ways, the year 2010 could very well be dubbed the 'year of renewable energy' as the world's biggest consumers of fossil fuel including the US, China, and Europe scrambled onto the bandwagon to break the energy cost barrier of producing electricity from renewable sources that is friendly to the environment. The figures are in. Investments into solar power and wind, biomass and geothermal continued their stupendous growth throughout 2010. Helped by government-backed stimulus packages across the developed countries, around US$211 billion dollars were poured into the sector. Of this, China alone witnessed some $49 billion in new investments. This was achievable due to advancements in large-scale wind farming in China and small-scale rooftop photo voltaic (PV) installation in Europe. For the first time, developing countries overtook developed economies in terms of attracting new investments. By 2010 China was leading the world with its $48 billion (an increase of 28 per cent over the preceding year) in new investments in renewable energy. Such heavy-duty investments are paying off. According to Bloomberg New Energy Finance, the price of PV modules per megawatt has come down by an average of 60 per cent since 2008 and for the first time has put solar energy on a competitive footing with the retail price of electricity in a number of sunny countries. Putting all this in perspective, China managed to attract the highest new financial investments for two years in a row with $49 billion in renewables, i.e. about a third of total global investments. A high rise in asset finance was made possible due to China's massive growth in wind capacity. The year 2010 saw China adding a mammoth 17 giga-watts or, 17,000 megawatts of new energy from renewable sources. Today, China has the largest wind capacity in the world that is ten times the capacity of Denmark, a country that largely pioneered wind turbine energy farming. With the developed countries reeling under the pressure of a continued financial crisis including the euro zone meltdown, Chinese growth rates have profited from the $46 billion 'green stimulus package launched during the period. Like wind, China's solar manufacturers have largely benefited from large government debt financing deals. Indeed, the government in China have extended loan guarantees worth $32.5 billion to 10 top manufacturers and today China as a whole, manufactures over half of the PV modules used both locally and internationally. Such bold steps in renewable energy are in fact in line with current Chinese energy policies that dictate non-carbon energy making up 15 per cent of the country's energy production by the 2020. Although prior to the Fukshima meltdown, nuclear energy figured a key element in ensuring China's energy needs, the government has been forced, at least partially, to rethink the idea after the Japanese meltdown. Regardless of the Japanese experience, nuclear energy will in the foreseeable future form an important part in meeting the country's energy needs. Nonetheless, China is forging ahead with non-fossil energy sources in an era of growing interest worldwide in 'clean' energy sources. This thinking can in part be attributed to the continued volatility in the crude oil markets due to uncertainty in the Middle-east. China has set for itself ambitious goals to reduce greenhouse gas emissions in its latest twelfth Five-Year Plan (2011 - 2015). China believes that part of the answer to the riddle lies in developing renewable energies and technology for more efficient energy consumption. Advancing renewable energy has two distinct advantages. First, it can help reduce greenhouse gases and second, it fosters the development of Chinese industry. With tensions rising among contending neighbours, particularly over unexplored natural resources in the South China Sea and the Bay of Bengal, a steady move towards renewable energy could help China mitigate a lot of these anxieties. Producing 45 per cent of all wind turbines and nearly 55 per cent of the global output for solar PV panels, China finds itself in a unique position. Already, the country is a leader in solar panel sales in Europe. Although energy from renewable sources is still viewed as somewhat of a niche market by a section of investors, media and mainstream political parties, the perception can be termed out of touch with reality, particularly in view of investment figures in 2010. Looking at it from another angle, new investment in renewable energy of $211 billion was up 32 per cent on 2009 levels, and nearly seven times the figure for 2004, just six years earlier. Despite such impressive figures, according to the World Economic Outlook April, 2011 database, the gross investment in renewable energy in 2010 makes up slightly over one sixth of total investment in all energy standing at $1.2 trillion. The downsides for climate-induced changes have reached a point where developed nations have started taking 'green' technology seriously. This view is reinforced by the fact that the number of countries having some type of renewable energy policy or support policy has doubled from an estimated 55 in early 2005 to 119 in early 2011. What is of interest is that the movement towards renewable energy has come mostly from developing nations in Africa, southern Asia and parts of Latin America where there exists the urgent need to scale up power capacity as a means of addressing energy access needs. The off-grid application of renewable technology makes it perfect for developing nations. It is also much more cost effective to establish than fossil fuel alternatives such as gas transmission lines that are not only exorbitantly expensive, but also time consuming. This goes a long way in explaining why some 30,000 solar-home systems are being sold in Bangladesh every month, why an estimated 40 million bio-gas cookers have been installed in China, 4 million in India and 100,000 in Vietnam by 2011 and why some 8,000 solar powered pumps in India are being used for irrigation. Email: mansur_hashim@hotmail.com