Remember the Beijing Olympics? A little more than a year ago the question driving the media cycle in the months and days leading to the games was the city’s endemic pollution and whether authorities would ever be able to provide some crucial clean air to the athletes competing there. So, what did Chinese authorities do? Simple, they shut down the polluting factories for the duration of the games. An impressive feat, only possible in a single party state like China.
But the move was just a bandaid solution. Now, China, one of the world’s largest consumers and producers of coal, is taking a more long-term approach to resolving its “CO2 problem.” On the policy side, it has been talking to the world’s other energy guzzler, the U.S., to work together on climate change issues. On the investment side, in the wake of the global economic crisis, China’s announced a mega $220 billion green-focused stimulus package to prop up wind and solar generation.
Last year, according to the American Wind Energy Association, China added some 6,300 megawatts in wind capacity. The International Energy Agency estimates the country needs to increase its total generation capacity by 800 gigawatts by 2030 to meet demand — roughly double its current capacity.
This is just a start. The much talked about China Greentech report, released last week, estimates that the country’s green energy market, which includes everything from wind and solar farms and battery-powered automobiles, could be worth between $500 billion and $1 trillion a year (yes, that’s per year!) by 2013.
The number is mouthwatering for many clean tech companies. A sliver of that pie could secure a comfortable bottom line for decades.
Already the country’s growing cleantech needs has lead to the creation of some homegrown champions like Yingli Solar. It’s also motivated key foreign players to invest there. Marlboro, Mass., EverGreen Solar is spending up to $20 million to finance the construction of a new 100 megawatt solar panel manufacturing facility in Wuhan, China, it will jointly operate with Jiawei Solar, a local company. And last week Tempe, Ariz. First Solar announced an MOU with the Chinese government to develop a 2 GW PV farm in the country’s remote Inner Mongolia region. We wrote about that here, impressed by the boldness of the plan, although there are some serious questions about whether First Solar can even execute this mammoth plan. Securing basic materials, including tellurium, on which it relies to build its low cost PV panels will be a major challenge for the company.
On China’s green aspiration, Environmental Capital’s Keith Johnson (quoting the greentech report) writes that the country’s heavy-handed approach offers obvious upsides and some downsides.
China Greentech Reports writes:
The benefits of China’s concentrated and state-dominated greentech markets are offset by poor incentives; lack of competition reduces efficiencies and innovation that come from open and competitive markets. The challenge for any nation, including China, is to know how and when to strike a balance between these two sides […]
Back to the Beijing Olympics. The government’s decision to just shut down the region’s polluters underscored the upside of that top-hand approach in implementing high impact, short-term policies. However, it probably won’t work to implement a long-term transformative energy policy. At least, that is if China is able to fuel its own innovation based on the intellectual property of outside investors, who are likely to be willing to share proprietary technology for a piece of China’s huge green pie.
One of the most pressing questions in the green energy revolution (if indeed it is at hand) is, who’s going to be making money from the rush toward sustainability?
