China could soon be experiencing an energy boom as its energy consumption increases at a time when it needs to meet greenhouse gas reduction targets, said a new report issued by Asia Pacific-focused consultancy firm Solidiance.
In its study entitled, “China Renewable Energy” released this week, it said that there are three key drivers behind the continued interest in renewable energy in China: its increasing demand for electricity; reduction in use of coal for energy production; and in cutting its carbon emissions.
The country’s demand for energy as well as its capabilities and capacity for energy production are now positioning China to seize the opportunity to take the lead in the development of sustainable energy technologies, so as to further cement its position as an international leader in renewable energies.
While renewable energies are vital to China’s continued sustainable growth, the study said that there are a number of challenges that must first be addressed in key sectors such as hydro power, wind power, solar and biofuels.
China’s investment in renewables has grown around 80 per cent per annum since 2004, indicating that the country is committed to be global leaders in developing renewable energies and to building a sustainable support structure for the continued growth and development of its national economy, the study said.
The study further said that China’s reliance on coal and peat makes it the world’s highest emitter of greenhouse gasses. Overtaking the USA in 2007, China was responsible for emitting more than 8300 million metric tons of carbon dioxide in 2010: nearly 3000 million metric tons more than the USA and more than 6500 million metric tons compared to India.
During the climate change talks in Copenhagen in 2009, Chinese Premier Wen Jiabao pledged to reduce China’s carbon dioxide emission by 40 to 45 per cent from 2005 levels by 2020. The Solidiance analysis pointed out that in order to do this, the Chinese government will need to “continue heavily investing in renewable energies and increase the use of sustainable energy sources in its overall energy mix.”
On utilizing hydro power, its installations in various parts of China continued to rise in the period up to 2011, accounting for 22 per cent of the total global installed hydro power capacity.
China also dominates the global wind energy market with 25 per cent of total global installed wind capacity and is taking the opportunity to mature with the key industry trends that include consolidation and internationalisation.
The country is now the fastest growing solar panel market in the world, with the government targeting total installed capacity to reach 21 GW by 2015 and 50 GW by 2020. However, the study noted that the industry is overcrowded in which the strong firms suffer from problems of overcapacity, troublesome technological development processes and an international slowdown.
Key potential future growth area for renewables in China is on utilizing biomass and biofuels, that is exploring second generation biofuels, ethanol and energy produce from feed stock sources.
The study explained that with China’s main source of renewable power, the hydro, entering its final flourish and with its designated successor the wind power entering a period of consolidation and uncertainty, China will need to invest heavily in sectors marked for growth such as solar and biofuels to ensure its own national growth remains sustainable.
China targets to increase the use of renewable energies from around nine per cent per annum of its current total energy mix, to 15 per cent by 2020. The government has so far invested in renewable energy sector with $51 billion in 2011.
Despite ambitious government targets and investment into the energy sector, the Solidiance analysis highlighted that coordination of all concerned stakeholders in the development of China’s renewable energy industries must be addressed in order for China to accelerate its renewable energy potentials.
Click here to read the full report of Solidiance about China Renewable Energy.