China's Renewable Energy Boom

For the full article, see Planet Ark.

China is set to spend US$200 billion on renewable energy over the next 15 years. That amount would buy an oil firm the size of Chevron and leave change to fund the current renewables programmes of all Europe's top oil firms for 25 years.

Beijing wants a tenth of its energy to come from environmentally friendly sources by 2010 - a desire driven by soaring air pollution and chronic environmental degradation that is swelling medical bills and provoking discontent.

China's new renewable energy policy, unveiled in January, aims to create a system of financial and policy support for the use of renewable energy, including preferential tariffs for fuels such as biomass. Beyond 2010, China wants renewable sources to supply a fifth of its total energy needs by 2020, up from 7% last year, to slash reliance on imported oil.

Renewable energy will likely become China's next boom sector, with oil at historical high prices and more energy needed to support the country's GDP growth, hovering at around 10%. The compound annual growth rate of China's wind power capacity is estimated to be 39% in 2004-10 and 20% in 2010-20. This presents remarkable growth potential for manufacturers of wind turbines, but competition may force down prices and profit margins.

China - which claims already to be the world's top investor in renewable energy - could leverage the highest wind-power capacity potential on Earth. She aims to have 30 gigawatts of installed wind power capacity by 2020, up from just 1 GW last year, powering between 13 and 30 million households at full capacity.

The country's top economic planning agency expects that up to US$188 billion will need to be invested to reach the 2020 goal. Renewable energy projects will need intensive and long term government support. Beijing appears to have the resolve - and the need - to push ahead, but a proper system of tax or policy incentives could take years. (As we know in the UK.)