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Renewable Energy — Solar and Wind

Overview

Although China still relies on coal to produce more than two-thirds of its energy, it continues to rapidly increase renewable energy sources. China is now the world’s largest producer of hydropower and in 2010 overtook the United States as the world leader in installed wind capacity. China is also the world’s leading manufacturer of solar photovoltaic (PV) cells, but its domestic market remains immature. Renewable sources produce approximately 10% of China’s energy, and the Chinese government expects to boost that share to at least 15% by 2020.

Sub-Sector Best Prospects

Solar:

China has large solar resources and is the world’s leading manufacturer of solar PV and solar water heaters. China-manufactured PV accounted for nearly 50% of global supply in 2010, and China now produces over 70% of the world’s solar water heaters. However, 95% of its solar panels are exported to countries with more favorable incentives. China has established a solar energy target of 20 GW of installed PV capacity by 2020 and 300 million m2 for solar water heating.

The government has used the concession process for utility-scale PV projects to help it set a price it deems appropriate for solar energy. In 2009, China issued its first tender for two 10 MW utility-scale solar power plants in Dunhuang, Gansu province. In 2010, the Chinese government initiated a second round of concession bids for 13 large-scale PV projects for a total of 280 MW. The projects are located in six western provinces: Shaanxi, Qinghai, Gansu, Inner Mongolia, Ningxia and Xinjiang.

Wind:

China has the largest wind resources in the world, with three-quarters offshore. According to the China Wind Energy Association, China’s wind power capacity grew by more than 100% for 4 consecutive years from 2006. In 2010, wind power installation capacity reached 30 GW, and China overtook the United States to become the world’s largest wind power market. China aims to have 150 GW of wind power capacity by 2020.

China has over 80 wind turbine manufacturers and 70 blade manufacturers. In 2009, three Chinese firms ranked among the top ten globally: Sinovel (No. 3), Goldwind (No.5) and Dongfang (No. 7). From 2008 to 2009, Chinese firms began to export turbines and components abroad. China’s Central government recently issued offshore wind regulations, with a target of 30 GW installed capacity planned for 2020; however, many uncertainties remain about the viability of offshore wind in China.

Opportunities

Although China is already the world’s largest supplier of photovoltaic cells, it exports approximately 90% of production with the domestic market still undeveloped. Utility-scale solar is being explored in remote western regions with plentiful land and solar resources. China’s low-carbon development zones and eco-cities present significant opportunities. Crystalline silicon is favored in China due to the local manufacturing base, but there is growing interest in thin-film technology. Concentrated Solar Power (CSP) is new in China, but a niche market may open up in western regions. Chinese inverters and control boxes are less advanced and of lower quality than foreign-made components, presenting opportunities for U.S. companies.

Cutting-edge and high-quality technologies that drive down operating costs, improve wind farm efficiency, or support and enhance connectivity to the grid will play an important role in the growth of the wind industry. Opportunities also exist for companies that can help China more accurately assess wind resources. Materials technology, reliable high-performance controllers, and bearings are in critical need by Chinese manufacturers. Specialized coating products, particularly for offshore projects, could also present opportunities.

According to the China Greentech Initiative, primarily due to Chinese government policy objectives, the offshore wind sector should experience strong growth in the coming years. Companies with offshore experience will find most opportunities in areas where there is limited or no domestic competition. This would include such things as bearings, composites, installation expertise, undersea cables, offshore electronics, foundations, generators, controls systems, and converters. Sinovel, for example, sources 20% of its 3- MW offshore turbine components from foreign vendors.

Web Resources

China Greentech Initiative

U.S.-China Energy Cooperation Program

China Renewable Energy Industry Association

China Wind Energy Association

China New Energy Chamber of Commerce

Solarcon China 2011

Wind Power Asia 2011 Expo

China Wind Power 2011

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