Wind turbines in Yantai, China.

China's Booming Solar and Wind Sector May Be Put On Hold

For observers of Monday's opening session of the annual gathering of the National People's Congress (NPC), Premier Wen Jiabao's announcement that China "will put an end to blind expansion in industries such as solar energy and wind power" was a red flag. Some offered their interpretation on China's science blogosphere early Tuesday: The government is planning to put the brakes on the country's rapidly growing renewable energy sector. "It seems a major adjustment to renewable energy policy is afoot," wrote Liu Li, a science and technology policy researcher at Tsinghua University in Beijing.

But that may not be what the government meant. After Wen delivered his Government Work Report in the morning, delegates to the NPC and the Chinese People's Political Consultative Conference (CPPCC)—held concurrently with the NPC and collectively referred to as Liang Hui—broke into sessions to discuss the report. At one such session, Qian Zhimin, deputy director of China's National Energy Administration, told his fellow CPPCC delegates that solar energy and wind power will continue to play a major role in China's economy and in the reduction of carbon dioxide emissions, according to a report on CPPCC's Web site.

To curb carbon dioxide emissions, China in 2009 set two targets for 2020: increase the ratio of non-fossil fuels in the country's total energy mix to 15% from 7% in 2005 and cut carbon dioxide emission per unit of GDP 40% to 45% below 2005 levels. Qian said the government had hoped that breakthroughs in nuclear power by 2020 would help achieve these targets. But nuclear power development has gone into a trough after Japan's Fukushima disaster. Meanwhile, widespread drought has diminished hydropower production. Wind and solar power will have to make larger contributions to reach the 2020 goal, Qian added.

One thing is clear: China's solar and wind power industries have grown at warp speed. Since 2008, production capacity of both photovoltaic (PV) modules used to assemble solar panels and wind turbines has doubled annually. China now dominates the world in manufacturing of PV modules and wind power equipment, producing far more than the domestic market can absorb. For instance, in 2010 China produced 8 gigawatts (GW) of PV modules, but only about 5% were used domestically; 95% would have to be exported. While American companies already complain about Chinese solar panels being dumped in the U.S. market, Chinese PV manufactures have not been able to sell all of their products and have accumulated large inventories. Further expansion of renewable energy equipment manufacturing is what the government wants to halt, Qian said.

Semiconductor physicist and NPC delegate Chu Junhao agrees with Qian. Chu listened to Wen's speech from a seat on the rostrum in the Great Hall of the People. Chu says the government's intention to tame the renewable energy sector should have been worded differently. Rather than indicating an overall clampdown on the sector, he would like to see "rational and orderly development" of the solar and wind industries, he wrote in an e-mail to ScienceInsider. Chu told a reporter from the Chinese newspaper Science and Technology Daily, "blind expansion is not the main problem in development of solar energy and wind power. … The problem lies in integrating solar and wind power into the grid. What's most needed now is technology development to increase the ratio of new energy sources in China's energy structure."

Thanks to China's Golden Sun program, which subsidizes pilot projects for solar power generation, the nation's installed solar power capacity grew more than 300% from 2010 to 2011 to reach about 3 GW. Installed wind power generating capacity reached 62 GW in 2010. But installed capacity does not mean actual use. Chu says certain rules in China's Electricity Act enacted in 1996 are hindering the integration of renewable energy into the country's power grid, and he has submitted a proposal to NPC to revise the law. For instance, the law requires that power be raised to 10 kilovolts at generating sites in order to be integrated into the grid, something difficult to do for solar and wind power plants. As a result, in 2010, only about 70% of the installed wind power generating capacity and slightly under 60% of installed solar power generating capacity are on-grid. Rather than reigning in the solar and wind industries, the government should develop technology and policy to promote application of renewable energy, Chu says.

Besides the proposal to review the Electricity Act, Chu has also proposed some solutions to address problems in China's renewable energy sector, such as establishing a state-level agency to coordinate development. Perhaps when Liang Hui closes next week, a clearer picture will emerge of the future for solar and wind power in China.

Correction, 12 March: Semiconductor physicist Chu Junhao is an NPC delegate, not a CPPCC delegate. Chu also submitted a proposal to revise certain rules in China's 1996 Electricity Act to NPC, not CPPCC.

Posted in Asia, Policy