Renewable energy to be a priority for nation

By Cai Cai (China Daily)
Updated: 2007-09-15 13:47

China plans to put even greater effort into developing its renewable energy industry and cut greenhouse gas emissions to maintain sustainable economic growth in the coming years.

Investments worth more than two trillion yuan, or 10 percent of the nation's gross domestic product (GDP) in 2006, are needed to meet the renewable energy target by 2020, according to the National Development and Reform Commission (NDRC).

Addressing a press conference in Beijing early this week, Chen Deming, vice minister of NDRC, reiterated that China's medium and long-term target is to boost its fledging renewable energy industry, which is expected to play an important role in sustaining the country's future economic development.

NDRC plans to raise the ratio of renewable energy in total energy consumption to 10 percent by 2010 and 15 percent by 2020, compared to eight percent at present, Chen said.

Currently, coal annually accounts for more than 70 percent of China's total energy consumption, leaving great potential for the development of hydropower, marsh gas, solar, wind and other clean and renewable energies, he added.

Ambitious plan

According to its ambitious development plan, China's installed hydropower, wind power and solar power generation capacity will increase by 190 million kilowatts, 29 million kilowatts and 1.73 million kilowatts respectively between 2006 and 2020.

By 2020, the nation's installed hydropower, wind power and solar power generation capacity will reach more than 300 million kilowatts, 30 million kilowatts and 1.8 million kilowatts respectively.

To achieve this goal, China will have to seek greater international financial support and cooperation to develop its renewable energy industries in the years ahead, Chen said.

The Chinese government also expects and encourages more domestic small and medium-sized enterprises (SMEs), especially private firms, to join hands in the development of the country's renewable energy industry, the vice-minister added.

He believes there is enough room for both foreign and domestic companies in the huge renewable energy sector.

The Chinese mainland has abundant renewable energy resources.

China generates much lower levels of greenhouse gases than developed countries, but treats the issue seriously and spares no effort to cut carbon dioxide emissions by enhancing energy efficiency and developing renewable energy, Chen pointed out.

Setting a specific target for renewable energy development is part of the country's commitment to saving energy and cutting emissions, he noted.

Incentives to go green

"We will adopt measures to guide and encourage the development of renewable energy. We will come up with various taxation and fiscal incentives, including subsidies and tax breaks," Vice-Minister Chen said.

The preferential policies will ensure equal treatment for all companies, whether private or State-owned, he promised.

Meanwhile China will continue to develop liquid biological fuel under the precondition of ensuring food security, said Chen.

The nation will not encourage the use of corn as bio-fuel raw material but turn to non-food crops, such as sweet potato and sorghum, to produce liquid bio-fuel, including ethanol and bio-diesel.

Most of such non-food crops grow in saline and barren lands that are unsuitable for growing grain, he said.

It is common practice around the world to produce bio-ethanol from corn; the United States annually produces 15 million tons of bio-ethanol from the crop, and has therefore increased corn output but decreased land area for growing soybean.

"In view of the per capita area of China's farmland, such a process is not suitable for the country," Chen said.

On the Chinese mainland, there are four facilities annually producing 1.02 million tons of bio-ethanol with long-preserved grain that has become inedible, he said.

"We will require real estate developers to install solar power equipment in their projects in the coming years to reduce energy consumption. And large State-owned energy enterprises will have quotas for investment in the development of renewable energy," the vice minister added.

Industrial analysts have said that most of the required two trillion yuan investment by 2020 will come from the market, with only a small proportion coming from the government.

As long as there are favorable government policies, market investment will support the development of renewable energy, analysts say.

Market-oriented preferential policies may include setting higher prices for electricity generated by renewable energy.

Hydropower and wind power are priority areas for developing renewable energy, because of the country's vast potential and advanced technology, said Chen.