Beijing turns its back on dirty energy

Sydney Morning Herald
Saturday 2/8/2008 Page: 42

CYNICS may scoff, but China - the world's biggest greenhouse-gas emitter - is poised to lead world production of solar cells, wind energy turbines and low-carbon energy technology. The nation is already the world's largest renewable-energy producer as measured by installed generating capacity, according to a report from the Climate Group, a coalition of companies and governments that support solutions to global warming. The country is also the world's top manufacturer of solar cells and will be the leading exporter of wind turbines by 2009.

China's position as a renewable-energy consumer and manufacturer runs counter to its ranking as one of the world's biggest polluters and the country's rapid expansion of coal-fired power generation. About 75 per cent of China's electricity comes from coal, said Changhua Wu, China director of the Climate Group, who is based in Beijing.

"They have to do clean energy because they can't just do more and more dirty energy," said Michael Liebreich, chief executive officer of the London company New Energy Finance, which provides research to clean-energy investors. "We're seeing China as being a No 1, 2 or 3 player in lots of different sectors in this industry." China is closing older coal-fired power plants and replacing them with more efficient coal generators, Ms Wu said. While China will continue to rely on coal to fuel its rapid economic growth, state officials understand the need to move to clean energy, she said.

The Government wants to reduce the amount of energy China uses to produce each unit of economic output by 20 per cent in two years and has told its 1000 largest energy-consuming companies to cut their power consumption even more.

Meanwhile, the Government is imposing emergency traffic and industrial production restrictions to reduce pollution during the Olympic Games in Beijing. Leaders "know the urgency of the issue," Ms Wu said. "They know the impact of the issue not only to the world but to China." About 16 per cent of China's electricity came from renewable sources in 2006, led by the world's largest number of hydroelectric generators, according to the report.

China invested more than $US12 billion ($12.8 billion) in renewable energy in 2007, second only to Germany. The nation needs to invest another $US398 billion to reach its 2020 renewable energy goals, an average of $US33 billion a year, the report said.

"The system in China compared to many other countries seems to be more effective," Ms Wu said. "Basically, if the top leadership in Beijing decides to drive this kind of effort, they really get things done." China, which has doubled its output of solar panels in each of the last four years, exports them to developed countries which can afford the higher costs of generating electricity from the sun, New Energy's Mr Liebreich said. "Wind is a more mature industry," he said. "There isn't the same economic penalty today to implement wind." In 2007, each of China's 1.3 billion people emitted 5.1 tonnes of carbon, less than the 8.6 tonnes from each European and the 19.4 tonnes for each American.