Clean Energy: An Exporter’s Guide to China
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Clean Energy: An Exporter’s Guide to China



Clean Energy: An Exporter’s Guide to China

Clean Energy: An Exporter’s Guide to China



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Clean Energy: An Exporter’s Guide to China Clean Energy: An Exporter’s Guide to China Presentation Transcript

  • U.S. Department of Commerce International Trade Administration Clean Energy: An Exporter’s Guide to ChinaThe International Trade Administration’s mission is to create prosperity bystrengtheningthecompetitivenessofU.S.industry,promotingtradeandinvest-ment, and ensuringfairtrade and compliance withtrade lawsand agreements. Market Access and Compliance 1401 Constitution Ave., NW Washington, DC 20230 T 202.482.3022 F 202.482.5444
  • Clean Energy:An Exporter’s Guide to ChinabyEnergy and Security GroupReston, VA 20190for U.S. Department of Commerce,International Trade Administrationhttp://trade.govunder contract number DG1350-07-SE-4516 ESG104 ITARelease Date: July 2008
  • Table of Contents Abbreviations and Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Executive Summary 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Clean Energy Technology Defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 China: Energy Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Renewable Resources, Capacity, and Potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Energy Efficiency, Co-Generation, and Transportation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Market Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Energy Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Opportunities for U.S. Clean Tech Firms in China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Barriers for U.S. Firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Introduction 7 Section 1: China 9 Chapter 1: China’s Energy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Energy Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Current Status of Chinese Clean Energy Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Clean Transportation Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Chapter 2: Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Co-Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Clean Transportation Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Market Drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Cost Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Chapter 3 Clean Energy Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Renewable Energy Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Energy Conservation Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Tax Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Government Procurement Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Standards and Quality System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Forthcoming Energy Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Chapter 4 Opportunities for U.S. Firms in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Need for High-quality Equipment, Products, and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Energy Technology Development Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Chapter 5 Investment and Financing of Clean Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Financing Sources for Clean Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Venture Capital and Private Equity Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Chapter 6 Barriers to Clean Energy Tech Trade and Investment for U.S. Firms. . . . . . . . . . . . . . . 39 Legal and Regulatory Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Lack of Government Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Clean Energy: An Exporter’s Guide to China iii
  • Low Awareness of Intercultural Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Relative Higher Product Prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Government Procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Contract Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Payment Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Annex 1. Major Market Players in China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Annex 2. Chinese Policy-makers with Authority over Clean Energy Technologies. . . . . . . . . . . 51 Annex 3. Guidance Catalogue of the Renewable Energy Industry . . . . . . . . . . . . . . . . . . . . . . . . . 55 Section 2: Clean Energy Technologies Defined 63 Renewable Energy Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Biomass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Waste-to-Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Solar Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Wind Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Geothermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Hydropower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Ocean Power Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Energy Efficiency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Hybrids and Co-generation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Hybrid Power System Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Co-generation System Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Clean Transportation Technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Appendix A. Resources for U.S. Firms 73 Appendix B. Sustainable Energy Finance Directory 80 Chapter Notes 103iv U.S. Department of Commerce | International Trade Administration
  • Abbreviations and AcronymsAcronyms DOC U.S. Department of Commerce DRCs provincial Development and Reform CommissionsABS asset-backed securities DSM demand-side managementAC alternating current EC energy conservationACEEE American Council for an Energy-efficient ECB external commercial borrowingEconomy ECBC Energy Conservation Building CodesACORE American Council on Renewable Energy ECO Energy Efficiency Commercialization ProjectADB Asian Development Bank EE energy efficiencyAEE Association of Energy Engineers EEB Bureau of Economic, Energy and Business AffairsAESP Association of Energy Services Professionals (United States)AFV alcohol fuel vehicle EEI energy efficiency indicatorALM asset liability management EERE Office of Energy Efficiency and Renewable EnergyAPM administered pricing mechanism (United States)APP Asia–Pacific Partnership on Clean Development and EIB European Investment BankClimate EJ exajouleAQSIQ Administration of Quality Supervision, Inspection, EMCO energy management contractand Quarantine EOU export-oriented unitASE Alliance to Save Energy EPC equipment procurement and constructionASEAN Association of Southeast Asian Nations ERI Energy Research InstituteASTAE Asia Alternative and Sustainable Energy ESCO energy service companyASTM American Society for Testing and Materials ETC evacuated tube collectorsbcm billion cubic meters EV electric vehicleBIPV building-integrated photovoltaics EVA solid phase crystallization of evaporated siliconBOO build, own, operate Ex-Im Export–Import Bank of the United StatesBOOT build, own, operate, and transfer FAS Foreign Agricultural Service (United States)BOV battery-operated vehicle FDI foreign direct investmentBPL below poverty line FI financial institutionBT billion tons FPC flat plate collectorCATARC China Automotive Technology and Research FYP Five-Year PlanCenter GATT General Agreement on Tariffs and TradeCCC China Compulsory Certification Mark GB Guojia BiaozhunCDM Clean Development Mechanism gce gram of coal equivalentCE European Conformity (French acronym) GDP gross domestic productCEC China Electricity Council GEF Global Environment FacilityCER credits for emission reductions Gg gigagramCET clean energy technology GHG greenhouse gasCFL compact fluorescent lighting GNP gross national productCGC China General Certification Center GPV gas-powered vehicleCHCP combined heat, cooling, and power GRP glass fiber–reinforced plasticCH4 methane GW gigawattCHP combined heat and power GWe gigawatt electricCLASP Collaborative Labeling and Appliance Standards GWp gigawatt peakProgram HFC hydrofluorocarbonCNCA Certification and Accreditation Administration HIT heterojunction with intrinsic thin layerCNG compressed natural gas HT high-tensionCO2 carbon dioxide IBRD International Bank for Reconstruction and Devel-CREIA Chinese Renewable Energy Industries Association opmentCSC China Standard Certification Center ICB international competitive biddingCWEA Chinese Wind Energy Association ICBC Industrial and Commercial Bank of ChinaDC direct current IEA International Energy AgencyDFI development financial institution IEC International Electrotechnical CommissionDME di-methyl ether IFC International Finance CorporationClean Energy: An Exporter’s Guide to China v
  • IFI international financing institution NDRC National Development and Reform CommissionIGCC integrated gasification combined cycle N2O nitrous oxideIIFCL India Infrastructure Finance Company Limited NOx nitrogen oxideINR Indian National Rupees NPC National People’s CongressIP intellectual property NREL National Renewable Energy Laboratory of the U.S.IPA Indian Patent Act Department of EnergyIPP independent power producer OECD Organization for Economic Co-operation andIPR intellectual property rights DevelopmentIREDA Indian Renewable Energy Development Agency OFAC Office of Foreign Assets Control (United States)ITA U.S. International Trade Administration OGL open general licenseJBIC Japan Bank for International Cooperation O&M operation and maintenanceJCF Japan Carbon Finance, Limited OPIC Overseas Private Investment Corporation (UnitedJV joint venture States)kgce kilogram of coal equivalent PCF Prototype Carbon Fundkha kilohectare PDD Project Design DocumentationKP Kyoto Protocol PE private equitykT kiloton PECVD plasma-enhanced chemical vapor depositionkV kilovolt PEMF Private Energy Market Fund LPkW kilowatt PEMFC proton exchange membrane fuel cellkWe kilowatt electric PHWR pressurized heavy water reactorkWh kilowatt hour PPA power purchase agreementkWp kilowatt peak PPP public–private partnershipLC letter of credit PSU public–sector undertakingLED light-emitting diode PV photovoltaicLNG liquefied natural gas R&D research and developmentLOLP loss of load probability RE renewable energyLPG liquefied petroleum gas (Propane) REDP World Bank Renewable Energy DevelopmentM&A mergers and acquisitions Programmb/d millions of barrels per day REL Renewable Energy LawMIGA Multilateral Investment Guarantee Agency REPS renewable energy portfolio standardMJ megajoule RMB Chinese Yuan RenmimbiMMSCM million standard cubic meter RPS reserve energy portfolio standardMOC Ministry of Construction RSPM respirable suspended particulate matterMOF Ministry of Finance SAC Standardization Administration of ChinaMOFCOM Ministry of Commerce SAFE State Administration of Foreign ExchangeMOFTEC Ministry of Foreign Trade and Economic Coop- SBA Small Business Administration (United States)eration SDDC Song Dian Dao Cun (China’s National Village Elec-MOST Ministry of Science and Technology trification Program)MSIHC Manufacture, Storage, and Import of Hazardous SDDX Song Dian Dao Xiang (China’s National TownshipChemicals Electrification Program)mt million tons SEFI Sustainable Energy Finance InitiativeMT magnetotelluric SEK Svensk ExportkreditmToe million tons of oil equivalent SEPA State Environment Protection AdministrationMU million units S/F JV Sino-Foreign Joint VentureMW megawatt SHP small hydropowerMWe megawatt electric SHS solar home systemMWeq megawatt equivalent SI solar ingotMWp megawatt peak SICLIP Swedish International Climate Investment Pro-NAESCO National Association of Energy Service Compa- gramnies SME small and medium enterpriseNB national competitive bidding SO2 sulphur dioxideNBSC International Center of National Bureau of Statis- SOE state-owned enterprisetics of China SPV solar PVNCCCC National Coordination Committee on Climate SWH solar water heatingChange TC-88 Technical Committee 88 of the IECNCE non-conventional energy tce tons of coal equivalentvi U.S. Department of Commerce | International Trade Administration
  • T&D transmission and distributionTEDA Tamil Nadu Energy Development Agency (India)TERI Tata Energy Research Institutetoe tons of oil equivalentTPES total primary energy supplyTRIPS Trade-related Aspects of Intellectual PropertyRightsTüV Technische Überwachungsvereine (Germany stan-dards/testing company)TWh terrawatt hourUCP Unified Customs and PracticeUL Underwriters LaboratoriesUNDP United Nations Development ProgramUNICITRAL United Nations Commission on Interna-tional TradeUPS uninterruptible power supplyURIF Urban Reform Incentive FundUSAID U.S. Agency for International DevelopmentUSDA U.S. Department of AgricultureUSDOC U.S. Department of CommerceUSDOE U.S. Department of EnergyUSTDA U.S. Trade and Development AgencyUSTR U.S. Trade RepresentativeVAT value-added taxVER Verified Emission ReductionVSD variable-speed driveW wattWEEA World Energy Efficiency AssociationWOFE wholly-owned foreign enterpriseWp watt peakWTG wind turbine generatorWTO World Trade OrganizationClean Energy: An Exporter’s Guide to China vii
  • Executive Summaryn IntroductionThis report is intended as a clean energy technology technology converts energy from a waste source, such as amarket overview for China, with two primary objectives: city’s municipal waste system, farms, and other agricultural(1) to analyze the clean energy markets in China and (2) operations, or waste from commercial and industrial opera-to identify opportunities for trade and investment through tions. Large-scale waste-to-energy systems can supply heat2020. The report provides the following: or electricity in utility-based electric power plants or district heating systems. Small-scale systems can provide heating analysis of the existing infrastructure of clean energy4  or cooking fuel and electricity to individual farms, homes, technologies and market opportunities in China and businesses. through 2020 including market forecasts, market driv- Solar technologies convert light and heat from ers, cost data, and market segment analysis. the sun into useful energy. Photovoltaic (PV) systems review of government policies for clean energy devel-4  convert sunlight into electricity, and thermal systems opment in China. collect and store solar heat for air and water heating detailed analysis of barriers and obstacles to clean4  applications. Wind power technology converts energy energy technologies trade and investment in China. in the wind into useful power; the primary market for definition of clean energy technologies for China.4  wind power technology is for wind turbines, which review of resources available to U.S. businesses that wish4  convert wind energy into electricity. Geothermal power to enter Chinese clean energy markets. is generated using thermal energy from underground sources, including steam, hot water, and heat stored in After a short introduction, Section 1 addresses clean rock formations; various technologies are used to gener-energy technologies for China, including information on ate electricity. Hydropower is the conversion of energyChina’s overall energy status, both current and projected; embodied in moving water into useful power. Today,a market overview; identification of clean energy policies; hydropower supplies about 19 percent of the world’strade and investment opportunities for U.S. firms; and electricity. Finally, ocean power – sometimes referred tobarriers to clean energy market entry, development, and as tidal – technology makes use of energy in the ocean bycommercialization. This chapter also includes annexes on converting it into electricityChinese policy-makers with authority over clean energy Hybrid and co-generation power systems take advan-technologies and information on the renewable energy tage of the benefits of multiple technologies in a single,industry in China. Section 2 provides definitions of the integrated system for power generation. Renewable-basedclean energy technologies addressed in the report. hybrid power systems use combinations of wind turbines, PV panels, and small hydropower generators to generate electricity. Hybrid power systems typically include a dieseln Clean Energy Technology Defined or other fuel-based generator (including biofuels) andClean energy technologies include renewable energy, may include batteries or other storage technology.hybrid and co-generation, and energy efficiency technolo- Co-generation systems, also called combined heatgies for power generation; alternative fuels; and advanced and power (CHP) systems, generate both electricitytechnologies for transportation. They produce power and useful heat. Conventional fossil-fuel-based electricfor a wide range of applications using no fuel or less fuel power plants generate heat as a byproduct that is emit-than fossil-fuel-based technologies, produce no or fewer ted into the environment; co-generation power plantspollutants than conventional technologies and can use collect this heat for use in thermal applications, therebyrenewable energy sources, which, unlike fossil fuels, are converting a higher percentage of the energy in thenot depleted over time. The renewable energy technolo- fuel into useful energy. The most efficient conventionalgies considered in this report are biomass and biofuels, power plants have a typical fuel-to-electricity conver-waste-to-energy, solar power, wind power, geothermal, sion factor of about 50 percent, while co-generationhydropower, and ocean power. plants can achieve efficiencies of over 75 percent. Biomass consists of plant and plant-derived material. Examples of thermal loads that can be served by aSources include agricultural residues such as rice hulls, co-generation plant are: district heating systems thatstraw, bagasse from sugarcane production, wood chips, provide heat for towns and neighborhoods; industrialand coconut shells and energy crops such as sugarcane processes that require heat, such as paper mills; institu-or switch grass. Biomass can be used directly for energy tions such as prisons and hospitals; and wastewaterproduction or processed into fuels. Waste-to-energy treatment plants.Clean Energy: An Exporter’s Guide to China 1
  • Energy efficiency (EE) involves replacing existing ambitious rural electrification program, which has helpedtechnologies and processes with new ones that provide China’s renewable energy consumption increase to 7.5equivalent or better service using less energy. EE results percent of the country’s total primary energy consumptionin energy savings at the time that the energy service is as of 2005. However, although the markets for hydropowerprovided. Energy service providers can also use load and solar water heating technologies are mature, the usemanagement to change the time that an energy service and development of most other renewable energies hasis delivered in order to reduce peak loads on an energy lagged because of high investment costs, specific primarydistribution system. Demand-side management uses both resource shortages, dependence on foreign technology,load management and EE to save the amount of primary and small-scale required to deliver the energy service. Almost half a billion vehicles on the world’s roads Renewable Resources, Capacity, and Potentialcontribute to half of the global oil consumption and gen- China has a large untapped potential for wind energy,erate about 20 percent of the world’s greenhouse gases, perhaps as high as 750 gigawatts (GW) of potentiallyincluding carbon monoxide, nitrous oxides, and particu- utilizable onshore resources (250–300 GW of which arelates. Transportation technologies can help address these considered commercially feasible) and over 1,000 GW ofissues through the use of alternative fuels and advanced offshore resources. In recent years, Chinese wind genera-technologies. Alternative fuels for transportation include tion technology has matured with the help of technologybiodiesel, ethanol, natural gas, and propane. Advanced transfer from foreign countries and a national conces-vehicle technologies include electric vehicles and hybrid sion policy that stipulates 70 percent of wind turbineselectric vehicles, which offer air pollution improvements in developer tenders must be sourced from domesticover average fossil fuel vehicles. Finally, mobile idle reduc- manufacturers—which has helped the domestic industrytion systems and diesel engine retrofits can reduce the substantially. Still, as of 2006, China’s total installed windemissions of heavy-duty vehicles. power generation capacity was only 2.6 GW, indicating substantial growth opportunities going forward. The resource potential for solar power in China is equal-n China: Energy Overview ly promising. China receives the equivalent energy potentialSince the start of the open-door and reform policies of 1.7 trillion tons of coal in the form of solar radiation. Byin 1978, China has experienced consistent economic the end of 2006, the cumulative installed capacity of solargrowth on the order of 9.5 percent per year. While on cells in China had reached 80 megawatts peaks (MWp),average energy demand grew at about 5 percent per year with rural electrification, communications, and industryprior to 2001, the past seven years have seen a tremen- accounting for the majority of the market share. Currently,dous surge in energy-intensive heavy industries, which China is the third-largest PV panel manufacturing countryhas dramatically accelerated energy demand. According in the world behind Germany and Japan, developing 370to the National Bureau of Statistics of China, China’s cur- MWp of solar PV cell modules in 2006 – however, only 10rent energy consumption increase stands at a rate of 9.3 MWp were consumed domestically. Consequently, solarpercent, and this rapid growth is expected to continue. power production remains much lower than actual capac-In fact, China is predicted to surpass the United States as ity. While policy support and government subsidy programsthe largest energy consumer soon after 2010. can be credited with 46.2 percent of China’s developed Although China’s energy resources are substantial, capacity, high investment costs, undefined feed-in tariffs,the country’s self-sufficiency is decreasing as the overall and the lack of fiscal incentives means a significant on-gridenergy demand has grown much faster than its domestic solar PV market has yet to materialize.output. In 2005, foreign supply accounted for 7.7 percent Solar thermal energy for water heating is one of theof the total energy consumption in China, and in 2007 most advanced renewable energy technologies in Chinathe country became a net coal importer for the first time. with a mature commercial domestic market. China hasChina has become increasingly dependent on oil imports a cumulative installed capacity of solar water heatersand liquid natural gas imports, the latter of which were (SWHs) that surpasses 90 million square meters (m2) ofseen for the first time in 2006. Coal is China’s predominant collector area—roughly 60 percent of the world’s total. Inenergy source; however, with the rapid increase in energy fact, nearly one in ten Chinese households owns an SWH.demand and the urgency of energy and environmental Notably, China has over 1,000 solar water heating manu-security issues, the shift away from conventional energy facturers, and 95 percent of the intellectual property rightstoward clean energy has become an interesting strategic for solar thermal technologies used in China are domesti-option for China. cally owned. In 2006, the domestic production capacity Exploration for the use of renewable energy technolo- stood at 6 million m2, but the domestic market lags behindgies in China began in the 1980s, but government support this capacity—the excess production is currently exportedfor these options did not officially begin until the 8th Five- to Europe and Southeast Asia. China has recently devel-Year Plan in 1991. In the late 1990s, China launched its oped national testing centers and a national certification2 U.S. Department of Commerce | International Trade Administration
  • center for SWH technologies based on international best the lowest EE level. Operational efficiency for end-usepractices, and this has led to improved product quality equipment in China is generally 20 percent lower thanand domestic consumer confidence. Building integrated the international average for advanced countries, which isSWHs is in the early stages. Low aesthetic quality and lack mainly due to obsolete and poorly maintained productionof support from building developers remain challenges for equipment. Nonetheless, the 11th Five-Year Plan includesthe industry. an ambitious target to decrease energy intensity by 20 per- China has a vast bioenergy potential with recent aver- cent through 2010, which is being pursued through 10 keyage biomass resource utilization above 500 million tons of government programs. The challenges facing increased EEcoal equivalent (tce). The majority of the resource potential include a lack of expertise in demand-side managementcomes from wood (300 million tce), followed by straw and and energy-auditing services and a lack of capacity for in-stalk resources (150 million tce), waste water (57 million novative high-efficiency technology development.tce), and urban garbage (23 million tce). The key technolo- Co-generation, or combined heat and power (CHP),gies for biomass include combined heat and power com- remained the major heat supply source in China untilbustion (CHP), biogas, landfill, and other waste gasification. recently, covering 82 percent of total heat demand andIn 2006, power production from CHP amounted to 1.7 GW; 27 percent of the total water heating demand in 2004.biogas amounted to 500 megawatts (MW) minus rural use; Mixed political signals from the provincial and centraland 30 MW was produced from landfill and other gasifica- government, as well as sustained growth of coal utiliza-tion. Biogas development is backed by the central govern- tion and inconsistent electricity tariff increases, havement through strong fiscal incentives as well as investment caused 90 percent of China’s domestic CHP opera-subsidies. By the end of 2006, 17 million household biogas tors to take heavy losses over the last five years. Thedigesters, 140,000 municipal waste treatment facilities, and situation is similar for foreign operators. In fact, CHP4,000 industry sewage biogas facilities providing 1.9 million installations make up almost 50 percent of the powercubic meters (m3) of biogas per year had been installed. plants closed since the beginning of 2007. Nonetheless,It is estimated that the current biogas potential in China co-generation was identified as an important energyfrom industry could be used to generate 3.8 GW of base conservation technology for reducing coal consump-load electricity with 23 terawatt hours (TWh) of electricity tion in the 11th Five-Year Plan, with ambitious targetspotential by 2010. The estimate is considerably higher for set for its development.2020 projections. China has been actively involved in the demonstration Compared to biogas, liquid biofuel technology de- and development of large-scale clean transportation tech-velopment is still in an early stage. China has important nologies since the launch of the “Clean Vehicles Action”bioethanol potential based on sugarcane, cassava, corn, Program in 1999. Gas-powered vehicles (GPVs) are now inand broomcorn cultures. The 10th Five-Year Plan saw the operation, and those on the market are third-generationbeginning of a national program aimed at developing products. As of end-2006, the GPV fleet numbered 265,000technologies for making bioethanol from broomcorn and vehicles. Compressed natural gas vehicles are rapidlysimilar cellulose waste such as corn stalk. Biodiesel devel- growing, with a fleet of 174,170 in 2006. Alcohol fuelopment is also included in the 11th Five-Year Plan but is still vehicles are found in the eastern portion of the country,at the research stage. Its commercialization will depend on and the planned production level for ethanol fuel was re-production cost reductions and increased conversion rates. cently set at about 1 million tons per year. There has been The total potential for small hydropower (SHP) in a considerable amount of government investment in fuelChina is estimated at 71.87 GW and is concentrated cell technology research, and a demonstration program isamong more than 1,600 mountain counties in the middle underway in Beijing for fuel cell bus commercialization.and western regions. However, as of the end of 2004, only Finally, electric vehicle technology is under development,2.1 percent of the total potential had been developed in but applications are still limited by low power capacitywestern China, where the majority of the unelectrified as well as high production costs. Nonetheless, there is apoor are located. SHP is now one of the mature renewable vibrant market for electric bicycles in China, with about 10energy technologies in China, with a significant domestic million units produced in 2005 alone.manufacturing capacity and competitive export potentialin Asia. This is the result of strong fiscal support from the Market Analysiscentral government. By 2004, there were over 100 SHP Projections for 2010 and 2020 from government planningmanufacturers in China, with an annual production ca- documents indicate that the clean technology marketpacity of around 6.3 GW. will increase to $186 billion (based on an exchange rate of $1 = 7.208 RMB) in 2010 and to $555 billion in 2020.Energy Efficiency, Co-Generation, and Transportation Policy objectives for the five key renewable energy (RE)In general, production and operation energy efficiency technologies are shown in Table A below. Market develop-is low in China. Recently, energy efficiency (EE) has ment for some renewable energy technologies has alreadydecreased due to the growing industry sector, which has surpassed the targets established by the government,Clean Energy: An Exporter’s Guide to China 3
  • such as wind; others like SWH, will easily reach the targets percent of the domestic manufacturers produce mono-established if not overtake them. Although the domestic ingot. Two companies—Suntech and Ningbo Solar—market for solar PV generation is not as developed as the dominated the market prior to 2006; in that year the size ofwind and SWH markets, plans have been made for the the market grew with new companies entering the of large-scale on-grid PV and concentrated In total, there are over 3,500 SWH system manufacturerssolar power plants in desert areas of Inner Mongolia, in China, the top ten of which are able to provide high-Gansu, and Xinjiang provinces. Two government-led roof- quality products and good after-sales services. Smalltop PV programs will also stimulate the PV market. hydropower technologies are mature in China, with over The targets for co-generation are equally ambitious. 100 manufacturers. Finally, as a result of energy efficiencyBased on the installed production capacity and the cur- policy and goals set forth in the 11th Five-Year Plan, therent 6.5 percent average annual growth for CHP genera- energy efficiency market is booming as numerous com-tion in China, the total CHP generation capacity will panies and organizations have developed operations inreach 47 GW in 2010 and 87.5 GW in 2020, corresponding various fields.respectively to 37 percent and 68.5 percent of the total The largest market drivers for energy demand areCHP potential. urbanization and economic growth, the latter of which The current cost of investment in wind energy is is a direct result of the country’s booming and energy-in the range of $1,110–1,387/kW. It is expected that intensive industrial exports. In 2006, according to China’swith increasing domestic manufacturing capacity and National Bureau of Statistics, China’s gross domestic prod-technology transfer, the investment costs can be brought uct (GDP) increased by 10.7 percent, while the primarydown to the range of $832–971/kWh by 2010. Similarly, domestic energy consumption rose by 8.4 percent. Notsignificant future cost reductions are expected for solar surprisingly, China is dependent increasingly on energyPV. Other technologies, however, have less scope for cost imports to keep up with the demand.reduction as these are already fairly mature in China and Dependence on costly imports, and the related issueworldwide. of energy security, represents another market driver. Oil In China, there are currently over 80 wind turbine gen- imports alone reached 169 million tons in 2006, and theerator manufacturers and 200 wind developers. Domestic dependence on exports accounted for 47 percent of the oilcompanies occupy over 75 percent of the market. China’s balance. Environmental concerns are an additional marketsolar industry has matured in recent years, with booming driver, specifically in response to the high polluting Chineseinvestments providing an important opportunity. Over 80 coal industry. The International Energy Agency (IEA) concluded that China overtook the United States as the Table A. Policy Objectives for Key RE Technologies. world’s biggest carbon dioxide (CO2) emitter in 2007. The World Bank estimates the total cost of air and water pollu- Objectives Objectives tion in China is roughly $50.22 billion, or about 2.68 percent RE Utilization by 2010 by 2020 of GDP. Acid rain is estimated to cost $4.16 billion in crop damage and $138.73 million in material damage annually. Hydropower Large scale 140 GW 225 GW Moreover, about 54 percent of surface water resources in Small scale 50 GW 75 GW China have been deemed unsafe for human consumption. The Chinese Government considers these issues to be very Bioenergy Generation 5.5 GW 30 GW serious, and the ambitious targets, state investment, and Solid biofuel 10 bil. tons 50 bil. tons policy seen in recent years can be considered an important Biogas 19 bil. m3 44 bil. m3 result of the country’s high priority on sustainable (and sustained) development. Bioethanol 2 mil. tons 10 mil. tons Biodiesel 0.2 mil. tons 2 mil. tons Energy Policy The development of a more robust clean energy policy Wind Generation 5 GW 30 GW is accelerating in response to China’s mounting energy On-grid solar pressures. The strategic position of renewable energy was Solar * 150 MW 1.5 GW PV confirmed with the passage of the Renewable Energy Off-grid solar Law (REL), which was approved by the National People’s 150 MW 0.3 GW PV Congress in February 2005 and took effect on January 1, Solar thermal 150 mil. m2 300 mil. m2 2006. The REL is a framework law that creates targets for renewable energy development and stipulates a number Geothermal 4 mil. tce 12 mil. tce of broadly defined instruments to reach these targets. The NDRC, 2006 Mid- and Long-term Renewable Energy Development Plan. targets are shown above in Table A; the overall renewable * Total solar PV installation includes both on-grid and off-grid generation energy target as a percentage of energy consumption is 10 capacity. percent by 2010 and 15 percent by 2020. The REL mandates4 U.S. Department of Commerce | International Trade Administration
  • the establishment of priority grid access for renewable elec- Analysts anticipate that the Energy Law will be enacted in thetricity generators, a feed-in tariff for renewable electricity years to come. In the meantime, the National Energy Bureaudelivered to the grid, a national and regional cost-sharing under the National Development and Reform Commissionmechanism for renewable energy subsidies, a special fund will continue to administer energy policy.for renewable energy, and favorable loan conditions and taxtreatment for renewable energy. Opportunities for U.S. Clean Technology Firms in China The successful implementation of the REL depends on The opportunities for U.S firms entering the Chinese cleanits implementation regulations, which further elaborate energy market have grown tremendously during recentupon the policy instruments defined in the REL. Ten such years. The development of a market economy, increasingregulations have been issued so far, including the Mid-and concerns about energy security, and the mounting envi-Long-term Renewable Energy Development Plan, which ronmental pressures have all incentivized clean technolo-stipulates that renewable energy utilization should reach gies and facilitated their entry into the market. Yet the300 million tce by 2010 and 600 million tce by 2020. An- rapidly growing government push and resulting marketother is the Guidance Catalogue of the Renewable Energy pull for clean energy development presents special chal-Industry, which was released by the National Develop- lenges for China due to the technological requirementsment and Reform Commission (NDRC) in November necessary to reach the aggressive government goals. The2006 and aims to guide provincial decision-making on the commercial market for clean energy technologies in Chinadirection for technological research and innovation and at this time should be considered embryonic at best. Asrenewable energy investment. Finally, a special fund for the demand for clean energy technology increases, it canrenewable energy development supports the key fields of be expected that there will be an increasing demand forfossil fuel alternatives, building heating and cooling, and proven, high-quality products and services—which pro-renewable energy electricity generation through no-inter- vides an opening in the market for qualified internationalest and discount loans. An application guidebook for the companies with sustainable business operations.funds is drafted annually and published by the NDRC and To fulfill the objective of a 20 percent decrease in en-the financial department of the State Council. ergy intensity by 2010 (relative to 2000 levels), the Chinese China’s new Energy Conservation (EC) Law was ap- Government has recognized that major developments inproved by the 10th State Congress on October 28, 2007, technology and energy management must be achievedand entered into effect on April 1, 2008. The Law identifies across industrial, commercial, and residential sectors.key policy instruments, which includes setting targets, According to China’s Energy Research Institute, thedeveloping procedures for product standardization investment potential for energy efficiency in China fromand efficiency labeling, and establishing incentives for 2007 to 2010 will be about $120–160 billion. In general,EC technologies, as well as demand-side management there is a lack of expertise in China in energy efficiencyincluding preferential tax policies and subsidy funds. technologies and innovation, energy auditing, and energyIndeed, many preferential tax policies have been imple- management. Areas such as operation and maintenancemented to support clean energy research, development, for renewable energy (RE) generation, energy auditingand production. For example, since 2001 waste-to-energy and advisory services, consulting on energy managementprojects have been value-added tax (VAT) exempt, and and RE integration, and standard energy services are alla 50 percent VAT discount applies for the use of energy- potentially profitable business opportunities.saving materials in buildings, for wind power projects, and Technological needs in the clean energy industryfor coal bed methane projects. include remote monitoring and control systems for wind A draft of China’s integrated Energy Law was recently farms, technology for large-scale wind turbines (over 2published. The forthcoming law provides a framework law MW), and software for resource assessment and grid in-for overall national energy development and will include tegration. In solar power, opportunities include aestheticguiding principles for legislation on energy structure, energy building integration for SWHs, improved technology inefficiency, energy security, energy development and utiliza- thin film, interface technology for building-integrated PVtion, and energy and environmental coordination. One of and for power plants, and high-quality converters. In bio-the most important changes in the new Energy Law is the energy, needs include research and development (R&D)proposed establishment of an Energy Ministry directly under on the production of ethanol from cellulosic feedstock,the State Council. The Energy Ministry would be responsible high-efficient fermentation technology for higher biogasfor overseeing energy management in China, including yield, demonstration of new building material and tech-monitoring energy-intensive exports, approving energy and nology for digester construction and biogas storage, andmining activities, promoting energy efficiency and inter-re- biogas processing for feed-in to the natural gas grid.gional energy infrastructure, and establishing market-drivenprice mechanisms as well as incentive policies. The law also Barriers for U.S. Firmsmandates that a 20–30 year energy strategy will be developed Despite the significant opportunities that the Chineseevery five years, along with five-year energy plans. Industry clean energy technology market presents, importantClean Energy: An Exporter’s Guide to China 5
  • barriers need to be carefully considered in developingbusiness in China. These include lack of a transparent andconsistent body of laws and regulations, lack of a super-visory mechanism for renewable energy implementation,customs regulations and a phasing out of favorable tariffsfor foreign investment, and restrictions on foreign directinvestment that include biofuels manufacturing. Lack oftransparency in government procurement, including in-stances of corruption, can also present challenges as wellas intellectual property rights and contract enforcement.Finally, other considerations like understanding Chinesebusiness culture, identifying local partners, and buildinggood government relationships are also important non-policy related barriers that must be considered.ConclusionIn summary, China presents both unprecedented op-portunities and challenges for clean energy technolo-gies, due to the sheer scale of the market, the demand,and the projected future energy scenario. Over thelast decade, China faced serious difficulties related toenergy shortages and heavy pollution, both of whichhave been brought on by rapid economic development.In response, the government of China has actively pro-moted the development and deployment of renewableenergy with ambitious policies and targets. China will likely be a major net exporter of renewableenergy equipment in the near term, as the country pro-duces far more equipment than it can install domestically.However, as the demand for higher product quality andafter-sales service increases, and as Chinese consumersbecome more conscious of efficiency and environmentalconcerns, this situation is likely to change. The Renew-able Energy Law (REL) has already had a major impacton accelerating China’s clean energy market and resultedin an increase of new renewable energy projects, particu-larly in the areas of wind, solar, and biomass. Ambitioustargets are included in the REL for the next 10–15 years,which, when paired with the industry outlook, are likelyto be even higher. Therefore, U.S. firms should anticipatea growing demand for proven, high-quality products andservices in key areas such as energy service companies,energy efficiency auditing, wind farm operation and man-agement, technological innovation of large-scale turbines,aesthetic building integration of SWHs, and improvedthin-film PV technology.6 U.S. Department of Commerce | International Trade Administration
  • Introductionn Purpose International Institutions Asian Development Bank; 4 The report’s objectives are twofold: (1) to analyze the clean World Bank; 4 energy markets in China and (2) to identify opportunities International Energy Agency. 4 for trade and investment through 2020. T  rade, Industry, and Sector Associations; Business Counselsn Approach Interviews conducted with key trade associations, 4 The report provides the following: including the Chinese Renewable Energy Industries As- sociation (CREIA)4  analysis of the existing infrastructure of clean An Documents from the American Council on Renewable 4  energy technologies and market opportunities in China Energy (ACORE). through 2020. This includes market forecasts, market drivers, cost data, and market segment analysis. T  ransmission and Distribution Agencies,4 review of government policies for clean energy devel- Manufacturers, Generators opment in China. Annual Reports from various industry leaders operating 4 4 detailed analysis of barriers and obstacles to clean in China; energy technologies trade and investment in China. Annual Reports of major electricity generators in China. 4 4 definition of clean energy technologies for China. review of resources available to U.S. businesses that wish4  n Organization of the Report to engage in clean energy trade and investment in China. The remainder of this report is organized as follows:n Methodology Section 1 provides a market overview for China. 4 Both primary and secondary data sources were used in This chapter includes information on China’s overallthe preparation of this report. These included: energy status, both current and projected; a market overview; identification of clean energy policies; trade China Resources and investment opportunities for U.S. firms; and barriers Annual reports from relevant ministries at the national4  to clean energy market entry, development, and com- level and, where available, at the provincial levels; mercialization. The chapter also includes annexes on List of relevant agencies, areas of operation, and4  Chinese policy-makers with authority over clean energy contact details; technologies and information on the renewable energy Policy documents (e.g., China’s Renewable Energy4  industry in China. Promotion Law 2006 China’s Guidance Catalogue of Re- Section 2 provides a definition of clean energy 4  newable Energy Industry) as well as documents stating technologies addressed in the report. This chapter quotas, tax requirements, procurement requirements, includes energy efficiency, distributed generation, com- foreign investment policy, and master plans for technol- bined heat and power, wind, solar photovoltaics, solar ogy development in different sectors; thermal, small hydropower, biomass, biofuels, waste-to- Statistical documents containing installed capacity,4  energy, geothermal, and ocean energy technologies. energy balance, consumption, etc.; Appendix A provides a compendium of trade and 4  Five-Year Plans and ministerial long-term development4  investment resources for U.S. clean technology plans; Annual Reports of relevant corporations; firms. Contact information for individual organizations Data related to financial markets in China.4  is also included. Appendix B provides a directory of sustainable energy- 4  U.S. Government Sources financing sources. This directory is synthesized from the U.S. Department of Commerce;4  on-line resource available at, which4  Department of Energy, including the National Re- U.S. is maintained by the Sustainable Energy Finance Initia- newable Energy Laboratory, Energy Information Agency, tive, a joint initiative of the United Nations Environment and Office of Energy Efficiency and Renewable Energy; Program and the Basel Agency for Sustainable Energy.4  Trade and Development Administration; U.S. Export–Import Bank of the United States;4  Asia–Pacific Partnership on Clean Development and Climate.4 Clean Energy: An Exporter’s Guide to China 7
  • Lake RUSSIA Baikal KAZAKHSTAN Hailar Lake Heilongjiang Balkhash Qiqihar Harbin Karamay MONGOLIA Changchun Kulja Nei Mongol Jilin Urumqi KYRGYZSTAN Shenyang Liaoning Hebei NORTH Kashgar Xinjiang KOREA Hohhot Beijing AFG. Dalian Yumen Tianjin SOUTH PAK. Taiyuan Shijiazhuang KOREA Yinchuan Yantai Ningxia Qingdao Golmud Shanxi Jinan Xining Lanzhou Shandong Yellow Qinghai Jiangsu Sea Gansu Zhengzhou Shiqunhe Xian Henan Anhui Shaanxi Nanjing Xizang Shanghai Hefei Sichuan Hubei Hangzhou Wuhan Lhasa Chengdu Chongqing Zhejiang Nanchang NEPAL East China Changsha Sea Jiangxi BHUTAN Hunan Guizhou Fuzhou INDIA Guiyang Fujian Xiamen BANGLADESH Kunming Guangdong Taiwan Guangxi Guangzhou Yunnan China Nanning Hong Kong MYANMAR VIETNAM National Capital Xian City LAOS Haikou International Boundary Bay of Hainan Provincial Boundary Bengal South China Hunan Province Name Sea Disputed Boundary 500 km THAILAND PHILIPPINES 0 500 Miles CAMBODIA8 U.S. Department of Commerce | International Trade Administration
  • Section 1: Chinan Chapter 1: China’s Energy StatusSince the start of China’s open-door and reform policies in 7.7 percent of the total energy consumption in China, as1978, China has experienced consistent economic growth shown in Figure 1.3.on the order of 9.5 percent per year.1 During that time, Coal is China’s predominant energy source. In 2005,energy demand grew roughly 5 percent per year, but has coal accounted for 69 percent of China’s total energygrown significantly more than that in the last seven years.2 consumption, but domestic coal production is no longerHistorically, China’s industrial development was labor- sufficient to meet China’s increasing demand. China be-intensive and heavily dependent on manufacturing with came a net coal importer for the first time in 2007. In 2030,relatively low energy intensity, but since 2001, China has net imports are expected to reach 3 percent of China’s coalseen a surge in energy-intensive heavy industry. demand and 7 percent of global coal trade.8 China’s oil balance deficit has been increasing rapidly forEnergy Supply and Demand more than a decade. The country became a net importer ofAt the beginning of the new millennium, both the Chinese petroleum in 1993. In 2006, China imported 3.7 million bar-Government and the International Energy Agency (IEA) rels of oil per day (mb/d); nearly half its domestic petroleumpredicted a 3–4 percent growth in energy demand for China consumption (see Figure 1.4 below). Such a trend is likelybetween 2000 and 2010. These scenarios were based on ex-pectations of a structural shift away from heavy industry and Figure 1.1: China Energy Consumption in the Future (mToe)toward light industry, as well as a projected economic growth 4000rate of 7–8 percent.3 These forecasts reflected trends in energy (millions of tons of oil equivalent) 3500consumption from around the year 2000 and were estab- CHINAlished following the scaling back of the centrally orchestrated 3000 Energy Demandconglomerate-building ambitions in China that followed 2500the Asian financial crisis.4 They also reflected a continuous USincrease in energy intensity efficiency since 1978. 2000 EU However, the shift away from heavy industry failed to 1500materialize and the trend toward greater energy efficiency 1000reversed around 2002. As a result, according to China’s INDIA JAPANNational Bureau of Statistics, the rate of increase for energy 500consumption in China currently stands at 9.3 percent.5 0The most recent IEA forecast predicts that China’s average 1990 2005 2015 2030increase in energy consumption will be up to 3.2 percentper year from 2005 to 2030 with a 5.1 percent annual growth Yearrate from 2005 to 2015 (see Figure 1.1 below). In compari- Source: World Energy Outlook 2007, IEAson, the Chinese Government’s new forecast for the averageannual growth in energy consumption is 4 percent.6 Thesenew scenarios are based on the expectation that China’s Figure 1.2: Primary Energy Demand by Regionheavy-industry sector will continue to expand and dependon the stability of the national energy policy environment. OECD Europe 0.5% OECD North America 1.0% Currently, China is the world’s second-largest energy OECD Pacific 0.9%consumer after the United States. According to recent Transition economies 1.1%scenarios from the IEA, China will surpass the United China 3.2%States as the largest energy consumer soon after 2010. India 3.6%China’s energy demand will rise from 1,742 million tons Rest of developing Asia 2.3%of oil equivalent (mToe) in 2005 to 2,851 mToe in 2015 Latin America 2.3%and 3,819 mToe in 2030.7 Such an increase will signifi- Middle East 2.9%cantly affect international energy consumption patterns, Africa 1.8%as shown in Figure 1.2. Although China’s energy resources are substantial, the 0 500 1000 1500 2000 2500 3000 3500 4000country’s self-sufficiency is decreasing. Since 2004, China’s 2005 2030 % annual average growth rateoverall energy demand has grown much faster than the Source: International Energy Agency, World Energy Outlook 2007: Chinadomestic output. In 2005, foreign supply accounted for and India Insights (Paris, France: OCED/IEA, 2007).Clean Energy: An Exporter’s Guide to China 9
  • to continue in the future as China will become increasingly As a major plank in China’s energy strategy, renewable dependent on oil to power its growing automotive fleet and energies now play a significant role in meeting the coun- emerging industrial capacity. The IEA predicts China’s oil try’s energy demand, structuring the energy industry’s consumption will reach 13.1 mb/d in 2030, while the share of development patterns, reducing environmental pollution, imports will rise from 50 to 80 percent. and promoting economic development. In addition, liquefied natural gas (LNG) imports are In 2005, China’s renewable energy consumption rose to also increasing rapidly. China imported LNG for the first 116 mToe and amounted to 7.5 percent of the country’s to- time in 2006. The imports amounted to 0.9 billion cubic tal primary energy consumption.10 However, while the mar- meters (bcm) and originated mainly in Australia. China’s ket for hydropower and solar water heating technologies is LNG imports are expected to increase sharply to 12 bcm mature, the use and development of most other renewable in 2010 to 28 bcm in 2015 and to 128 bcm in 2030.9 energies have lagged behind thanks to high investment costs, specific primary resource shortages, dependence on Current Status of Chinese Clean Energy Technology foreign technology, and small-scale production. Chinese research on the develoment of Clean Energy tech- nologies started in the 1980s, but the dissemination of related Wind technologies to domestic suppliers has remained relatively Several studies indicate China has 750 gigawatts (GW) of slow. However, with the rapid increase in energy demand potentially utilizable onshore wind resources (250 to 300 GW and the recent rise of energy and environmental security is- of which is commercially feasible) and over 1,000 GW of off- sues, the shift away from conventional energy has become an shore resources. The development of wind energy in China important strategic option for China and an area of potential began in the 1980s with rural electrification in coastal region, market penetration from American companies. but since 2005 Renewable Energy Law (REL), the wind energy sector has been rapidly expanding. Under the new Renewable Energy policy set forth in the REL, 15 provinces and municipalities Government policy recognized the importance of sustain- have installed 1,226 megawatts (MW) of wind energy capac- able, renewable energy, and energy efficiency only after ity, a 65.6 percent increase installed wind power in that year the 1991 application of the 8th Five-Year Plan. Renewable alone.11 As of 2006, the total wind power generation capacity energies emerged as a promising alternative to coal and installed in 16 provinces had reached 2,599 MW, doubling other fossil fuels due to accelerated economic growth the amount for 2005.12 Figure 1.5 below shows the historical and the serious environmental degradation caused by the development of installed wind power capacity in China.13 rapid increase in energy demand. In addition to the adoption of the REL, other factors have contributed to the current boom in wind energy Figure 1.3: China’s Overall Energy Demand and Output China’s Overall Energy Balance development, including: 250000 Demand 4  recent years, Chinese wind generation technology In 200000 has matured with the help of technology transfer from foreign countries;10000 TCE Output 150000 China’s wind turbine manufacturers are locally develop- 4  100000 ing technology adapted to Chinese weather conditions, 50000 Figure 1.5: Cumulative Capacity of Wind Power Installed in China, 1995–2006 0 3,000 140% 1990 1995 2000 2003 2004 2005 (2006, 105.6%) 2,599 (1997, 115.2%) 120% Year 2,500 100% (1996, 107.9%) Figure 1.4: China’s Petroleum Output and Demand China’s Petroleum Balance 2,000 1,266 80% 40000 1,500 (2005, 65.8%) 1,337 35000 Demand (2004, 34.7%) 60% Annual growth rate of 46.8% from 1995 to 2006 in China 30000 1,00010000 TON S (1998, 31.8%) 764 40% (2000, 28.4%) 25000 567 468 503 500 400 20000 268 344 20% 170 91 224 197 79 41 76 98 15000 Output 38 23 54 44 56 68 0 0% 10000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Cumulative installed capacity/MW Annual installed capacity/MW Annual growth rate/% 5000 0 Source: Li Junfeng and Gao Hu, China Wind Power Report 2007 Z(China Environmental 1990 1995 2000 2003 2004 2005 2006 Science Press). 10 U.S. Department of Commerce | International Trade Administration
  • with the goal of reducing the purchase price for wind China has developed an important PV panel produc- turbines as well as investment costs for wind farms; tion capacity. Currently, China is the third-largest PV National policy for national and provincial concessions 4  panel manufacturing country in the world behind Ger- stipulates that 70 percent of wind turbines in developer many and Japan. China’s production capacity increased tenders must be sourced from domestic wind turbine over two distinct periods. First, solar panel production manufacturers; capacity increased from 200 kilowatt peaks (kWp) before Most of the wind developers engage in wind farm 4  1984 to 4.5 MWp in 1988 as a result of technology transfer development with no profit margin or at a loss, pos- from the United States and Canada, which enabled China sibly to obtain additional wind development projects to start operating seven solar panel production lines.15 from the authorities and avoid being barred from The second hike in Chinese PV production capacity future developments. stems from the expansion of the international demand around 2002. In 2004, PV production in China reached 50 To establish a viable commercial market in wind en- MW, quadrupling the 2003 production. In 2005 and 2006, ergy production, experts have suggested additional tax PV production continued to increase from 130 to 369.5 reductions and feed-in tariffs. MWp. The actual production capacity is much higher than the current production level, which is restrained by silicon Solar PV and Hybrid Systems shortages. By the end of 2006, the total PV production The potential for solar power in China is equally promis- capacity distributed among 39 manufacturers amounted ing. Compared with other countries at the same latitude, to 1.6 gigawatt peaks (GWp).16 China has significant solar resources, amounting to 1.7 Ninety percent of China’s PV panel production trillion tons of coal received in the form of solar radia- is exported to foreign countries.17 The export of solar tion. In the period 1971–2000, total radiation ranged panels reached $1.2 billion in 2006.18 Domestic solar from 1050–2450 kWh/m2; areas with over 1050 kWh/m2 PV applications are mainly used in solar/wind or solar/ accounted for more than 96 percent of the country, and diesel hybrid systems as well as solar home system (SHS) areas with over 1400 kWh/m2 accounted for more than 60 packages for rural electrification and off-grid generation percent. The areas with the strongest resources are found in northwestern China. Good marketing has made SHS in the western and central portions of the country.14 especially popular in plateau regions under the name of By the end of 2006, the cumulative installed capacity of “sun on horseback.” Due to various factors such as high solar cells in China had reached 80 megawatt peaks (MWp) investment costs, undefined feed-in tariffs, and lack of (see Figure 1.6 below). The largest share of this capacity was fiscal incentives, a significant on-grid solar PV market found in rural electrification (43.1 percent), followed by com- has yet to materialize. munication and industrial uses. The market for photovoltaic Policy support and government subsidy programs (PV) power generation in China is mainly composed of com- have had an important impact on the development of munications, industrial applications, rural off-grid supply, domestic solar PV production capacity. In fact, 46.2 grid-connected systems, and small solar products. Among percent of the current production capacity results from these applications, rural electrification and grid-connected such programs.19 From 1998 to 2001, the Brightness generation require support from the government. Program, backed by the World Bank and the Global Environment Facility (GEF) through the RenewableFigure 1.6: Cumulative Installed PV Capacity in China Energy Development Program (REDP), promoted the installation of SHS in seven remote rural northwestern 90,000 provinces of China—Xinjiang, Qinghai, Gansu, In- 80,000 ner Mongolia, Shaanxi, Sichuan, and Tibet. In 2001, 70,000 the Chinese Government launched Song Dian Dao 60,000 Xiang (the National Township Electrification Program 50,000 [SDDX]), a continuation of the Brightness Program andkWp 40,000 an ambitious large-scale rural electrification program 30,000 targeting the same provinces. SDDX resulted in the development of 721 solar or solar/wind hybrid off- 20,000 grid power generation systems for a total capacity of 10,000 19 MW.20 The program, which ended in June 2003, has 0 provided 1.3 million people in 1,000 townships with 1976 1980 1985 1990 1995 2000 2002 2004 2005 2006 access to electricity. Under SDDX, total capital invest- Newly increased Cumulative installed capacity ment reached $600 million.21 SDDX will be followed bySource: Li Junfeng et al., China Solar PV Report 2007 (China Environmental a further phase, Song Dian Dao Cun, or the NationalScience Press). Village Electrification Program (SDDC), which was in the final design stages as of near end-2007. Clean Energy: An Exporter’s Guide to China 11
  • The Chinese Government is promoting domestic PV thermal use has increased in developing cities, suchdevelopment from the following aspects:22 as Kunming and Qingdao, market expansion is con- strained by the following factors: deficient techniques4  ollowing the Brightness Program and SDDX, SDDC will F to integrate SWH technology into buildings; lack of in- electrify another 1 million households in 20,000 villages stallation support by commercial residence developers by installing 100 MW of off-grid solar systems in remote in major cities such as Shanghai and Guangdong; and rural and pastoral areas of Tibet, Qinghai, Inner Mon- low aesthetic quality, which reduces the appeal of SWH golia, Xinjiang, Ningxia, Gansu, and Yunnan, where grid systems for some customers. extension is not feasible. The strategic scheme and the programs are being designed by China’s government Bioenergy and a related program of the World Bank. China has a vast bioenergy potential with recent average4  he government is constructing large-scale on-grid PV T biomass resource utilization above 500 million tce.27 Table power plants and solar thermal power plants in less 1.1 displays the country’s bioenergy potential per biomass developed areas in Inner Mongolia, Gansu, and Xinjiang, and provides the key production technologies. which will start from Dunhuang in Gansu and Lasha or Ali As of 2006, 39 biomass combustion facilities, with a in Tibet during the period of the 11th Five-Year Plan. In fact, total generation capacity of 1284 MW, have been approved China planned to start up the biggest solar PV power sta- by the National Development and Reform Commission tion in the desert in 2003. A pre-feasibility study had been (NDRC) and local provincial Development and Reform conducted, and the results were reported to the industry in Commissions (DRCs). These new projects have a combined Dunhuang, Gansu, in September 2003. investment of about $1.39 billion. In 2006, the planned4  he Start-up Roof PV Program involves constructing T investments resulted in the installation of 54 MW of power on-grid rooftop solar PV power generation in economi- generation capacity with no clear deadline for the instal- cally booming areas, such as Beijing, Shanghai, Jiangsu, lation of the total approved capacity. Table 1.2 displays the Guangdong, and Shandong. At present, there are more key technologies in biomass production in China and their than 10 pilot rooftop PV power stations in Shanghai with current status of deployment. a total capacity around 2,000 kW and an annual yield of Biogas utilization began in rural China during the 1970s 2 million kWh. The feasibility study on the 100,000 Roof and has made considerable progress since then. Biogas PV Program is being conducted by Shanghai Jiaotong is now widely used in small-scale household production University. The program aims to install 10,000 rooftop PV (8–10 m3 tanks). Biogas development is backed by the on-grid systems by the end of 2010 and another 90,000 central government through strong fiscal incentives as well systems by 2015.23 This attempt indicates a direction for as investment subsidies to rural households amounting to China’s on-grid PV development. about $763.04 million between 2003 and 2006.28 Under the government subsidies program, households in northwest-Solar Water Heating ern and northeastern China receive $166.5 toward theSolar thermal energy for water heating is one of the most purchase of a system; households in southwestern Chinaadvanced renewable energy technologies in China with receive $138.7: and households in other areas receivea mature commercial market. Notably, China has over $111.29 As a result, by end-2006, 17 million household bio-1,000 solar water heating manufacturers, and 95 percent gas digesters,30 140,000 municipal waste treatment facilities,of the intellectual property rights (IPR) for solar thermal and 4,000 industry sewage biogas facilities providing 1.9technologies used in China are domestically owned.24 In million m3 of biogas per year31 had been installed.the past 10 years, the growth rate for solar water heating Biogas production amounted to 500 MW in 2006, buthas reached 15 percent per year, as shown in Figure 1.7. is the potential exists for substantially more. The estimatedcurrently China’s solar water heating production surface resource potential, according to a 2002 estimate of feed-around 90 million m2, or 60 percent of the world’s total.25 stock, includes 2.5 billion tons of wastewater from indus-In fact, nearly one in 10 Chinese households owns an try and 49 million tons of solid excrement from feed lots.SWH. In 2006 alone, China installed 20 million m2 of solar There is an estimated potential of 14.5 billion m3 per yearthermal production. However, the increase in installed of industrial-scale biogas, of which 10.6 billion m3 comesolar thermal surface lags behind the equipment produc- from industry, 2.7 billion m3 come from large feedlots,tion capacity, which has an annual increase rate of 28 per- and 1.2 billion m3 come from small livestock farms. It iscent.26 In 2006, the domestic production capacity stood at estimated that the above could be used to generate 3.86 million m2. The excess production is currently exported GW of base load electricity with 23 TWh of electricityto Europe and Southeast Asia. potential or could be used like natural gas for support- Manufacturing standards and product quality for ing peak load periods. The estimated potential in 2020 isSWH systems are increasingly rigorous with newly vastly higher, including 41.5 billion m3 of industrial-scaledeveloped national testing centers and a national cer- biogas, comprising 21.5 billion m3 from industry and 20tification center for SWH technologies. Although solar billion m3 from livestock farms. This would amount to12 U.S. Department of Commerce | International Trade Administration
  • an installed capacity potential of 13.8 GW, assuming an The government aims to increase biogas utilization by efficiency-of-conversion increase. Only 1.2 billion m3 out improving rural liming conditions and by promoting the of the current 14 billion m3 industrial-scale biogas po- livestock and poultry industries, industry waste biogas, tential is currently being used; most of the gas produced and city sewage treatment. is vented, since the industry is focus on waste treatment Liquid biofuel technology is also in an early stage and not energy production. Therefore, the potential for of development. China does however have important the industrial biogas industry is huge and, with only bioethanol potential based on sugarcane, cassava, corn, about 10 percent being exploited, largely untapped. and broomcorn cultures. In accordance with the 10th Five-Year Plan, national Program 863 targeted develop-Figure 1.7: Total Installed Capacity of SWH in China ing technologies for making bioethanol from broomcornAccumulate solar thermal installed areas and similar cellulose waste such as corn stalk. Biodiesel development is also included in Program 863 as of themill. m2 11th Five-Year Plan, but is still at the research stage. Its120 commercialization will depend on production cost re- ductions and increased conversion rates. Several demon-100 strations of biofuel have begun in Guangxi, Chongqing, and Sichuan, with cassava as the resource; demonstra- 80 tion stations in the Northeast and Shandong are being constructed with broomcorn. 60 Small Hydro According to Chinese domestic regulations, small hydro- 40 power (SHP) refers to a power generation capacity lower than 50 MW. The total potential for SHP stations in China 20 is estimated at 71.87 GW and is distributed among more than 1,600 mountain counties in middle and western China (see Figure 1.8 below). The potential for SHP is 0 especially important in western China, where 70 percent 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 of the unelectrified rural population is located. China began utilizing small hydro for rural electrifica-Data: Signifficient effect of solar thermal in energy conservation and emission reduction. tion in the early 1960s. So far, around 800 counties have beenSource: Luo Zhentao and Huo Zhenchen, Outstanding Effect of SWH in Energy Conserva- electrified with SHP stations connected to local transmissiontion. (Solar Thermal Utilization Association of China Rural Energy Industry Association, grids. By the end of 2004, however, only 2.1 percent of theNovember 2007); Solar Energy, November 2007. total SHP potential had been developed in western China.32 Table 1.1: Biomass Potential in China by Source By the end of 2006, there were more than 40,000 SHP sta- tions installed in rural China with a total power generation Annual Potential Resources Remarks capacity of 50 GW and an annual yield of over 150 terrawatt (tce) hours (TWh).33 Figure 1.9 below shows the developed and Straw & stalk 150 million remaining potentials for SHP power generation per region. Waste water 57 million 80 billion m3 biogas SHP is one of the mature renewable energy technolo- Wood 300 million gies in China, with a significant domestic manufacturing Urban garbage 13 million 120 billion tons capacity and competitive export potential in Asia. This is Source: NDRC, Mid- and Long-term Renewable Energy Development Plan, the result of strong fiscal support from the central gov- August 2006. ernment. SHP manufacturers benefit from significantly Table 1.2: Key Technologies in Biomass Production and Current Status Utilization Technologies Status in 2006 Remarks Power generation Combustion (CHP) 1700 MW Biogas 500 MW Landfill & gasification 30 MW Clean fuel Biogas 9 billion m3 For rural life Biodiesel Key project in Program 863 from Clean biofuel Research Bioethanol 11th FYP Source: NDRC, Mid- and Long-term Renewable Energy Development Plan, August 2006. Clean Energy: An Exporter’s Guide to China 13
  • Figure 1.8: Total Potential for SHP in China away from light industry toward heavy industry, which has a comparatively lower end-product value for higher energy consumption. Figure 1.10 shows China’s energy Technical potential of SHP in China consumption by sector over the past six years. Table 1.3 compares China’s energy efficiency to the 18.50% international average for major industrial products. Western China The level of energy efficiency for all industrial products 17.80% is included in Table 1.3 and is much lower than the overall Eastern China international average. This is especially obvious for crude oil 63.60% Middle China refining, as well as ethane and paper and cardboard produc- tion. Operation efficiency for end-use equipment in China is generally 20 percent lower than the international average for Data: Status and Prospect of China’s SHP Technology advanced countries, as shown in Table 1.4 below. The discrepancy in EE between China and the international average is mainly due to obsolete produc- Source: “Current Status and Prospect of China’s SHP,” presentation of Interna- tional Workshop on China Renewable Energy Strategy Development, August 16, tion equipment installed several decades ago, which has 2006. received little or no maintenance and has been poorly managed for the last 20 yearFigure 1.9: Development Potential for SHP in China To improve energy performance, the Chinese Government set an ambitious target to decrease energy10 MW Not developed Developed2500 intensity by 20 percent in the 11th Five-Year Plan pe- riod, which spans from 2006 to 2010. Ten key programs2000 in eight intensive industries are planned by the NDRC1500 and provincial governments to achieve the target (details are provided in the EE market forecast section),1000 including the annual publication of each province’s 500 energy intensity. 0 Co-Generation Shanxi IMAR Liaoning Jilin Heilongjiang Zhejiang Anhui Fujian Jiangxi Henan Hubei Hunan Guangdong Guangxi Halnan Chongging Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Xingjiang In China, the use of combined heat and power (CHP) generation for heat supply began in the 1950s. At its maxi- mum development in the 1980s and 1990s, CHP genera- tion made an important contribution to national energySource: “Current Status and Prospect of China’s SHP,” presentation of International savings. Despite a relative decline, CHP remains a majorWorkshop on China Renewable Energy Strategy Development, August 16, 2006. heat supply source in China. Political constraints often hamper the development of lower value-added taxes–currently at 6 percent, com- CHP generation. Heat generation from CHP falls within pared to 17 percent for other sectors. By 2004, there were provincial or local jurisdiction, whereas electricity gen- over 100 SHP manufacturers in China, with an annual eration is subject to central government feed-in policies. production capacity of around 6.3 GW. Because of its clean power generation process and high Development of hydropower is focused on the areas of efficiency, CHP receives support from local and provincial the Jinshajiang River, the Yanpanjiang River, the Daduhe River, upstream of the Huanghe River, and the Nujiang Figure 1.10: China’s Energy Consumption by Sector from 1990 to 2005 River basin. To accelerate the development of SHP, the 100 mkwh Chinese Government is combining rural electrification 30000 with the SHP Generation Fuel Program, as well as export- Non-production consumption ing electricity from Tibet. 25000 Others 20000 Wholesale, Retail Trade, Energy Efficiency Hotels + Catering Services In general, production and operation energy efficiency 15000 Transport, Storage and Post is low in China. Recently, energy efficiency (EE) has 10000 Construction decreased due to the growing industry sector, which has Industry the lowest energy efficiency level. Seventy-five percent 5000 Farming, Forestry, Animal Husbandry, of the total energy consumption increase comes from 0 Fishery and Water Conservancy the industrial sector.34 In the past six years, energy ef- 1990 1995 2000 2003 2004 2005 ficiency has further decreased as a result of the shift Data: NBSC, Statistic Yearbook 2006 14 U.S. Department of Commerce | International Trade Administration
  • authorities. However, because of its low electricity yield, Clean Transportation TechnologyCHP has not received central government support through Before 1993, China’s national energy output in liquidfeed-in tariffs. In addition, up until 2005, CHP was catego- fuel was higher than domestic consumption. Incentivesrized as small-scale thermal power generation with no grid for the development of clean fuel transportation tech-connection possibility. nology were small, and research was not significant. As a result of the mixed political signals from local/pro- Research on clean fuel transportation technology reallyvincial and central governmental levels, as well as sustained began in the second half of the 1990s, with governmen-growth of coal utilization and inconsistent electricity tariff tal support to universities but without private-sectorincreases, CHP has faced extra difficulties. Since 2002, 90 per- involvement. The turning point occurred in 1999, whencent of China’s domestic CHP operators have faced losses.35 China’s Ministry of Science and Technology (MOST)The situation is similar for foreign operators as French and launched the Clean Vehicles Action Program, a demon-American investors have retreated from China’s CHP market stration and development program for large-scale cleansince 2004. According to recent data from NDRC, CHP instal- transport technology that is currently in operation.lations make up almost 50 percent of the power plants closed Figure 1.12 below displays the program’s operationalsince the beginning of 2007.36 Figure 1.11 displays the status organization chart.of CHP generation in China as of 1998.Table 1.3: Comparison of Energy Efficiencies for Major Products between Chinese Domestic and International Averages Energy Efficiency Product Type China International Discrepancy in 2004 Average * 1990 2000 2004 Absolute % Power plant electric supply coal consumption (gce/kwh) 392 363 349 299.4 49.6 16.57 Thermal power generation coal consumption (gce/kwh) 427 392 376 312 64 20.51 Alternating current consumption for electrolytic 16233 15480 15080 14100 980 7.00 aluminum (kwh/t) Steel (large plants) (kgce/ton) 997 784 705 610 95 15.57 Cement (kgce/ton) 201.1 181 157 127.3 29.7 23.33 Crude oil refining (kgce/ton) 102.5 118.4 112 73 39 53.42 Ethene (kgce/ton) 1580 1125 1004 629 375 59.62 Synthetic ammonia (large-scale production) (kgce/ton) 1343 1327 1314 970 344 35.46 Paper and cardboard (kgce/ton) 1550 1540 1500 640 860 134.38Source: Qinyi Wang, International Petroleum Economics, 2006, No.2.* Data are for the advanced counties in 2003.Table 1.4: Discrepancy in Operational Efficiency of End-Use Equipment between China and the International Average End-use Equipment Operational Efficiency % Discrepancy with International Average, % Boilers in industry 65 15–20 Middle and small-size motors 87 (design) 20 (operation) Fans and pumps 75 (design) 20 (operation) Vehicles 9.5 L/100 km 25 (European) Trucks 7.6 L/100 ton km 100 Fluvial navigation — 10–20Source: Yu Cong, China’s Successful Case of Energy Efficiency in Industry (Energy Research Institute, NDRC, April 3, 2007).Clean Energy: An Exporter’s Guide to China 15
  • Gas-Powered Vehicles Figure 1.12. Organizational Chart for Clean Vehicles Action Program Gas-powered vehicles (GPVs) have come into operation 19 Cities and since related technologies (e.g., gas storage systems) have CNG, LPG Provinces Trial , Demonstration matured – the GPVs presently on the market are third- and Promotion to business 9 Provinces and generation products. GPV technologies have now been Ethanol Fuel areas introduced in 17 large cities and two provinces (Sichuan and Hainan—see Figure 1.13), and total a 265,000 unit Electric Some enterprises universities, , Preliminary trial in Beijing vehicle fleet. GPV technology is expected to go into large- scale production in the near future. Hydro-power Some enterprises universities, , Preliminary trial in Beijing Fleet growth is faster for CNG vehicles than LPG ve- hicles. Recently, the CNG fleet grew at an average of 30,000 Bio-diesel/ cars per year, from 22,300 in 2001 to 174,170 in 2006; reach- Some research institutes , Biomass-to- liquid (BTL) universities, feasibility studies ing 66 percent of the GPV fleet (see Figure 1.14). Research, Trial, Demonstration China began its alcohol fuel vehicles (AFVs) develop- LNG WuLuMuQi , ChangSha and Beijing demonstration ment about 30 years ago. Initially, ethanol fuel vehicle pilots were formally launched in five cities (Nanyang, Methanol Small demonstration in coal- DME Zhengzhou, and Lyoyang Nanyang in the province of forming areas, cooperation in motor R& D by enterprises and Henan; Ha’erbin and Zhaodong in the province of Hei- Coal to universities longjiang) to be later extended to five provinces (Jilin, Liquid (CTL) Liaoning, Heilongjiang, Henan, and Anhui) and parts of Source: China Automotive Technology and Research Center, CATRC other provinces (Jiangsu, Hebei, Shandong, and Hubei— see Figure 1.15). Recently, the planned production level major Chinese cities, including Beijing and Shanghai. for ethanol fuel was set at about 1 million tons per year. Methanol gasoline fuel was primarily applied in Shanxi Fuel Cell Electric Vehicles Province. Research on di-methyl ether (DME) fuel pro- Many of China’s research institutions have invested in duced through clean coal technology is only beginning. proton exchange membrane fuel cell (PEMFC) research and development since the 1990s, with the main research Electric Vehicles projects conducted in: Government support for electric vehicle (EV) research and development started early in the 1990s. The many 4 Dalian Institute of Chemical Physics; research projects conducted since that time have not 4 Beijing FuYuan Pioneer New Energy Material Co., Ltd.; gone past the experimental stage with manufacturing 4 Shanghai Sun Li High Technology Co., Ltd; trials, as EV technology applications are still limited 4 Beijing Lu Neng Power Sources Co., Ltd. by low power capacity and autonomy as well as high production costs. From 2001 to 2005, MOST approved a RMB 880 mil- Nonetheless, market growth for electric bicycles has been lion ($122 million) research and development program impressive. There were over 1,200 electric bicycle manufac- to develop advanced hybrid electric fuel cell vehicles. turers and 3,000 parts suppliers in 2005, for a total production Private sector investment is expected to bring in another of about 10 million units. This dramatic growth is largely due $200–300 million from 2005 to 2010. to legislation banning gasoline-fueled scooters in several In March 2003, the Chinese Government launched a demonstration program in Beijing for fuel cell busFigure 1.11: Status of CHP in China commercialization. This program is backed by theCapacity (KW) CHP Status in China Portion (%) United Nations Development Program (UNDP) and the3000 14 Global Environment Facility (GEF) as part of a demon-2500 12 stration project for 46 Daimler Chrysler–manufactured 10 Citaro buses involving five countries and six cities over2000 2003–2008. The MOST and the municipal authorities 81500 signed the supply contract for three fuel cell buses with 6 Daimler Chrysler in May 2004.1000 4 500 2 0 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Coal-fired capacity CHP capacity CHP compositionData: Wang Zhenming, Potential Analysis on CHP China 16 U.S. Department of Commerce | International Trade Administration
  • Figure 1.13. Compressed Natural Gas (CNG) and Liquefied Figure 1.15. Distribution of AFV Development Petroleum Gas (LPG) Demonstration Areas Haerbin Heilongjiang Changchun Urumchi ShenYang Jilin BEIJING Yinchuan ★ Dandong Tianjin Liaoning LangFang Heibei Lanzhou Puyang Shanxi Jinan Qingdao Shandong Heinan Jiangsu Xian Shanghai Hubei Anhui Sichuan Province Chongqin Dissemination of ethanol in part cities Dissemination of ethanol in CNG demonstration city whole province Guangzhou LPG demonstration city Demonstration province of methanol CNG, LPG demonstration city Hainan Province Source: database of China Automotive Technology and Research Center, Source: database of China Automotive Technology and Research Center, CATRC CATRC Figure 1.14. Breakdown of GPVs in China Gas Power Vehicles in China 30.00 25.0010,000 Units 20.00 15.00 10.00 5.000 0.00 2001 2002 2003 2004 2005 2006 CNG LNG LPG Source: database of China Automotive Technology and Research Center, CATRC Clean Energy: An Exporter’s Guide to China 17
  • n Chapter 2: Market AnalysisChina’s clean energy technology market is booming, with 2007, the average annual growth rate was 97 percent. As asignificant domestic production capacity. There are cur- result, the total installed capacity for wind power genera-rently over 80 wind turbine manufacturers and 200 wind tion reached 5 GW in 2007, three years ahead of the goaldevelopers in China; domestic companies occupy over 75 set forth in the plan.37percent of the domestic market. China’s solar industry is The solar water heating market is also rapidly ex-growing rapidly, with a current capacity of 2,500 tons per panding. Based on the recent annual surface installationyear in solar ingot production. Significantly, there are over increase of 15 percent, the objective for 2010 of 150 million3,500 solar water heating (SWH) system manufacturers in Table 1.6: Objectives for Key RE technologies.China, representative of the fact that China has the largestSWH market in the world. Finally, China’s energy efficien- Objectives Objectives RE Utilizationcy market is booming as a result of the goals set forth in by by 2020the 11th Five-Year Plan. The major Chinese market players Hydropower Large scale 140 GW 225 GWin wind, solar PV, SWH, hydropower, and energy efficiencyare given in Annex 1. Small scale 50 GW 75 GW Bioenergy Generation 5.5 GW 30 GWRenewable EnergyPresently, total renewable energy utilization reaches Solid biofuel 10 bil. tons 50 bil. tonsonly 7.5 percent of China’s energy consumption. How- Biogas 19 bil. m3 44 bil. m3ever, the potential renewable energy market is vast. As acomponent of China’s energy strategy, the development Bioethanol 2 mil. tons 10 mil. tonsof renewable energy receives support from the central Biodiesel 0.2 mil. tons 2 mil. tonsgovernment through a Mid- and Long-term RenewableEnergy Development Plan, which has been released to Wind Generation 5 GW 30 GWimplement the REL. On-grid solar Solar * 150 MW 1.5 GW The Mid- and Long-term Renewable Energy Devel- PVopment Plan draws an ambitious blueprint for China’s Off-grid solar 150 MW 0.3 GWrenewable energy development. The plan emphasizes PVrenewable energy development for hydropower, biogas, Solar thermal 150 mil. m2 300 mil. m2solar thermal, and geothermal technologies as maturetechnologies with high potential for economic benefits. Geothermal 4 mil. tce 12 mil. tceWind, biomass, and solar PV power generation are alsoearmarked for accelerated development. According to Data: NDRC, Mid- and Long-term Renewable Energy Development Plan, August 2006.the plan, renewable energy utilization should reach 300 * Total solar PV installation includes both on-grid and off-grid generationmillion tce by 2010 and 600 million tce by 2020, as shown Tables 1.5 and 1.6 below. The mid- and long-term pro-jections from the plan indicate that the clean technology Table 1.7: Government Objectives for Renewable Energymarket will increase to $185.9 million in 2010 and approxi- Market Potentialmately to $554.94 million in 2020 (see Table 1.7 below). Market po- Market po- Estimated Market development for some of the renewable energy Resources tential until tential until Investmenttechnologies has surpassed the targets established by the 2010* 2020* CostsMid- and Long-term Renewable Energy Development Hydropower $76.3 billion $180.36 billion $971.14/kWPlan. China’s wind power generation capacity has expe-rienced a steady increase since 2000. Between 2002 and Biomass $3.47 billion $27.75 billion $971.14/kW generation Wind $1.09 billion $23.86 billion $901.78/kWTable 1.5: Goals for RE Utilization in RE Development Plan Biogas $11.38 billion $26.36 billion $416.2/hh Proportion of Solar $240 million $18.04 billion $10,405/kW Timeline Utilization Energy Consumption Others $92.95 million $277.47 million 2010 300 million tce 10% 2020 600 million tce 15% Data are from Mid- and Long-term Renewable Energy Development Plan. * Data for 2020 are from NDRC, Mid- and Long-term Renewable Energy Development Plan, August 2006. Data for 2010 are calculated on the basisData: NDRC, Mid- and Long-term Renewable Energy Development Plan, of estimated investment cost and estimated generation capacity from 2006August 2006. to 2010.Clean Energy: An Exporter’s Guide to China 19
  • m2 production surface (as established in the Mid- and Guangdong and Shandong. At present, there are more Long-term Renewable Energy Development Plan) should than 10 pilot roof PV power stations in Shanghai with a be attained easily, as shown in Figure 1.16 below. total generation capacity of 2,000 kW and an annual yield The domestic market for solar PV generation is rela- of 2 million kWh. Feasibility studies for the 100,000 Roof tively undeveloped compared to the markets for wind PV Program are currently being conducted by Shanghai and solar water heating. China’s government however is Jiaotong University. The objective of this program is to making efforts to promote a domestic solar PV generation install 10,000 rooftop PV on-grid systems by the end of market including the following programs: 2010 and another 90,000 systems by 2015.40 According to industry experts, one of the bottlenecks for large-scale Government subsidy programs: Although the Brightness 4  on-grid application of solar PV generation is related Program and SDDX have significantly improved rural difficulties in establishing the appropriate feed-in tariffs electrification through solar PV generation, 3 million to stimulate the market. The Shanghai Roof PV Program households in target areas remain without electricity. It provides the opportunity to fine-tune feed-in tariff poli- is expected that 1.5 million households will be electrified cies for solar PV on-grid generation. through grid extensions as well as small and mini-hydro installations, but the remaining 1.5 million households According to Tsing Capital in Beijing,41 when combined will need to be electrified through solar PV and solar/ with the environmental protection field, the market value wind hybrid systems.38 The Village Electrification Pro- of the clean tech industry totals over $200 billion. In the gram (SDDC) was to originally electrify 1 million house- renewable energy sector, $2.8 billion has been invested in holds in 20,000 villages by installing off-grid solar systems wind, $8.1 billion in solar thermal energy, $1.7 billion in solar with a 100-MW total generation capacity in remote rural PV, $3.1 billion in ethanol, and $1.3 billion in biodiesel. An areas of Tibet, Qinghai, Inner Mongolia, Xinjiang, Ningxia, additional $172 billion has been spent on environmental pro- Gansu, and Yunnan;39 however, the final plan and design tection. Tsing Capital predicts energy generation will become for this program has yet to be confirmed. the most popular segment of clean tech venture capital in the Construction of PV power stations: Plans have been 4  2007–2008 period, followed by water and energy efficiency. made for the construction of large-scale on-grid PV power plants and solar thermal power plants in desert Energy Efficiency areas of Inner Mongolia, Gansu, and Xinjiang Provinces. In October 2005, Premier Wen Jiabao announced that China’s The first plants will be constructed before the end of the energy intensity over the national GDP must decline by 20 11th Five-Year Plan period in Dunhuang in the province percent between 2005 and 2010. The key policy initiatives to- of Gansu and in Lasha in the province of Tibet. The con- ward reaching this goal were an emphasis on domestic tech- struction of the world’s biggest solar PV power station nological innovations with planned leaps in key areas, close has been actively planned since 2003. monitoring of current global technological developments, Start-up Roof PV Program and 100,000 Roof PV Program: 4  and leadership initiatives in emerging strategic sectors. the Start-up Roof PV Program promotes the construction The new energy efficiency targets were included in of on-grid roof solar PV power generation in areas with the 11th Five-Year Plan. Planned reductions in energy dynamic economies such as Beijing, Shanghai, Jiangsu, intensity for the industrial sector account for 80 percent of total reduction targets. Reductions in industrialFigure 1.16: Solar Water Heating Forecast Through 2020 Based on energy intensity will depend on the GDP growth level,an Estimated Annual Growth Rate of 15 percent with the planned reduction in energy intensity at 24 m2 percent for a 7.5 percent GDP annual growth and a 261200 percent reduction for a 9 percent GDP annual growth. The energy efficiency reduction targets are ambitious,1000 and the challenge is to define appropriate measures and policies to reach the objectives. At present, China’s 800 central government has taken or will take the following 600 operational measures: 400 4  forward a series of structural adjustment policies in Put various industrial sectors and sub-sectors; 200 Lower or cancel tax rebates on high-energy-intensity 4  0 production exports; 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Implement the Top-1,000 Enterprises Energy Efficiency 4  Program, which plans for the 1,000 highest energy- Accumulate installed areas Annual installed areas consuming enterprises in China to reduce their energyData: Based on scheme on promoting solar thermal in China, International Energy Net consumption by 100 million tce from 2005 to 2010; 20 U.S. Department of Commerce | International Trade Administration
  • Promote the application of mature high-energy-4  energy efficiency of mass-market products with high-en- efficiency technologies; ergy consumption should reach the mid-1990s’ interna- Eliminate inefficient processes and appliances.4  tional average for developed countries. Targets are more ambitious for some products such as automobiles and According to the energy efficiency targets, the envi- specific electric appliances for household use, whoseronmental impact of key energy-consuming sectors and energy efficiency should now be almost on par with theunit energy consumption indicators for China’s main current international average for advanced countries.products should reach the international average in the Table 1.10 shows the 10 energy consumption programsfirst quarter of this century. According to the plan, the put forward by the NDRC to reach the energy efficiencyTable 1.8: Unit Energy Consumption Indicator for Main Products 2010 Products Unit 2000 2005 (planned) Coal consumption for thermal power supply tce/kwh 3.92×10-4 3.70×*10-4 3.55×*10-4 Energy consumption per ton of steel tce/t 0.906 0.760 0.730 Comparable energy consumption per ton of steel tce/t 0.784 0.700 0.685 Specific energy consumption of 10 kinds of nonferrous metal tce/t 4.809 4.665 4.595 Specific energy consumption for aluminum tce/t 9.923 9.595 9.471 Specific energy consumption for copper tce/t 4.707 4.388 4.256 Oil refining unit energy factor tce/t.factor 0.014 0.013 0.012 Specific energy consumption of ethylene plant tce/t 1.296 1.070 0.993 Specific energy consumption by synthetic ammonia tce/t 1.372 1.210 1.140 Specific energy consumption by soda tce/t 1.553 1.503 1.400 Specific energy consumption by cement tce/t 0.181 0.159 0.148 Specific energy consumption by construction ceramics tce/m2 0.01004 0.0099 0.0092 Specific energy consumption by railway transportation tce/mt km 0.01041 0.00965 0.0094Data from NDRC, 11th Five-Year Energy Plan. targets. These programs have been identified by theTable 1.9: Energy Efficiency Indicators for Main Energy central government as the most effective means by whichConsumption Equipment to reduce energy consumption as technology becomes 2010 Products Unit 2000 mature within these areas. (planned) Coal-fired industrial boilers The 20 percent energy savings targets established for % 65 70–80 (operational) the next five years seem difficult to achieve, but there is Small and medium-size substantial potential to conserve energy throughout China’s % 87 90–-92 generators (design) well developed supply chain, including energy extraction, Wind turbines (design) % 70–80 80–-85 conversion, transport, storage, distribution, and end use. Pumps (design) % 75–80 83–-87 On the other hand, it is an ambitious target that will require Air compressors (design) % 75 80–-84 much capital, suitable market mechanisms, subsidies, and the cooperation of energy-intensive industries to Room air conditioners 2.4 3.2–-4 curb demand. Currently the national energy reduction (energy efficiency rate) rate stands at only 1.23 percent, and only Beijing met the Refrigerator energy ef- % 80 62–-50 projected energy consumption reduction in 2006 out of all ficiency indicator (EEI) 34 provinces and municipalities. Cookstove for household Since then, China’s central government has placed % 55 60–-65 use (heat efficiency) greater attention on energy saving and places it as an equal Gas water heater for house- priority with economic development when assessing the % 80 90–-95 hold use (heat efficiency) leadership of the governors of provinces and municipalities. Economic status of average L/100 Since 2006 more and more measures have been successively 9.5 8.2–-6.7 automobile (fuel burning) km issued by NDRC to guarantee the planned savings target,Data from NDRC, 11th Five-Year Energy Plan. and more capital was invested in the energy efficiency field in 2007. At the end of 2007, China had achieved a 3 percentClean Energy: An Exporter’s Guide to China 21
  • Table 1.10: The 10 Key EE Programs Put Forward by NDRC and 200 GW in 2020, 22 percent of the total electricity genera- tion capacity. To achieve these objectives, the average capac- Projects Focus ity installed annually must be around 9 GW through 2020.43 Coal-fired industrial Low-efficiency industrial boilers: Based on the currently installed production capac- boiler alteration alteration or replacement ity and the current 6.5 percent average annual growth for Heating CHP, industrial CHP, distrib- CHP generation in China, the total CHP generation capac- Regional CHP projects uted CHP, CHCP, integrated utilization ity will reach 47 GW in 2010 and 87.5 GW in 2020, corre- thermal power plants sponding, respectively, to 37 percent and 68.5 percent of Equipment alterations for surplus the total CHP potential. Surplus heat and heat, pressure, and energy utilization pressure utilization in building materials as well as in projects Clean Transportation Technology steel and chemical sectors In 2006, China’s vehicle fleet totaled roughly 40 million Electricity, petroleum, petrochemi- Petroleum units — it is expected to reach 140 million in 2020 (see cal, building material, chemical, and conservation and transportation; promoting biodiesel Figure 1.17). This increase is caused by a reduction in car alteration projects and bioethanol prices, due to lower tariffs since China joined the World Alteration of low-efficiency motors, Trade Organization (WTO). Car price reductions are ex- EC alteration on drag equipment of pected to continue as China develops a significant domes- Energy conservation motor systems, timing alteration on tic production capacity, with the government identifying (EC) on motor systems large and mid-sized variable motor the car industry as a “pillar industry.” Another important systems driver for the expansion of the domestic vehicle fleet will Systematic EC alteration in oil refin- be the increase in consumer purchasing power. Energy system ing, ethylene, synthesis ammonia, optimization The rapid expansion of the vehicle fleet will undoubt- and steel factories edly increase demand for oil. Based on reference sce- Improving the EE of buildings by narios, oil consumption for transportation is expected 50%, EC restructuring for the existing to exceed 50 percent of the total domestic oil demand by buildings, integrating RE in buildings EC in buildings 2020. The Chinese Government has set targets to limit construction, promoting EC in wall materials, and industrializing the EC the oil demand to 125 million tons in 2020, with plans to building material reduce the oil demand by 20 percent through use of clean transportation technology, as shown in Figure 1.18. Improving product quality, reducing Green lighting costs, promoting innovations on EC lamp Market Drivers According to the most recent “BP-Statistical Review of EC restructuring of existing buildings, World Energy,” China is now the world’s second largest EC for govt. EE alterations on electrification, energy consumer behind only the United States. Their organizations supervision for new building energy consumption accounts for an astounding 15.6 EC monitoring and Alteration of EC monitoring equip- percent of world’s entire energy total. Since 2001, China’s technology service ment; energy audits for energy-inten- elasticity ratio for energy consumption averaged around 1, systems sive enterprises meaning any rise in GDP depends on a rise in energy con-Data from NDRC, 11th Five-Year Energy Plan. sumption. As a result, China’s 2006 GDP increase of 10.7 percent caused energy consumption to rise by 8.4 percent,reduction in energy consumption. 2008 will most likely be an Figure 1.17: Projections for the Number of Vehicles inimportant year for the energy-saving target, since the benefits China (in tens of thousands)of many big energy efficiency projects will begin to be seen. It 18000is also the middle of the 11th Five-Year Plan. 16000 5100 8800 14200Co-Generation 14000With the development of the 10 key energy conserva- 12000tion programs put forward by the NDRC (under the 1000011th Five-Year Plan as shown in Table 1.10 above), co- 8000generation has been identified as an important energy 6000conservation technology for reducing coal consump- 4000tion. One expert estimates that CHP can save 48 million 2000tce per year in China.42 0 According to China’s CHP development plan, the 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020installed CHP generation capacity should reach 120 GW by2010, 15 percent of the total electricity generation capacity, Source: China Automotive Technology and Research Center (CATARC).22 U.S. Department of Commerce | International Trade Administration
  • Figure 1.18: Vehicle Fuel in 2020 Figure 1.19: China’s Share of Global Production (2006)300 Flat Glass 49% Energy efficiency saving 250 m toe250 Clean Transportation replace Cement 48% Oil demand Steel 75 m toe (30%) 35%200 Aluminum 28%150 50 m toe (20%) Passenger Cars 11% Ethylene 8%100 73 m toe 125 m toe (50%) Semiconductors 7% 50 GDP 6% 0 Patents* 0.8% 2005 2020 0% 10% 20% 30% 40% 50% 60% Data from CATARC, 2006. Source: Daniel H. Rosen and Trevor Houser, China Energy: A Guide for the while the global increase was only 2.4 percent.44 This is in Perplexed (Peterson Institute for International Economics, May 2007). large part due to the increasing demand China’s energy consumption due to urbanization and economic growth. Table 1.11: Trends in Industrial Energy Demand (mToe) Figure 1.19 demonstrates, steel, aluminum, cement, and chemicals manufacturers have been the beneficiaries 2005– 2005– 1990 2005 2015 2030 of the growing demand for heavy industries and energy 2015* 2030* intensive products.45 Total energy 242 478 833 1046 5.7% 3.2% The industrial production capacity however far ex- Iron and steel 42 132 260 273 7.0% 2.9% ceeds domestic demand as the Chinese Government has Non-metallic turned to exports to sustain economic growth and main- 56 109 157 142 3.7% 1.1% minerals tain profit margins. This “workshop of the world” mental- Chemicals and ity has led industrial energy demand to grow to 70 percent 38 74 119 127 4.9% 2.2% petrochemicals of total domestic energy consumption. These drivers will continue to impact China’s energy Other 106 163 298 504 6.2% 4.6% demand going forward. The huge urban market demand CO emissions 2 800 1430 2186 2373 4.3% 2.0% and booming investment in energy-intensive heavy (Mt) industries together ensure a sustained energy consump- Source: IEA, World Energy Outlook 2007. tion increase over the long term, as shown in Table 1.11. Shortage of Liquid Fuel and High Dependency on Imports nitrogen oxide (NOx) emissions could reach 40 mt and 35 In 2006, China consumed 350 million tons of crude mt, respectively, in 2020 if no additional control mea- oil, up 6.7 percent from 2005, while its oil output rose sures are taken. Figures 1.21 and 1.22 display the areas 1.6 percent to 183.7 million tons. Oil imports for 2006 affected by SO2 discharge in China and the expected coal reached 169 million tons, indicating a dependence on consumption to 2020, respectively. imports of 47 percent.46 The World Bank estimates the total cost of air and water According to the IEA, the share of oil imports will ac- pollution in China in 2003 was $50.22 billion, or about 2.68 count for 70 percent of the total oil consumption in China percent of the GDP. According to conservative estimates, the by 2020, with the trend continuing until 2030. In 2020, economic burden of premature mortality and morbidity as- China’s crude oil production will reach its peak at approxi- sociated with air pollution was $21.82 billion in 2003, or 1.16 mately 200 million tons. As Figure 1.20 shows, after 2020, percent of the national GDP. Another evaluation of the health production will decrease, and the gap between the domes- losses due to ambient air pollution using willingness-to-pay tic oil demand and production will expand rapidly. measures estimates the cost at 3.8 percent of the GDP.48 Acid rain areas occupy over one-third of the country’s Environmental Concerns soil surface. Acid rain is estimated to cost $4.16 billion in crop Coal dominates China’s energy supply, creating severe damage and $971.14 million in material damage annually.49 pollution. Sulphur dioxide (SO2) discharge exceeded 25 More than 90 percent of the coal-burning plants are not million tons in 2005. In 2007, SO2 and dust discharge equipped with desulphurization units. Coal exploitation has exceeded 80 percent of the gross discharge total resulting caused land collapse of over 988,421 acres. Annual sewage mainly from energy consumption and domestic energy discharge from coal exploitation amounts to 3 billion m3. production.47 According to the World Bank, SO2 and Mine exhaust emissions amount to 9–12 billion m3.50 Clean Energy: An Exporter’s Guide to China 23
  • Water pollution is also a cause for serious concern. Mechanism (CDM) markets in the world. Currently, Between 2001 and 2005, 54 percent of surface water 2,701 CDM projects are in the pipeline. resources were deemed unsafe for human consump- The Clean Development Mechanism (CDM) is one tion.51 Estimates suggest the cost of groundwater deple- of China’s most important avenues for clean energy tion is around $6.94 billion per year. Cost estimates for and advanced technology transfer. It provides not only polluted water usage by industry are comparable in additional venture capital, but also incentivizes other na- magnitude, bringing the overall cost of water scarcity tions to invest in Chinese power generation and increase associated with water pollution to $20.4 billion, or Chinese efficiency. In October 2005, the National Coordi- about 1 percent of GDP. nation Committee on Climate Change (NCCCC) released their “Measures for Operation and Management of Clean Important Greenhouse Gas (GHG) Emissions Development Mechanism Projects in China” program, According to the IEA, China overtook the United States which highlights the special rules for regulation of CDM as the world’s largest carbon dioxide (CO2) emitter in developments in China, as follows: 2007 (Figure 1.23), though its per capita emissions will reach only 60 percent of those of the OECD countries in a. Priority areas for CDM development in China are: 2030. Since the Kyoto Protocol came into force in 2005, China has become one of the largest Clean Development 4 Energy efficiency improvement projects; 4 Development and utilization of new and renewable Figure 1.20: China’s Oil Balance energy; mb/d 4 Methane recovery and utilization. 18 16 b. If no foreign buyer has been determined when a project is submitted to NDRC for approval, which implies that the 14 price of credits for emission reductions (CERs) is not fixed, 12 the Project Design Documentation (PDD) must indicate 10 the emissions reductions for the project will be transferred 8 into China’s national account in the CDM registry and 6 can be transferred back out only with the authorization of 4 China’s National Designated Authority. 2 0 c. Only Chinese-funded projects or Chinese-holding 2000 2005 2010 2015 2020 2025 2030 enterprises are qualified to become the owner of CDM projects. To ensure the technology transfers to China, the Domestic production Net imports joint ventures seeking approval from NDRC must conform Source: IEA, World Energy Outlook 2007. to the “51/49” ownership rule. d. Because CERs are owned by the Chinese GovernmentFigure 1.21: SO2 Discharge in China and the emissions reductions generated by specific CDMEnvironments pollution caused by resource and energyproduction and consumption has resulted in heavy load Figure 1.22: Continued Reliance on Coalof environment Continued reliance on coal % total primary 1600 energy 57% mln tonnes oil equiv per yr 1200 800 69% 100–180 70–100 400 30–70 80% 0–30 No data 0Source: Yande Dai, China Energy Supply and Demand Situation and Energy Conserva-tion Policy (ERI, NDRC, March 2007). 1971 Source: IEA, World Energy Outlook 2005. 2000 2030 Source: IEA World Energy Outlook 2005 24 U.S. Department of Commerce | International Trade Administration
  • projects belong to the project owners, revenues from the transfer of CERs shall be owned jointly by the Government of China and the project owners. Cost Analysis Current Investment Cost and Cost Forecast through 2020 The current cost of investment in wind energy is in the range of $1,109.88–1,387.35/kW. It is expected that with increas- ing domestic manufacturing capacity and technology transfer, the investment costs can be lowered to the range of $832.41–971.14/kWh by 2010. Similarly, significant future cost reductions are expected for solar PV. Other more mature technologies, however, have less scope for cost reduction both in China and worldwide. The scenario for investment costs in renewable technologies is shown in Table 1.12. Figure 1.23: World CO2 Emissions Reference Scenario: Energy-related CO2 emission by Region 15 Rest of non-OECD 12Gigatonnes of CO 2 China 9 Rest of OECD 6 United States 3 0 1990 2000 2010 2020 2030 Source: IEA, World Energy Outlook 2006 Table 1.12: Investment Cost and per kWh Cost for Existing Technologies in China Solar Wind Energy Solar PV Waste CHP Geothermal Biogas Thermal $8,324.1–11,098.78 $277.47 per $6,936.74 $32.68–52.72 $166.48–277.47 Investment $1,109.88–1,387.35 per kWp m2 per kWe per m2 /hh $0.003 per $2.5–4.16 per Operation and maintenance $0.012 per kWh $0.006 per kWh $2.77 per m2 $8.32–13.87/a kWe m2 Electricity production costs $0.06–0.1 per kWh $0.5–0.7 per kWh N/A N/A N/A N/A Prices of $5 per Wp The price is Expected cost reduction Small (2010) to $20 per Wp Small None Small decreasing. (2020) Source: Azure International, proprietary research. Clean Energy: An Exporter’s Guide to China 25
  • n Chapter 3: Clean Energy PoliciesThe policy environment in China is a determining factor energy development and stipulates a number of broadlyfor the development of clean energy technology. More- defined instruments to reach these targets.over, clean energy policy development is currently accel- The REL mandates the establishment of priority griderating in response to China’s mounting energy pressures. access for renewable electricity generators, a feed-in tariffThis section provides an overview of the key existing and for renewable electricity delivered to the grid, a nationalplanned policies. and regional cost-sharing mechanism for renewable energy subsidies, a special fund for renewable energy, andRenewable Energy Law favorable loan conditions and tax treatment for renewableThe strategic position of renewable energy in China’s ener- energy. See Table 1.13: Instruments in policy was first affirmed through the Renewable Energy However, the general policy directions set out withinLaw (REL) approved by the National People’s Congress in this framework law are often vague and need to be fur-February 2005. The REL is a framework law, which went ther elaborated in implementing regulations in order tointo effect January 1, 2006. It set targets for renewable give clear signals for renewable energy development toTable 1.13: Instruments in REL. Instruments of REL Specification 4Establishes the strategic position of renewable energy. Identifies the scale of market development and plans for each step of renewable energy 4 National renewable energy target development. 4Identifies the types of technologies. 4Identifies the priority key locations for development. 4 ssurance that renewable energy power generation is a priority for grid connection. A 4 rid companies must accept all the power generated by renewable energy with the price G Grid connection priorities fixed by the government. 4 rid companies are required to invest in and construct transmission systems and the con- G nection components for renewable energy integration to the grid. 4he government determines the price based on the average cost or cost with advanced T technologies or bidding price. Classifying tariffs for RE power 4he price, application period, adjustment measures and appeal procedures are not yet T clearly determined in REL. 4osts for on-grid renewable energy electricity and off-grid generators in rural areas are C Sharing costs at national level shared by grid consumers in the whole country. 4osts for biofuel are to be shared regionally. It is not mentioned in which region in REL. C Special fund covers: 4Technology research, standards development, and pilot projects; 4Household renewable energy utilization projects in rural and pastoral areas; 4Off-grid electrification projects in remote areas; Renewable energy special fund 4enewable energy resource assessments and evaluation, as well as establishment of R information systems; 4Establishment of the localized renewable energy manufacturing industry; 4Special fund comes from central and local finance as well as the balance of cost sharing. 4inancial institutions may offer preferential loans with national financial interest subsidies F to eligible renewable energy development and utilization projects that are listed in the Policies on favorable credit treatment national guidance catalogue for renewable energy industry development. 4 ational policy banks, national banks, bilateral aid funds, and international multilateral N aid banks or financial organizations are able to supply favorable loans. 4 preferential tax will be given to renewable energy projects listed in the guidance cata- A Policies on favorable tax treatment logue for renewable energy industry development. 4Detailed implementation measures should be issued by the taxing authority.Source: Renewable Energy LawClean Energy: An Exporter’s Guide to China 27
  • the market. Development of such implementing regula- In addition to the above two pricing mechanisms, thetions is underway. management measures determine the feed-in tariff for biomass generation, which consists of the benchmarkingImplementing Regulations of the Renewable Energy Law price of desulferized coal-fired units plus a 0.03 $/kWhThe successful implementation of the REL depends on premium. For new projects, this premium will be de-the implementation of regulations, which remain general creased by 2 percent each year.and leave substantial room for interpretation. By the end To finance the cost of the feed-in tariffs, the Notice onof 2007, 10 implementing regulations had been issued Adjusting the Local Grid Feed-in Tariff, was released inregarding the development of renewable energy. June 2006 and instituted a national surcharge of 0.0001 $/ kWh52 on electricity sales.Mid- and Long-term Renewable Energy Development PlanThe Mid- and Long-term Renewable Energy Develop- Guidance Catalogue of the Renewable Energy Industryment Plan was published in August 2006. It sets goals The “Guidance Catalogue of the Renewable Energyfor the development of each renewable energy technol- Industry” was released by the NDRC in November 2006.ogy for both 2010 (10 percent) and 2020 (15 percent). This guidance catalogue specifies the key renewable energy technologies supported by the government, theManagement Regulations for Electricity Generation from utilization of these technologies, and their developmentRenewable Energy status (see Annex 3 for details). The aim of the catalogueThe National Development and Reform Commission is to guide decision-making on the direction of techno-released the Management Regulations for Electricity logical research and innovation, as well as the directionGeneration from Renewable Energy in February 2006. The of renewable energy investment. Based on the catalogue,regulations establish the authority for approval of renew- each province and municipality is to develop plans forable energy projects, the eligibility rules for renewable supporting renewable energy technological develop-electricity for policy and fiscal support, and a system for ment, pilot projects, and renewable energy investmentmanaging grid access. that fit the local context. Hydro projects on major rivers over 250 MW andwind projects over 50 MW are to be approved by the Interim Measures on a Special Fund for RenewableNDRC. Other projects are approved by the provincial- Energy Developmentlevel DRCs with notification provided to NDRC. Biomass, The REL mandated the establishment of a special fundgeothermal, wave, and solar PV are declared eligible for for renewable energy development. To ensure efficientpolicy and fiscal support. use of the special fund, the Interim Measures on a Grid companies are required to grant priority access to Special Fund for Renewable Energy Development wererenewable energy generators, both from the large national released by the Ministry of Finance (MOF) in May 2006.power groups and from independent power producers. The special fund, through no-interest and discountFurthermore, grid companies are responsible for the loans, supports the key fields of fossil fuel alternatives,construction, expansion, and adaptation of the grid to building heating and cooling, and renewable energyfacilitate access for medium- and large-scale renewable electricity generation (see Table 1.14). The amount ofenergy projects. special funds for each year is published by the MOF and The China Electricity Council (CEC) is to supervise NDRC at the end of each previous year. According tothe operation of renewable electricity generators, the the China Reform Newspaper of the NDRC, the specialsettlement of feed-in tariffs, and the relationship between funds increased to $2.96 billion for energy conservationrenewable electricity generators and the grid companies. and emissions reduction in 2007, of which $1.25 billion was to be used to support the 10 key projects in energyTentative Management Measures for Price and Sharing of conservation and capacity building. This amount is 13Expenses for Electricity Generation from Renewable Energy times greater than in 2006.53The Tentative Management Measures for Price and Shar- An application guidebook for the funds is drafteding of Expenses for Electricity Generation from Renewable annually and published by the NDRC and the financialEnergy were published in January 2006. The measures department of the State Council, in which the condi-stipulate two mechanisms for determining the feed-in tions for application are stipulated, as well as the fieldsprice for renewable electricity: and technologies supported by the special funds. Cor- responding training is held by the Application Steering4  he State Council sets the price; T Committee of the National Energy Foundation Project4 The price is determined by a competitive bidding round and China Project Application Net to explain the details for a project development concession. The concession of the application. To date, two application guidebooks and bidding process exists at both the national and the have been published, including: provincial levels.28 U.S. Department of Commerce | International Trade Administration
  • 4  pecial Funds Application Guidebook for RE Integrated S Energy Conservation Policies in Buildings,54 published by the MOF and Ministry of The Chinese Government is increasingly focused on Construction (MOC). It stipulates the technologies for RE energy efficiency and conservation. In this section the key building integration, especially for: energy conservation policies are outlined. 4  uilding-integrated solar water heating, solar ther- B mal air conditioners, and solar PV; Energy Conservation Law 4  eat pumps with sources of ground, aquifer, fresh H The new Energy Conservation Law was approved by the water, sea water, and sewage. 10th State Congress on October 28, 2007, and will enter4  007 Technology Innovation Fund Guidelines for a 2 into effect April 1, 2008.57 The law revises the existing Number of Key Projects,55 published by the Ministry Energy Conservation Law (EC Law) of 1998 and identifies of Science and Technology (MOST). It stipulates that five key policy instruments, which are shown in Table 1.15. private small and medium enterprises (SMEs) and Like the REL, the EC Law sets broad targets, but lacks the joint ventures obeying “51/49” rules that have RE- regulatory muscle to implement many of the changes it related technological innovation are eligible to apply hopes to make. for innovation funds up to $140,000 as interest-free or discount loans. In addition, the innovation funds Incentive Policy for Energy Conservation support technology transfer through fiscal support in Enterprises can apply for a subsidy for energy efficiency the form of $100,000–$280,000 interest-free loans.56 improvements to the NDRC and provincial DRCs at the beginning of each year. The subsidies are disbursed to Based on this application guidebook, companies the enterprises in batches. Applications that fall undercan apply for the special funds support through the the Top-1,000 Enterprises Energy Efficiency Program andEnergy Bureau of provincial DRCs and the provincial the NDRC’s key 10 energy efficiency programs in the 11thDepartment of Finance under the Ministry of Finance. Five-Year Plan get priority in subsidy allocation. The local provincial governments annually gather the proposalsOther Implementing Regulations from industry and submit them to NDRC for final ap-The effectiveness of the REL depends on carrying out its proval. MOF then transfers the subsidies to the provincialimplementing regulations, many of which must still be de- Departments of Finance, which in turn transfer the subsi-veloped. One regulation is of special importance: preferential dies to the enterprises.financing and taxation, which would significantly reduce In addition to this incentive scheme, a new fiscalthe gap between the market competitiveness of renewable incentive for energy efficiency projects was recently es-technologies and existing power generators. Industry experts tablished under the Tentative Management Measures forhave been appealing for several years to make progress on Fiscal Subsidy Funds on Energy Conservation Technologi-this regulation, but thus far have remained unsuccessful. cal Innovation (August 2007). The implementation period for this new incentive spans from August 2007 through December 2010. The policy awards an investment subsidyTable 1.14: Key Fields Supported by Special Funds of $27.75 per tce saved for investments in energy conser- vation measures. The subsidy is disbursed on the basis Key Fields Technologies Remarks of the actual amount of energy saved. The energy savings Fossil fuel Biodiesel Made from are audited by a third party and verified by a qualified alternatives sugarcane, cassava, certification organization such as the China General Cer- and broomcorn. tification Center (CGC). The government budget for this Bioethanol Made from oil incentive is open-ended and separate from the existing crops, oil fruit, and incentive policy budget. oil aquatic plants. Tax Incentives Many special preferential tax policies have been imple- Building heating Solar Integration in mented to support clean energy research, development, and building. and production. For example, since 2001 waste-to-energy cooling systems Geothermal projects have been value-added tax (VAT) exempt. A 50 Electricity Wind percent VAT discount applies for the use of energy-saving generation materials in buildings, for wind power projects, and for Solar PV coal bed methane projects. Furthermore, since 2005 small-scale hydro has had a reduced VAT rate of 6 percent, Ocean energy and both large-scale hydro production and ethanol pro-Source: NDRC, Interim Measures on Special Fund for Renewable Energy duction have been VAT exempt -- ethanol is also exemptDevelopment. from the consumption tax.Clean Energy: An Exporter’s Guide to China 29
  • Moreover, there are income tax deductions for various The Chinese Government’s “List of Energy Efficientenergy-saving and environmental technologies for both Products for Government Procurement” specifies thedomestic and foreign firms. products all provincial governments should seek to procure. The MOF and NDRC have the responsibility toGovernment Procurement Policies develop and update this energy efficiency list. The ef-There are a number of Chinese government procure- ficiency specifications for each product are those underly-ment laws, including the Government Procurement Law, ing China’s current energy efficiency labeling program runContract Law, Public Bidding Law, and Law against Unfair by the China Standard Certification Center (CSC, formerlyCompetition, all of which are important to American firms the China Certification Center for Energy Conservationlooking to enter the Chinese market. There are also a num- Products). Qualified procurement models must receiveber of regulations regarding the financing of government CSC certification, which can present a problem for U.S.procurement, supervision of government procurement firms and their products.agents, and registration of suppliers. Most procurementsare conducted in one of the following ways: Standards and Quality System China requires strict conformity with assessment li- Public invitation;4  censes, quality and safety licenses, testing, and labeling Invited bidding;4  verifications for many products. The Administration of Competitive negotiation;4  Quality Supervision, Inspection, and Quarantine (AQ- Single-source procurement;4  SIQ) is responsible for China’s standards development Request for quotation;4  and conformity assessment policies. Two independent Other methods confirmed by the department of gov-4  agencies under AQSIQ, the Standardization Administra- ernment procurement under the State Council. tion of China (SAC) and the Certification and Accredi- tation Administration (CNCA), play the dominant role“The Government Procurement Law was enacted for in standards development and conformity assessmentthe purpose of regulating government procurement policies, respectively.activities, including improving efficiency in the use of In general, exporters to China should be aware of threegovernment funds, safeguarding the interests of the state broad regulatory requirements in the standards and test-and the public, and promoting transparency in gover- ing area. First, AQSIQ maintains approximately 20,000 na-nance. The law establishes the principles for government tional standards, of which about 2,800 are mandatory. Theprocurement, including openness and transparency, mandatory standards are known as Guojia Biaozhun orfair competition, impartiality, honesty, and good faith.”58 GB standards. Compliance with these standards, generallyGovernment procurement information not involving related to safety or quality, is mandatory for both domesticcommercial secrets is published in the China Financial and imported products.and Economic News, China Government Procurement Second, numerous government agencies in ChinaNet, and China Government Procurement Journal. mandate industry-specific standards or testing require- If government procurement occurs through public ments for products under their jurisdiction, in addi-bidding, relevant information is to be published by media tion to the GB standards and the China Compulsoryselected by related government agencies. Experts who Certification (CCC) Mark. The CCC Mark is a compul-evaluate the bids are to be randomly selected, and must sory safety Certification and combines China’s previousmake evaluations in accordance with pre-set procedures.59 two inspection systems—one to check the contents of With the rapid growth of procurement and increasing products for import and export and the other for qualityconcern over energy efficiency, Chinese policy-makers control. Although China already has some standardsare beginning to realize their actions can lead the rest related to clean energy technology, most notably forof the market, both through the direct buying and the solar water heating systems, these standards still needsetting of examples. It should be noted however that al- to be harmonized with international standards, suchthough the government procurement process is becom- as the standards of the International Electrotechnicaling more transparent, there are still significant biases Commission (IEC).toward domestic products. Furthermore, an appropriate Chinese certification In December 2004, China’s Ministry of Finance (MOF), scheme based on international standards must be devel-in tandem with the NDRC, announced a new policy for oped for type certification and project certification (post-government energy efficiency procurement. The program installation). For example, development of internationalstarted in 2005 and was rolled out to all levels of govern- standards for wind turbines takes place in the Technicalment, including central, provincial, and local govern- Committee 88 (TC-88) of the IEC. Often national stan-ments; schools; and hospitals. In 2006, the total amount dards are based on these IEC recommendations, as wasof government purchasing for energy and water conserva- the case with China’s standards for wind turbines. Recenttion products increased to about $1.297 billion.60 scientific and technical developments however may lead30 U.S. Department of Commerce | International Trade Administration
  • Table 1.15: Instruments in the EC Law Instruments of EC Law Specifications 4Energy conservation is a key strategic policy objective. National energyconservation target 4Technologies are identified for energy conservation. 4he reporting process is identified, as well as the mechanism for assigning responsibility, T approvals, and appraising. 4 evelops a procedure for product standardization, industrial process standardization, and D energy-saving labels for appliances. Identifies an energy-saving assessment and appraisal system for fixed asset investment 4 Management of energy conservation projects. 4hases out energy-intensive equipment and production processes. P  4alls for improved public awareness on energy conservation through industry associations. C 4nergy-intensive industry. E Key industries targeted for energy 4uilding energy savings. B conservation 4ublic facilities energy savings. P 4nterprises with annual energy consumption over 10,000 tce. E Identify energy conservation technologies. 4 Technological advances 4 raft guidance catalogues of energy conservation technologies. D 4pecial funds for technology innovation, pilot projects, and the 10 key energy efficiency S programs of the NDRC. 4referential tax for EC technologies and products. P Incentive measures 4referential loans for research on EC technologies, EC products, and technology innovation. P 4referential tax for demand-side management (DSM), energy management contracts (EM- P COs), and voluntary agreements.Source: Energy Conservation Lawto additional standards that can meet the special require- for overall national energy development and will includements of the Chinese market. guiding principles for legislation on energy structure, en- With respect to PV, the existing Chinese standards for ergy efficiency, energy security, energy development andPV are being assessed. Two Chinese standards became utilization, and energy and environmental coordination.Reference Standards for IEC. In addition, China changed Table 1.16 provides an outline of the main instrumentsits Module Standard to correspond with IEC 61215. included in the new Energy Law. One of the most impor- tant changes is the proposed establishment of an EnergyForthcoming Energy Law Ministry directly under the State Council.To date, several laws regarding coal, electric power, energy The draft of the Energy Law has been posted on theconservation, and renewable energy development have Web site of the Office of the National Energy Leadingbeen released, but often these lack the strong integrated Group,61 only available in Chinese. It is anticipated thatapproach a complex energy portfolio requires. China’s passage of the bill will be achieved in 2009 after being ap-increasing dependence on imports, its rapid demand proved by the National People’s Congress.increase, and severe environmental damage has causedtraditional energy sources to become outdated from aninvestment perspective. A draft of China’s integrated Energy Law was recentlypublished. The Energy Law is an integrated framework lawClean Energy: An Exporter’s Guide to China 31
  • Table 1.16: Instruments of China’s Forthcoming Energy Law Instruments Specifications 4stablishes an Energy Ministry under the State Council, to oversee energy management E in China. 4larifies the role of industry associations in providing information on industry statistics, C Energy management standardization, technologies, market development, and consultancy for policy decision- making and to enterprises. 4nhances the management of exports of energy-intensive products. E 4stablishes an energy statistics and forecasting system. E 4 20–30-year energy strategy will be published and revised by the State Council once A every five years. Energy strategy and plan 4 five-year energy plan will be published one year after the publication of the economic A plan and social development plan. 4he provinces are to develop provincial energy plans according to their specific needs and T report to the State Council energy department. 4roperty of energy resources belongs to the state. P Energy development and 4 evelopment of mining, renewable energy, and energy production and conversion D should be approved by the State Council energy department. conversion 4stablishment of environmental compensation mechanism for energy production and E conversion. 4Business on energy supply should be approved by the State Council energy department. Energy supply and service 4Construction of an inter-regional energy infrastructure is encouraged. 4Establishment of energy universal service compensation mechanism. 4 llows the government to encourage energy conservation for optimizing industry and A consumption structures and to support energy conservation technology as well as energy management and conservation in key industries. Energy conservation 4stablishes energy conservation market mechanisms and perfect consultancy and service E system. 4Promotes energy efficiency labeling, EMCOs, voluntary agreement, and DSM. Energy reserve 4Increases strategic reserves of petroleum, natural gas, uranium, and high-quality coal. 4Emergency back-up capacity is to be constructed. Energy emergency 4asic supply of energy for emergency conditions is determined by order of importance B from essential national institutions, national defense facilities, emergency command agencies, the communication and transportation hub, and emergency medical treatment. 4 evelops a preferential tax, financial, and price policy encouraging investment in rural D energy. 4romotes utilization of new and renewable energy such as CHP, biomass, wind, and solar P Rural energy energy. 4Increases the proportion of rural grid coverage. 4Promotes rural energy conservation system and services. 4Establishes market-driven energy price mechanism. 4 llows the government to determine or guide tariffs for the use of pipelines and grids of A strategic public importance. Implements incentive tariff policy for new and renewable energy development. 4  Energy tariff and tax 4 llows the government to guide the energy price for energy-intensive and polluting A industries. 4Establishes a national and provincial expenditure budget system. 4stablishes government investment for environmental protection in mine areas, rural en- E ergy development, energy technology research and development, energy conservation, and development and utilization of renewable energy.32 U.S. Department of Commerce | International Trade Administration
  • Table 1.16: Instruments of China’s Forthcoming Energy Law (continued) INSTRUMENTS SPECIFICATIONS 4romotes energy technology development for innovation and research on energy P resource exploration; energy conversion and transportation technology; comprehensive utilization of clean energy technologies; energy conservation and emission reduction Energy technology technologies; and energy security production technologies. Increases budget for energy technology development at national and provincial govern- 4 ment levels. 4romotes enhancing public awareness. P 4stablishes a mechanism for international energy cooperation, management, and coordi- E nation. Energy international cooperation 4stablishes publication of “Industry Guidance Catalogue for Foreign Investment on Energy E Sector” and relevant policy. 4romotes international cooperation in energy trade, energy transportation, capacity P building, and energy security. 4roposes three supervision methods: State Congress, administration, and society. P Supervision and inspection 4romotes energy performance site checking. P 4alls for publication of energy performance of high-intensity enterprises. C Liability 4 ssigns liability to different government officials, energy enterprises, and energy end- A users as well as to the public at large.Clean Energy: An Exporter’s Guide to China 33
  • n Chapter 4: Opportunities for U.S. Firmsin ChinaSince China’s entry into the WTO in 2001, the opportuni- Expanding Market for High- quality Equipmentties for U.S. firms to enter the Chinese market are acceler- To succeed in the competition, more and more RE manu-ating. This potential is often extremely attractive to foreign facturers are eager to increase their product quality by in-manufacturers, investors, and other firms. The opportuni- troducing process line or purchasing production licensesties for U.S firms entering the Chinese clean energy market from international top manufacturers as well as cooperat-have likewise grown tremendously over the last few years ing with them through technology transfer.thanks to increasing energy security concerns and mount- To successfully achieve China’s energy efficiency targeting environmental pressures. In this section, two key (a 20 percent decrease in energy intensity by 2010), alongenablers are considered: with targeted improvements in public awareness and new building improvements, more and more small and4 New and emerging Chinese Government energy policies; medium enterprises (SMEs) are looking to improve their4 Lag in the current Chinese CET market relative to those energy performance by introducing effective energy man-in the European Union and North America. agement and importing high-quality and efficient proven equipment.Ambitious objectives for China’s renewable energy devel-opment are evident from government policies. Accord- Professional Clean Energy Technology Servicesing to China’s Energy Research Institute, the investment The development of CET service companies has notpotential for energy efficiency in China from 2007 to 2010 been well established in China. In fact, the entireis $120–160 billion.62 For renewable energy, the main concept of energy service companies (ESCOs) is gener-technologies promoted are hydro, wind, solar PV, solar ally unknown to many Chinese companies. Some keythermal, biomass electric power generation, and biofuels. areas of opportunity for professional ESCOs include:The areas of geothermal and ocean energy are also men- operation and maintenance for renewable energytioned in these policies. generation, energy auditing and advisory services, con- To fulfill the objective of a 20 percent decrease in energy sultancy on energy management and RE integration,intensity by 2010 (relative to 2000 levels), the Chinese Gov- and ongoing energy efficiency services within a largeernment has recognized that major developments in tech- business. There will be a growing market for all of thesenology and energy management must be achieved across services for international and domestic businessesindustrial, commercial, and residential sectors. Furthermore, operating in China.evolution of the energy infrastructure provides avenues forbroader adoption of renewable energy technologies. Proven Energy Conservation Technology Personal and materials transportation is likewise a Increasing energy efficiency performance is one ofcore factor in China’s energy demand policy. Given the China’s key energy strategies. Except for the 10 EC pro-rapid urbanization of China, the demand for intra-city grams and Top-1000 Enterprises Program being used byand inter-city transportation is growing rapidly. It can the government to achieve the objective, there is a needbe expected that more fuel-efficient and lower-emission to improve public awareness, as well as technology andvehicles will be increasingly popular in China. The boom- advisory services to help SMEs improve their energy per-ing personal transport sector is especially driving a need formance. However, there is a lack of expertise in Chinafor alternative liquid fuels and more efficient personal and regarding energy efficiency technologies and innovation,mass transit solutions. energy auditing, and energy management. As a result, The rapidly growing government push, and result- there is a need for qualified consultancy companies ining market pull, for clean energy development presents these areas.special challenges for China due to the technological re- At present, SMEs have to find energy-savings solutionsquirements necessary to reach the aggressive government themselves, but information on which technologies aregoals. These challenges are elaborated upon below. suitable for particular kinds of energy efficiency improve- ment is not readily available. There is also a lack of provenNeed for High-quality Equipment, Products, and Services energy efficiency technologies, providing an importantThe commercial market for clean energy technolo- opportunity for U.S. firms to provide expert consultancygies in China is developing. As CET demand picks up, and technology services.increasing demand for proven, high-quality productsand services can be expected, providing an opening in Energy Technology Development Opportunitiesthe market for qualified international companies with China can benefit greatly from firms that offer key tech-sustainable business operations. nology solutions. Table 1.17 below provides an overview of the areas of technology development where foreignClean Energy: An Exporter’s Guide to China 35
  • companies provide unique solutions that China currentlydoes not have. Given the ambitious near-term targets set by theChinese Government for deployment of renewable energytechnologies and energy efficiency improvements, as wellas the increased investment in industry, there is currentlysubstantial opportunity for U.S. firms in China.Table 1.17: Key Areas of Opportunity for U.S. Clean Tech Firms Technology Opportunity 4 edicated O&M service companies. D 4emote monitoring systems and control systems. R Wind energy 4 ind turbine design and testing. W 4echnologies for large-scale wind turbines (capacity over 2 MW). T 4oftware for wind resource assessment, grid integration, and wind power prediction. S 4 esthetic building integration. A Solar thermal 4 igh-quality installation. H 4 fter-sales service. A Improved technology in thin-film solar panels. 4 4ooperation for technology transfer to increase the quality of solar PV products and decrease the cost. C 4echnology on high-quality converters to increase the conversion efficiency. T Solar PV Interface technology for building-integrated PV (BIPV) and for power plants. 4 4 igh-quality crystalline silicon technology. H 4echnology/software for optimizing PV systems. T 4 ltra-thin stainless steel bands for soft solar PV panels used in BIPV. U Biofuels 4&D cooperation on the production of ethanol from cellulosic feedstock. R 4raining on technology, equipment, and service;, development of high-efficient fermentation technology T for higher biogas yield. 4 emonstration of new building material and technology for digester construction and biogas storage; D high-pressure biogas storage. Biogas 4eliable (more than 7,000 hours/year) biogas heat and power co-generation. R 4fficient post-treatment technology for water and solids after fermentation. E 4iogas fuel cell development cooperation. B 4iogas purification with air intake (biological sulfur removal). B 4iogas processing for feed-in natural gas grid and as transport biofuel. B Geothermal 4echnology and equipment for geological exploration and project development. TSource: Guidance Catalogue of the Renewable Energy Industry and interviews36 U.S. Department of Commerce | International Trade Administration
  • n Chapter 5: Investment and Financing ofRenewable Energy and Energy EfficiencyBy the year 2020, China plans to develop 120,000 MW of Multilateral and Bilateral Organizations. Both the Worldrenewable energy. This would account for 12 percent of Bank and the Asian Development Bank have made signifi-China’s total installed energy-producing capacity. China’s cant lending commitments to renewable energy and en-growth target for renewable energy production will re- ergy efficiency in the Asia region, with particular emphasisquire an investment of approximately $100 billion by 2020. on China. For example, the World Bank has committedThe challenges involved in attracting this investment are $86 million of a total $132 million project for follow-up tosignificant and will depend on the enabling policy and the China Renewable Energy Scale-up Project. This projectregulatory frameworks being developed to entice energy hopes to demonstrate early success in large-scale renew-investors. Financing needs include: able energy investments with participating local develop- ers. The project comprises two components: a 100-MWProject Equity. Equity capital in China is typically sourced wind farm at Huitengxile in Inner Mongolia and a bundlefrom the government, strategic investors and joint ven- of small hydro construction and rehabilitation projects intures, private equity funds, utilities, or capital markets (i.e., Zhejiang Province. The World Bank also has a dedicatedpublic equities or bonds). Joint ventures in particular are program for promoting clean energy in Asia—the Asia Al-one of the main sources of project equity in China. Of late, ternative and Sustainable Energy (ASTAE) Program, whichthe number of new renewable energy private equity funds seeks to mainstream investment in renewable energy andand investors has increased to include both pure equity energy efficiency in the region.and quasi-equity funding. The Asian Development Bank (ADB) recently ap- proved $35 million in funding for the Gansu Clean EnergyProject Debt. The bulk of the financing provided to a Development Project and $600,000 in support for estab-project is usually in the form of senior debt. A significant lishing a Clean Development Mechanism Fund and hasamount of innovation in debt-financing instruments is a number of energy efficiency projects being consideredcurrently in progress in China by organizations such as the for approval. GEF has supported over 28 projects underWorld Bank, export credit agencies, and other develop- the climate change focal area in China, valued at overment finance institutions to reduce risks and improve $376 million. Bilateral organizations providing financingaccess to long-term financing. and technical assistance include GTZ and KfW of Ger- many, Triodos Bank of the Netherlands, and export creditEnd-User Finance. As renewable energy markets continue agencies from a number of countries including the Unitedto grow in China, end-user finance will become important. States, Japan, and Europe.Small and Medium Enterprise Finance. SMEs will play International and Local Finance Institutions. Interna-an increasingly important role in providing technologies tional and local financial institutions have been active inand services in China; however, these markets are rarely supporting clean energy in China. International investorsserved by bank financing. Niche organizations such as include entities such as Citigroup, Actis, and Credit Suisse,E&Co, which is active in China, provide business planning while local financial institutions include China Merchantsand advisory services as well as critical seed capital, but Bank, China Development Bank, and the Industrial andadditional funding sources are needed in this area. Commercial Bank of China (ICBC). Besides long-term loans, short-term bonds areFinancing Sources for Clean Energy an important way to expand financing channels andClean energy financing sources in China include: reduce costs. In May 2005, the People’s Bank of China sold the first short-term bond; since then, 364 short-Government agencies. Government agencies, at the term bonds have been issued with a total of approxi-national and local levels, will continue to be a key source mately $67.8 billion.63of funding for clean energy investments in China. China’s Trust funds are another financing channel to reducerenewable energy program has made significant achieve- costs. The bank commission trust company operates asments in small hydropower, biogas plants, solar hot water the client’s capital, the enterprises act as the main body ofsystems, and recently PV and wind systems due in large the loan, and the capital received from the trust companypart to government support. For instance, the Ministry of is used to meet medium and long-term requirements.Science and Technology and the National Development The All-China Federation of Industry & Commerce,and Reform Commission jointly launched the International together with the New Energy Chamber and someScience and Technology Cooperation on New and membership enterprises, has recently proposed to theRenewable Energy on November 12, 2007. Special funds NDRC to set up so-called Industry Investment Funds forwill be earmarked for the launch of the program. New Energy, which will benefit new energy enterprises.Clean Energy: An Exporter’s Guide to China 37
  • Grants/soft loans. Such loans refer to financing or credit carbon market is logically allocated in accordance with support from a government institution or multilateral the share. institution. Government financing sources have special The easiest way to enter China’s carbon market is to criteria or non-commercial objectives. purchase Verified Emission Reductions (VERs) on the voluntary market. Compared to CDM trade, VER is a flex- Public Offering. Renewable energy enterprises can ac- ible mechanism for joint ventures with foreign shares over cess capital through public offerings. China GoldWind, for 50 percent. According to ICF International predictions,65 instance, a wind turbine manufacturer in Xinjiang Province, global VER requirements will reach 0.4 billion tonnes of received approximately $260.4 million by public offering in CO2 by 2010, of which three-quarters come from group December 2007. 64 buys and the remainder from private buyers. Based on the current VER price of $5.5/ton, the potential of the VER Carbon Finance. Both the CDM and the emerging vol- market is $2.2 billion, 40 percent of which is in China.66 untary carbon markets are providing a revenue stream VERs are applicable to wind projects, small hydropower to increase the financial viability of clean energy projects projects, biogas utilization, landfill projects, and hydro- in China. In 2006, the global carbon market amounted to fluorocarbon (HFC) and N2O decomposition projects, the $30 billion, up from $11 billion in 2005. CDM accounted latter of which is favored by the Chinese government. 88 percent of this market. As noted in Figure 1.24 below, China received 61 percent of the market’s volume. Venture Capital and Private Equity Investment According to national policy, joint CDM ventures must U.S. investment in clean technology companies world- abide by the”51/49” rule , in which case the profit from the wide has increased steadily from around $590 million in 2000 to $2.6 billion in 2007.67 The implementation of Figure 1.24: Carbon Sellers in 2006 China’s Renewable Energy Law and the 11th Five-Year Plan are the main policy drivers in China’s clean tech industry and will continue to stimulate the market going forward. In the first quarter of 2007, $154 million was in- vested in six deals – almost 14 times the amount invested India in the first quarter of 2006. This investment expected to 12% Rest of Asia expand the Chinese clean tech markets to around $700 7% million in 2008.68 Figure 1.25 displays the number of China Africa deals by quarter. 61% 3% Private equity funds will also continue to seek opportu- Other + nities in the Chinese market. Note that China will likely be Unspecified more selective in bringing in overseas investors as the total 7% amount of foreign investment continues to grow. Therefore, Brazil the major problems faced by private equity investors in 4% China are no-exit mechanisms and political risks. Rest of Table 1.18 shows the main private equity and venture Latin America 6% capital firms in the Chinese clean technology market.69 Source: Viakatta Putti, “CDM Market Outlook,” a presentation at the Africa Lighting Carbon Finance Workshop, October 2007. Table 1.18: Selected Private Equity and Venture Capital Figure 1.25: Clean Tech Venture Investments by Quarter Investment Firms in China Amount Number of Deals Name of Firm Company Invested 250 10 Sino-Belgium Direct Equity Goldwind Number of Cleantech Deals Investment Company 200 8 HSBC Infrastructure Fund Canadian Solar 150 6 ManagementUS$M London Asia Capital China New Energy 100 4 DragonTech Venture Management Suntech Power 50 2 Actis Capital LLP Suntech Power 0 0 Natexis Private Equity Suntech Power 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 Prax Capital Suntech Power Source: Cleantech Group LLC, “China Cleantech Venture Capital Investment Report,” .2006–2007. Source: Azure-international 38 U.S. Department of Commerce | International Trade Administration
  • n Chapter 6: Barriers to Clean Energy Tradeand Investment for U.S. FirmsDespite the significant opportunities the Chinese clean with protecting and enforcing their IPR. See Appendix Aenergy market presents, important barriers remain that for a list of resources.must be considered before developing a successful Chinesebusiness strategy. These barriers are addressed below: Legal and Regulatory Environment Chinese laws and regulations for clean technology tendIntellectual Property Rights Enforcement to be broadly defined and lack specific implementingAlthough China’s leadership has recognized the impor- rules and measures. This can make it difficult for U.S firmstance of improving the protection of intellectual property to determine precisely whether their activities match or(IP), IP theft remains a major challenge to U.S. compa- contradict a particular regulation.nies. The latest U.S. trade losses due to counterfeiting and While the Energy Conservation Law has played anpiracy in China remain unacceptably high. Copyright important role in improving energy efficiency, it is widelyindustry losses were estimated at over $2.9 billion in 2007. recognized that the law’s incentives and enforcementIn FY2007, 80 percent of the fake products seized at the regulations are too weak. It is expected that more incen-U.S. border, valued at $158 million, came from China. tives will be provided and a more restrictive managementThis $158 million figure represents a 25 percent increase system adopted in the amended Energy Conservation Lawcompared to the value of FY2006 seizures. Taking steps to currently under review by the National People’s Congress.protect your U.S. intellectual property in China is a critical Several much needed regulations are also not yet inpart of doing business with China. place under the Renewable Energy Law. A governmen- Because U.S. registered patents and trademarks tal guiding price has not been implemented for windprovide no protection outside the United States, securing power generation. And while competitive tendering isyour IP rights in China and other countries is essential. effective for large wind power projects, no mechanismIf, for example, you enter the Chinese market without exists to price small wind projects and improvementshaving registered your trademark in China (in English, of existing wind farms. Feed-in tariffs are also not fixedand ideally, in Chinese as well), one of your competitors, nationwide, increasing the risk for project developersdistributors or partners could register before you and bar and capital from selling or manufacturing products bearing your The overlapping responsibilities and areas of authoritytrademark in China. This practice, commonly known as among government organizations often cause additional“trademark squatting,” is among one of the most frequent confusion to foreign companies. China lacks an openproblems faced by U.S. industry. Additionally, mandatory system that disseminates planning information, projecttechnology transfer requirements and “patent squatting” approval, and pricing to the public. As a result, foreignhave become problems for U.S. industry in China. companies often face ad hoc decision-making and an China has three tracks for seeking enforcement of often cryptic response from the government to their ques-IP rights – civil, criminal and administrative. However, tions. It is therefore advised that U.S firms carry out duethe lack of effective and deterrent enforcement of IP diligence and seek professional advice before entering therights remains a serious problem. Enforcement efforts, Chinese market.particularly at the local level, are restricted by poorcoordination among Chinese Government ministries Clean Energy Technology–Related Customs Regulationsand agencies, local protectionism and corruption, high and Trade Tariffsthresholds for initiating investigations and prosecut- Foreign companies operating in China are requireding criminal cases, lack of training, and inadequate to pay an income tax, which is calculated differentlyand non-transparent processes. If a company does not according to the percentage of ownership a foreignregister its IP rights in China, China’s three enforcement firm has in a joint venture. China intends to eventuallytracks not only are not available to you but also may be phase out its two-tier income tax system for domesticused against you. Sophisticated counterfeiters manipu- and foreign enterprises, because domestic enterpriseslate the loopholes in the Chinese system to prevent have long resented rebates and other tax benefitsmarket access for foreign technology. enjoyed by foreign-invested firms. The move toward The United States has consistently made the protec- national treatment will mean the gradual elimina-tion and enforcement of IP a top priority and recently tion of special tax breaks enjoyed by foreign investors.launched the Strategy Targeting Organized Piracy (STOP!), According to the framework of corporate income taxa U.S. Government initiative to fight global counterfeiting reform, the corporate income tax will be unified to do-and piracy. The Department of Commerce plays a critical mestic and foreign direct investment (FDI) companies,role in this effort by providing U.S. businesses, including meaning FDI companies will no longer have advan-SMEs, specific IP resources to educate and assisting them tages in terms of favorable tariffs.Clean Energy: An Exporter’s Guide to China 39
  • A comprehensive guide to China’s customs regulations sary difficulties and delays in acquiring governmentis available in the Customs Clearance Handbook compiled approvals. A good relationship can pave the way. Inby China’s General Administration of Customs. It contains addition, the Chinese Government tends to protectthe tariff schedule, national customs rules, and appropri- local firms, especially state-owned firms, from imports,ate regulations. This guide can be purchased at bookshops while encouraging exports. Although WTO accessionin China. is certainly helping in this area, progress is being made only gradually.Restrictions on Foreign Direct Investment There are resources available to help U.S. firmsAlthough the Chinese Government encourages foreign develop relationships with the Chinese Government.investment in the clean energy industry, the “Catalogue The U.S. Commercial Service in Beijing also offersfor the Guidance of Foreign Investment Industries (2007 a wide range of services to assist U.S. companies inrevised),”70 does limit foreign firms to some degree. finding Chinese partners. See Appendix A for a list ofIn the catalogue, which came into force December 1, additional resources.2007, foreign industries are divided into “encouraged,””restricted,” and “prohibited.” The items related to clean Low Awareness of Intercultural Issuesenergy technologies are summarized below: There is a large culture gap between the United States and China, which is too often ignored. InterculturalEncouraged Sectors: Development and utilization of clean- sensitivity is critical, and should be considered a corecoal technologies; construction and operation of hydropower focus for any company working in China. Between thestations with the main purpose of generating power; con- two countries the ideas of law, profit, decision-making,struction and management of nuclear power plants (Chinese market orientation, business relationships, and technicalpartner shall hold the majority of shares); and construction standards are quite different. Low awareness of how toand management of new energy power plants (solar, wind, navigate these differences will cause misunderstandingsmagnetic, geothermal, tide, and biomass energy). New and miscommunication and can cause conflicts of inter-energy power equipment is however limited to equity joint est as time goes and cooperative joint ventures. A good way to prevent cultural conflict is to visit China in order to gain a better perspective and understand-Restricted Sectors: Manufacturing of biofuels; con- ing, which can provide a company great insight into thestruction and management of conventional coal-fired country, the culture, the business climate, and its people.condensing steam power plants whose unit installed Chinese companies prefer and respect face-to-face meet-capacity is less than 300,000 kW within the small grids ings, which demonstrate a U.S. company’s commitmentof Tibet, Xinjiang, and Hainan Provinces; and coal-fired to working in China. Note that China has many differentcondensing-extraction steam power plants with dual use regions and that each province is unique both economi-unit co-generation. cally and socially.Prohibited Sectors: Construction and management of con- Relative Higher Product Pricesventional coal-fired condensing steam power plants whose Generally U.S. production costs and product prices areunit installed capacity is less than 300,000 kW outside the higher than Chinese production costs and prices. Most Chi-small grids of Tibet, Xinjiang, and Hainan Provinces. nese consumers are very sensitive to price and will usually The National Development and Reform Commission choose the less expensive product unless better after-salesand Ministry of Commerce jointly issued a new “Indus- service or clearly better product quality is available.trial Catalog for Foreign Investment.” It is recommendedthat U.S. firms look through the related special laws and Government Procurementregulations carefully before investing or pursuing busi- The transparency of government procurement is aness in China. concern for foreign companies. Local relationships and networking of domestic companies play a very importantLack of Government Relations role in procurement, which may lead to unfair competi-In China, Guangxi (relationship) is a complicated mat- tion and may put U.S firms in a weak position.ter. Building quality government relationships should Corruption in government departments remainsbe a primary business development focus for many U.S widespread, though the government continues to call forfirms, especially for those firms entering the Chinese improved self-discipline and anti-corruption efforts at allmarket for the first time. There will be unpredictable levels. For competitive procurement contracts, there ischallenges and it is important for U.S. firms to coor- little direct evidence that corrupt practices have influ-dinate with the Chinese Government when dealing enced awards or resulted in a failure to enforce competi-with issues of foreign trade and economic cooperation. tive measures. However, competitive procedures are notLack of a government relationship will create unneces- followed for the bulk of procurement in China.40 U.S. Department of Commerce | International Trade Administration
  • Contract Enforcement payments. Nevertheless, terms and conditions are generallyThe Contract Law came into force on October 1, 1999, and negotiable in practice and determined on a transaction-by-contains both general and specific provisions. Technol- transaction basis in the form of a "silent" confirmation.ogy Contract Regulations were published in 2002. There Documentary collection is less formal and more flex-are some other laws and regulations regarding contract ible. The exporter submits a full set of trade documents forenforcement, such as: payment collection to the bank designated in the contract. The Chinese bank sends the documents to the home of- Administration of Technology Import and Export;4  fice for examination and in some cases passes them on to Administrative Measures on Prohibited and Restricted4  the buyer for further examination. Payment is made after Technology Exports; the documents have met the approval of all parties. This Administrative Measures on Prohibited and Restricted4  method of payment provides less coverage against default Technology Imports; and should be used with caution. It is the responsibility of “Catalogue of Technologies Prohibited and Restricted4  the exporter to determine the specific instructions to be for Import”; used in the collection letter. Circular (Ministry of Foreign Trade and Economic Coopera-4  E-commerce in China has great potential. However, tion & State Administration of Foreign Exchange) Adminis- Internet security needs to be taken into account. In April tration of Foreign Exchange Sale and Payment Related to 2005, the Law on Electronic Signatures took effect and Technology Import Contracts (February 20, 2002). enhanced the safety of on-line transactions. Technology contract regulation is divided betweendomestic technology contracts ruled by the ContractLaw of 1999, and technology contracts with at least oneforeign party, ruled by the Technology Regulations of1985 and a long string of closely related legislation. Thegreatest problem for technology contracts remains dualregulations and unfair restrictions. The technology trans-fer sub-section has many parallel articles to the regula-tions and leaves additional room for maneuvering to thecontract parties themselves. One of the problems in contract enforcement is thatChina does not enforce foreign judgments, in particularU.S. judgments. Problems caused by improper inter-pretation of contract documents may therefore lead toineffective enforcement. It is unclear who will interpretthe Contract Law since the National People’s Congress(NPC) Standing Committee has jurisdiction but has notyet fulfilled its role. Instead the Supreme Court has cre-ated a series of suggested interpretations. There is alsothe possibility that other ministries of the State Councilwill claim the right to implement the new law in theabsence of NPC interpretation.Payment SecurityLetters of credit and documentary collection are commonmethods for payment, under which foreign exchange is al-located by the central government for an approved import.Although the Bank of China dominates Chinas trade-fi-nance business, most Chinese commercial banks, such asthe China Construction Bank, Industrial and CommercialBank of China, and the Agricultural Bank of China, havethe authority to issue letters of credit for imports. Foreignbanks with branches or representative offices in China canalso issue letters of credit. China has been a member of the International Chamberof Commerce since 1995 and is subject to the Unified Customsand Practice (UCP) 500 Code regarding international tradeClean Energy: An Exporter’s Guide to China 41
  • n ConclusionChina presents both unprecedented opportunities andchallenges for clean energy technologies, due to the sheerscale of the market, the demand, and the projected futureenergy scenario. Over the last decade, the country hasfaced serious challenges related to energy shortages andheavy pollution, both of which have been brought on byrapid economic development. In response, the govern-ment of China has actively promoted the developmentand deployment of renewable energy with progressiveand ambitious policies and targets. This combination offactors represents a host of opportunities for U.S. firms.While some technologies, such as solar water heatingand hydropower, are mature and their markets relativelystable, others—such as large-scale wind power, building-integrated PV, and energy efficiency—lag behind in globalcompetitiveness due to resource shortages, lack of exper-tise, and/or dependence on foreign technology. Though China’s clean energy market is clearlygrowing, it lags behind the more rapid development ofheavy industry. China will therefore likely be a majornet exporter of renewable energy equipment in the nearterm, as the country produces far more equipment thanit can install domestically. However, as the demand forhigher product quality and after-sales service increases,and as Chinese consumers become more conscious of ef-ficiency and environmental responsibility, this situationwill change. The Renewable Energy Law has already hada demonstrable effect on China’s clean energy marketand resulted in an increase of new renewable energyprojects, particularly in the areas of wind, solar, and bio-mass. Ambitious targets were included in the REL for thenext 10–15 years, which when paired with the industryoutlook are likely to be even higher. Therefore, U.S. firmsshould anticipate a growing demand for proven, high-quality products and services in key areas such as energyservice companies, energy efficiency auditing, wind farmoperation and management, technological innovationof large-scale turbines, aesthetic building integration ofSWH, and improved thin-film PV technology.Clean Energy: An Exporter’s Guide to China 43
  • n Annex 1. Major Market Players in ChinaWind Power In 2005, the production capacity for solar modulesIn China, there are currently over 80 wind turbine was 858 MWp, with an actual production of 284 MWp, asgenerator (WTG) manufacturers and 200 wind develop- shown in Table 1.24.ers. Domestic companies occupy over 75 percent of thedomestic market. The top seven WTG manufacturers Solar Water Heatingand top 10 developers share 80 percent of the market In total there are over 3,500 solar water heating (SWH)(see Table 1.19). system manufacturers in China, the top 10 of which are To date, Chinese WTG technology lags behind, and able to provide high-quality products and good after-saleskey technology and licenses still belong to European and services. These top 10, listed in Table 1.25, share less thanU.S. companies. Narrowing the technological gap will 20 percent of the market.71require important investments in WTG technical develop-ment from Chinese companies. The leading Chinese WTG Small Hydropowercompanies are shown in Table 1.20. Small hydropower technologies are mature in China. Of China has developed a mature solar industry market over 100 manufacturers, 10 qualified manufacturers werein recent years, with booming investments at the inter- published in the 2007 China Renewable Energy Industrynational level providing an important opportunity. The Blue List, and they are listed in Table 1.26. The Web sites ofcapacity of the solar industry feedstock production lines these manufacturers are also provided.increased sharply in 2007 and now surpasses 2,500 tonsper year, as shown in Table 1.21. Energy Efficiency In 2005, the total production capacity for solar The energy efficiency market is booming as a result of theindustrial ingot reached 5,842 tons while the actual policy and goals set forth in the 11th Five-Year Plan. Numer-production stood at 2,386 tons. Over 80 percent of ous companies and organizations have developed energythe domestic manufacturers produce mono-ingot, as efficiency operations in various fields. Many of the top 500shown in Table 1.22. companies, such as GE, ABB, Siemens, Schneider, and In 2005, the market for solar cells was dominated by Panasonic, have expanded their energy efficiency businessestwo companies, Suntech and Ningbo Solar. In 2006, the all over China. Some of them sell energy efficiency productssize of the solar cell market multiplied by 11, and new such as energy-saving lamps and high-efficiency motorscompanies rushed into this sector. Table 1.23 below iden- directly to the consumer or provide technical solutions andtifies the current players. services for plants and buildings. Table 1.27 shows the topTable 1.19: Wind Market Shares by Developers and WTG Companies in the First Half of 2007 1H07 Installations share by developer 1H07 WTG market shares by company (total: 1,094MW, Est. equity weighted cap.) (total: 1,094MW) Market Share % of Market Share % of Company Manufacturer Name (YW) for the Year market for the Year market Longyuan 292,390 27 Goldwind 392,250 36 Ningxia Power 131,775 12 Sinovel 156,000 14 CPI 123,525 11.3 Dongfang Electric Machinery 121,500 11 Shenhua 138,763 12.7 Vestas 101,350 9 Keshiketeng County Huifeng GE Wind 115,500 11 48,510 4.4 New Energy Co. Ltd. Gamesa 110,500 10 Datang 47,750 4.4 Nordex 19,500 2 IMAR Wind Power 45,000 4.1 Suzlon Energy Ltd. 62,500 6 Beijing Energy Investment 47,250 4.3 Windey 8,250 0.75 Huaneng 34,538 3.1 ENGGA 1,500 0.14 CECIC 31,500 3.0 China Creative 3,000 0.27 Huadian 28,900 2.6 CWIC 23,250 2.1 Shanghai Electric 2,500 0.23 Shandong Luneng 21,650 2.0 13 cos (<1% each) 79,550 0.1 Source: Azure InternationalClean Energy: An Exporter’s Guide to China 45
  • 10 energy efficiency consulting companies in China. Table Table 1.21: Solar Ingot Feedstock Production Lines1.28 displays the main products produced by the top energy Capacity Beginning ofefficiency players in China. Company (tons/year) Exploitation Sichuan E’Mei SIi feedstock 100 1999 pilot line Sichuan E’Mei Si Feed 200 2006 Stock Production Luo Yang Zhong Gui 300 2005 (First Phase) Luo Yang Zhong Gui 700 2007 (First Phase) Luo Yang Zhong Gui 2000 2008 (Third Phase) Sichuan Leshan 1260 2007 Xingguang Si Source: Kong Li, The Development of PV Technology in China (Institute of Electrical Engineering, Chinese Academy of Sciences, November 2006).Table 1.20: Leading Companies in WTG Technology in China Company Type of Company Tech/License Units Cap. Wholly owned foreign enterprise Gamesa Gamesa 0.85 MW (WOFE) GE WOFE GE 1.5 MW NCWA-Acciona Sino–foreign joint venture (S/F JV) Acciona 1.5 MW NCWA-Acciona-Wandian (Beijing) Ltd. S/F JV Own/Wandian 0.6 MW Nordex-Xian Weide S/F JV Nordex 0.6 MW Nordex-Ningxia S/F JV Repower 1.3 MW Suzlon Energy Ltd. WOFE Suzlon 1.25 MW, 2.1 MW Vestas (850) WOFE Vestas 0.85 MW Vestas (2 MW) WOFE Vestas 2 MW Sinovel-Dalian Heavy Industry State-owned enterprise (SOE) Fuhrlaender 1.5 MW Dongfang Electric Machinery SOE Repower 1.5 MW Goldwind Science & Technology Co., Ltd. (750 kW) SOE Repower 0.75 MW Huayi (Zhejiang) Wind Power Co., Ltd. Domestic private Own 0.78 MW Windey (Zhejiang) Wind Generating Engineering Co., Own/Windey/ SOE 0.75 MW Ltd. Garrad HassanSource: Azure InternationalTable 1.22: Manufacturers of Solar Ingot (2005) Manufacturer Type Capacity (tons) Production (tons) Ling Long Mono-ingot 2250 1126 Jinzhou Huari Mono-ingot 800 400 Trina Solar Mono-ingot 180 60 New Energy Research Institute of Qinghai Mono-ingot 270 0 Tianwei Yingli Cast 770 260 Ningbo Jingyuan Cast 90 40 Jingsu Sunda Mono-ingot 350 100 Jinggong Cast 132 0 Others Mono-Ingot 1000 400 5,842: 4,850 Mono Si; 992 2,386: 2,086 Mono Si; 300 Total Poly Si Poly SiSource: Kong Li, The Development of PV Technology in China (Institute of Electrical Engineering, Chinese Academy of Sciences, November 2006).46 U.S. Department of Commerce | International Trade Administration
  • Table 1.23: Solar Cell Manufacturers Table 1.24: Manufacturers of Solar Modules Production in Capacity by 2006 Company 2005 (MWp/year) (MWp/year) Capacity 2005 Production Company Certification Suntech 82 300 (MWp) (MWp) Ningbo Solar SunTech (Wuxi) TüV 120 78 20 100 Power Solar Energy-Tech Nanjing PV-Tech 5 200 TüV 100 45 (Shanghai) Tianwei Yingli 3 60 Tianwei Yingli TüV 50 13 Yunnan Tianda (Baoding) 3 50 PV BP Jiayang TüV 50 8 Jiangsu Linyang 1 100 Solar Energy Solarfun TüV/CE/UL 50 15 (Ningbo) 9.6 (monosilicon: 3, 68 (monosilicon: Jiangsu Linyang TüV 50 6 Shenzhen Topry amorphous silicon: 38, amorphous 6.6) silicon: 30) Trinar Solar TüV 50 10 (Changzhou) Shenzhen 2 (amorphous 2 (amorphous Riyuehuan silicon) silicon) Others 388 109 Shanghaijiaoda 7 25 Total 858 284 2.1 (amorphous 7.5 (amorphous Source: Kong Li, The Development of PV Technology in China (Institute of Electrical Engi- Jinneng silicon) silicon) neering, Chinese Academy of Sciences, November 2006) 2 (amorphous 5 (amorphous Shenzhen Trony silicon) silicon) 145.7 (crystalline: 1673.5 (crystalline: Total 133, amorphous 1629, amorphous silicon: 12.7) silicon: 44.5)Source: Kong Li, The Development of PV Technology in China (Institute ofElectrical Engineering, Chinese Academy of Sciences, November 2006).Table 1.25: The Top 10 SWH Manufacturersin China Manufacturer Collector Type Himin Evacuated tube Tsinghua Sunshine All-glass evacuated tube All-glass evacuated tube Huayang and evacuated tube Aucma Evacuated tube Sijimicoe All-glass evacuated tube Guangpu All-glass evacuated tube Matel superconducting Gomang heat pipe Szlinuo Evacuated tube Sangle U-type evacuated tube All-glass evacuated tube Sunpu and evacuated tubeSource: 2007 China Renewable Energy IndustryBlue List, Energy: An Exporter’s Guide to China 47
  • Table 1.26: China’s Top 10 Small Hydropower Manufacturers Manufacturers Web Sites Zhejiang Jinlun Electromechanical Co. Ltd. Hangzhou Electric Equipment Works Kunming Electric Machinery Co., Ltd. / Sichuan Dongfeng Electric Machinery Co., Ltd. Zhejiang Linhai Electric Machinery Co. Ltd. Zhejiang Yueqing Electric Machinery Works Nanning Generating Equipment General Works Henan Xixia Hydropower Equipment Co. Ltd. Sichuan Hongya Hydro Turbine Works Hangzhou Nanwang Automatic Technologies Co. Ltd. Beijing Development and Reform Commission, (Chinese version)Table 1.27: Top 10 Consulting Companies in the EE Field in China Company Expertise Web Site China IPPR Engineering Corporation Construction, industry, infrastructure Wuzhou Engineering Design Research Institute Construction, industry China Electronic Engineering Design Institute Construction, industry, consulting Institute of Architecture Design & Research Construction, infrastructure Institute of Chinese Academy of Sciences (Chinese Web site) China Architecture Design & Research Group Construction China Enfi Engineering Technology Co. Ltd. Construction Sinothru Construction Consultants Co. Ltd. Construction, infrastructure CECIC Blue-Sky Consulting Management Co. Ltd. Industry China Coal Research Institute Industry China Machinery International Engineering Industry Design & Research Institute Fifth Survey & Design Institute of Railway Infrastructure Azure-international48 U.S. Department of Commerce | International Trade Administration
  • Table 1.28: Main EE Products and Players Company Product Web Site Green electric products, high-efficiency GE motors, energy conservation switches, electricity control systems, etc. High-efficiency motors, energy conservation ABB switches, electricity control systems, etc. Energy conservation switches, electricity Schneider Electric control systems, etc. High-efficiency motors, energy conservation Siemens switches, electricity control systems, etc. Electric meters, clean energy, UPS, monitor- Fuji Electric ing systems, etc. Industry control systems, high-efficiency Mitsubishi Electric in China motors, energy conservation switches, electricity control systems, etc. VSD motors, energy conservation power Delta Electronics, Inc. source, etc. Industry control systems, high-efficiency Panasonic China motors, energy conservation switches, electricity control systems, etc. Moeller Low-voltage electric appliances www.moeller.cnSource: Azure-internationalClean Energy: An Exporter’s Guide to China 49
  • n Annex 2. Chinese Policy-makers withAuthority over Clean Energy TechnologiesNational-level Decision-making Authorities andProcedureThe Constitution accords the National People’s Congress home and abroad and putting forward energy develop-(NPC) the highest position in China. Its main functions are: ment strategies and major policies; formulating develop- ment plans and making recommendations on energy sec-4  enact and revise basic laws in China; To tor reform; administering oil, natural gas, coal, power, and4  examine and approve the plan for national economic To other parts of the energy sector and national oil reserves; and social development. and formulating policy measures for energy conservation and renewable energy development.The State Council of the People’s Republic of China, The NDRC coordinates its activities with other govern-namely, the Central People’s Government, is the highest mental agencies as follows:executive entity of state power, as well as the highest bodyof state administration. It is responsible for: Ministry of Commerce (MOFCOM): 4  in charge of domestic and international trade and Is Carrying out the principles and policies of the Commu-4  economic cooperation; nist Party as well as the regulations and laws adopted by Formulates policies and regulations for standardizing 4  the NPC; market operation and circulation order; Dealing with such affairs as China’s internal politics,4  Promotes the establishment and improvement of the mar- 4  diplomacy, national defense, finance, economy, culture, ket system; deepens the reform of the circulation system; and education. Monitors and analyzes market operation, commodity 4  supply and demand, and conducts international eco-The State Council is composed of the General Affairs Of- nomic operation;fice, 28 ministries and commissions, 17 directly affiliated Coordinates state support matters; investigates the 4 entities, and seven working offices, in addition to a num- harm that subsidies and other government interven-ber of directly administered institutions. tions can bring to industries.Main Responsibilities and Functions of Individual Ministry of Environmental Protection (MEP):Institutions 4  in charge of natural ecological conservation and envi- IsNational Development and Reform Commission: After ronmental pollution prevention;merging with the State Council Office for Restructuring Strengthens supervision on nuclear safety; enforces 4 the Economic System and part of the State Economic and environmental regulations;Trade Commission in 2003, the State Planning Commis- Improves supervision and administration; 4 sion was restructured into the NDRC, which is a macro- Safeguards the environmental rights and interests of the 4 economic management agency under the State Council. public; promotes the sustainable development of theThe NDRC studies and formulates policies for economic society, economy, and environment.and social development, maintains a balance of economicaggregates, and oversees the overall economic system. Ministry of Science and Technology (MOST): One of NDRC’s roles is to coordinate China’s forward Proposes macro-strategy for scientific and technological 4 strategy and policy implementation in the energy and development, including policies, guidelines, and regula-environmental fields. NDRC’s missions in these fields are tions for promoting economic and social developmentas follows: in line with science and technology; Studies major issues of promoting economic and social 4 4 Advancement of China’s sustainable development strategy; development with science and technology;4 Research and preparation of drafts on the comprehen- Formulates plans and priority areas for scientific and 4  sive utilization and conservation of resources; technological development;4 The establishment and coordination China’s ecology Promotes national science and technology develop- 4  rebuilding plan; ment, including capacity building and compiling4 Policy creation for the comprehensive utilization and annual plans for the development of civil-use science conservation of resources; and technology;4 Coordination of the environmental protection industry. Proposes policies, guidelines, and measures to adapt science 4  The Energy Bureau of the NDRC is responsible for and technology system to the socialist market economy.studying energy development and utilization both atClean Energy: An Exporter’s Guide to China 51
  • Ministry of Land and Resources development plans, including water conservation Investigates and plans management, protection, and4  and demand management policies; rational utilization of such natural resources as land, Ensures integrated management of water resources, includ- 4  mineral reserves, and marine resources; ing atmospheric water, surface water, and groundwater; Drafts related laws, policies, and regulations on the4  Formulates water resource protection plans in accor- 4  management, protection, and utilization of such natural dance with related national laws, regulations, and stan- resources; dards concerning resource and environment protection; Formulates technical standards, specifications, and4  Formulates economic regulatory measures for the water 4  methods for the management of such resources; sector; conducts macro-economic regulation of the uti- Compiles and implements national plans for land use;4  lization of funds within the water industry; and provides Supervises land resource administrative departments in4  recommendations on water pricing, taxation, credit, and enforcing laws and plans on land, mineral, and marine financial affairs; resources; oversees protection of land owner rights as Reviews proposals and feasibility study reports on large- 4  well as settling disputes; and medium-sized capital construction projects in the Manages the State Oceanic Administration and State4  water sector; Bureau of Mapping and Surveying. Drafts and maintains technical standards for the water 4  sector as well as specifications and codes for water works;Ministry of Construction Organizes the protection of hydraulic facilities, water ar- 4  Formulates policies, guidelines, regulations, and4  eas, dykes, and coast lines and the regulation, reclama- related development strategies, as well as long- and tion, and development of major water bodies; medium-term plans, for urban planning, village and Guides activities related to rural water resources; 4  town planning, engineering construction, urban con- Organizes water and soil conservation nationwide. 4  struction, village and town construction, the construc- tion and building industry, and the housing and real Ministry of Finance estate industry; Formulates strategies, policies, guidelines, medium- and 4  Consults with industry on survey and design; over-4  long-term development plans, and reform programs sees the undertakings of urban utilities; and conducts for public finance and taxation; participates in macro- industrial administration; economic policy making; Provides guidance for the planning of cities, villages,4  Drafts laws and regulations on public finance and finan- 4  and towns; urban surveying; and municipal engineering cial and accounting management; organizes negotia- surveying; tions concerning external finance and debts; and signs Standardizes the building market; supervises engi-4  related agreements/accords; neering bidding; and oversees engineering quality Prepares the draft annual budget of the central govern- 4  and safety. ment and its final accounts; organizes budget imple- mentation;Ministry of Transportation Proposes tax legislation plans; reviews proposals on tax 4  Formulates development strategies, policies, guidelines,4  legislation and tax collection regulations with the State regulations, and long- and medium-term development Tax Administration before reporting to the State Council; plans for highway and waterway industries; supervises Administers the central expenditures; formulates 4  their implementation; government procurement policies; and manages the Oversees data analysis and information synthesis of4  budgetary non-trade-related foreign exchange of gov- the transport industry; controls the transportation of ernment agencies; the country’s key materials, cargo, and passengers; and Supervises central government expenditures for 4  organizes construction of key national highways and economic development, the appropriation of funds for waterway transportation; central government financed projects, and funds for Guides the reform of the transportation system; main-4  technological innovation and new product testing; tains fair competition in the highway and waterway Monitors the implementation of fiscal and tax policies, 4  transportation industry; laws, and regulations. Formulates scientific and technological policies,4  technical standards, and specifications for the trans- Figure 1.28 below displays the organizational structure of port industry; promotes the technical progress of the the Chinese Government. transport industry. Contact Information of Main National-Level Decision-Ministry of Water Resources making Authorities in Clean Energy Technology Formulates water-related policies, legislation, de-4  Table 1.29 below provides the contact information for key velopment strategies, and medium- and long-term personnel in the clean energy technology sector in China.52 U.S. Department of Commerce | International Trade Administration
  • Figure 1.28: Government Structure of the People’s Republic of China72Clean Energy: An Exporter’s Guide to China 53
  • Local-level Decision-making Authorities and ProcedureIn accordance with the existing administrative divisions ofthe country, there are People’s Congresses in the provinc-es (autonomous regions and municipalities directly underthe Central Government), counties (cities), and town-ships (towns), and those at or above the county level havestanding committees. There is government representationat all levels. Local People’s Congresses are the local organs ofstate power. They have the power to decide on importantlocal affairs in their respective administrative areas. ThePeople’s Congresses of provinces, autonomous regions,and municipalities directly under the Central Governmenthave the power to formulate local laws and regulations. Local people’s governments are local administrativeorgans of the state. Working under the unified leader-ship of the State Council, they report on their work to thePeople’s Congresses at the corresponding levels and theirstanding committees and to the organs of state adminis-tration at the next highest level. They have overall respon-sibility for the administrative work within their respectiveadministrative areas.73 There are altogether 23 provinces, five autonomousregions, and four municipalities (the last group includesBeijing, Shanghai, Tianjin, and Chongqing) under directcentral government control, as well as two special Admin-istrative Regions (Hong Kong and Macau).Table 1.29: Contact Information for Key Personnel in China’s CET Sector National 38 South Yuetan Street, Development and +86 10 6850 2872 Minister: Ma Kai Beijing, 100824 Reform Commission Ministry of 2 Dong Chang An Street, Minister: +86 10 6512 1919 cn/website/pubmail/ Commerce Beijing 100731 Chen Deming send_mail_en.jsp State Environmental 115 Nan Xiao Street, Xi Zhi Minister: http://english.sepa. Protection +86 10 6711 6801 Men Nei, Beijing, 100035 Zhou Shengxian Administration http://appweblogic. Ministry of Science +86 10 Minister: 15 B Fuxing Road, Beijing and Technology 5888 1521, 5888 1527 Wan Gang eng/index.htm book/guestbook.htm Ministry of Land and No. 64 Funei Street,100812 +86 10 6655 Minister: Resources Beijng,China 8407/08/20 Xu Shaoshi zxpt/ Ministry of No. 9 Sanlihe Lu, Xicheng Minister: +86 10 6839 4114 Construction District, Beijing, 100835 Wang Guangtao 11 Jianguomennei Dajie, Ministry of Minister: Dongcheng District, Beijing +86 10 6529 2114 Communication Li Shenglin 100736 Ministry of Water No. 2 Tiao Baiguang Road, Minister: webmaster@mwr. +86 10 6320 2114 Resources Beijing, 100053 Chen Lei 3 Nansanxiang Sanlihe, Minister: Ministry of Finance +86 10 6855 1114 / Beijing 100820 Xie Xu54 U.S. Department of Commerce | International Trade Administration
  • n Annex 3. Guidance Catalogue of the Re-newable Energy Industry 74 Status Quo of Serial Number Project Instruction and Technical Indicator Development I. Wind energy Wind energy power generation It is used for rural electrification where the grid fails to Off-grid wind power cover, including two kinds of electricity generation/ sup- 1 Basic commercialization generation ply, individual household plant and concentrated village plant. It is used for grid-connected electrification, including land Land networking wind power and offshore network-forming wind power electricity electricity generation: off- On-grid wind power 2 generation, which can generate electricity through single shore networking electricity generation machine networking and multi-machines networking generation; technological electricity generation. research and development Equipment/fitting manufacture It is used for undertaking technological and economic evaluation upon regional wind energy resources so as to Wind resources select the correct wind field. Its main functions include: Technology research, devel- 3 evaluation and measurement of treatment and statistical analysis of wind, opment or introduction analysis software formation of wind map, wind resource evaluation, wind generating set and annual electricity yield by wind field and etc. It is used for optimized design of electricity field (i.e. micro-location selection and arrangement plan design and optimization of wind generating set). Its main func- tions include: confirming the influence of wake flow of wind generating set and adjusting the distributing Wind field design distance between wind generating sets, undertaking Technology research and 4 and optimization analysis and prediction upon noise of wind generating set development software and wind field, eliminating the section failing to meet the requirement of technology, land quality and environment; optimizing the location-selection of wind generating set automatically, providing visualized interface of the design process, undertaking technical and economic analysis and etc. It is used for concentrated and remote monitoring of wind generating set and wind field operation. Its main func- tions include: timely collecting, analyzing and reporting Wind concentrated the wind situation and set and supervision data of wind Technology research and 5 and remote moni- field operation by means of modern information and com- development toring system munication technology, undertaking efficiency optimiza- tion and safety guarantee system automatically or via the feedback of instruction. Construction of wind field and main- It is used for transport of land and offshore wind generat- Technology research and 6 tenance of exclusive ing set, on-the-spot lift and maintenance. development equipment It is used for independent system and concentrated village electricity generation, including wind power inde- Off-grid wind pendent electricity generation and wind-solar photovol- 7 turbines generating Basically commercialized taic hybrid generate electricity system to ensure its system system safety, economic and continuous and reliable electricity supply.Clean Energy: An Exporter’s Guide to China 55
  • Status Quo of Serial Number Project Instruction and Technical Indicator Development Land wind generating set: It is used for networking wind power generation, includ- Wind power gener- above-sea wind generating ing land and offshore generating set. Offshore wind 8 ating set of network- set of the primary stage of generating set shall be adapted to oceanic geology, forming commercialization; technolo- hydrologic condition and climate. gy research and development Total design It is used for the total design of structural dynamics mod- Technology research, 9 software of wind eling and analysis, limit load and fatigue load calculation, development or introduction generating set and win generating set dynamic emulation. It is used for supporting large scale wind mill set with its Technology research and 10 Wind mill blade capacity no less than 1,000 kw. development Wind mill blade It is used for designing large scale Wind mill blade pneu- Technology research and 11 design software matic shape and its construction technique development It is used for manufacturing of high strength, low-mass, Wind mill blade Technology research and 12 large-volume blade, including GRP and carbon fiber material development reinforced plastics It is used for supporting wind generating set with its Technology research and 13 Wind mill wheel hub capacity no less than 1,000 kw. development Wind mill driving It is used for supporting wind generating set with its Technology research and 14 system capacity no less than 1,000 kw. development Wind mill deviation It is used for supporting wind generating set with its Technology research and 15 system capacity no less than 1,000 kw. development Wind mill braking It is used for supporting wind generating set with its Technology research and 16 system / mechanic capacity no less than 1,000 kw. development braking At the beginning of com- It is used for supporting wind generating set with its mercialization, technology 17 Wind mill generator capacity no less than 1,000 kw, including double- fed research and development generator and permanent magnet generator. (permanent magnet genera- tor) It is used for supporting wind generating set with its Wind generating capacity no less than 1,000 kw, including: off-grid wind operation control Technology research and 18 generating controller; speed-loss wind generating con- system and con- development troller; variable-speed constant-frequency wind-power verter generating controller and converter. Wind mill gener- It is used for ensuring the safety of wind generating set Technology research and 19 ating set safety guar- on occasion of extreme weather, system failure and grid development antee system failure Testing equipment for compatibility It is used for testing the compatibility between electric- between electricity ity and magnet in wind mill generating set and lighting Technology research and 20 and magnet in wind impulse in order to make the set adaptable to natural development mill generating set, environment. lighting impulse Design of Integra- tion between Wind It is used for evaluating the large-scale wind field integra- Technology research and 21 Power and Power tion system and stability of the grid development Grid and grid stabil- ity analysis software It is used for monitoring and collecting information about Wind field electricity the performance and generating capacity upon the wind generating capacity generating capacity, analyzing and estimating the varia- Technology research and 22 prediction and grid tion of the wind field in the second day and its generat- development scheduling and ing output, making scheduling plan for grid enterprise matching software and promoting large-scale wind field development and operation.56 U.S. Department of Commerce | International Trade Administration
  • Status Quo of Serial Number Project Instruction and Technical Indicator Development Wind field smooth It is used for providing support for the smooth transition Technology research and 23 transition and con- of large-scale wind field in case of grid integration failure. development trolling system II. Solar energy Utilization of solar energy and heat utilization Off-grid solar energy It is used for supplying electricity to the resident area 24 photovoltaic elec- where the grid fails to cover, including independent Basic commercialization tricity generation household system and concentrated village. Networking solar It is used for supplying grid with electricity, including Technology research and energy photovoltaic 25 building integrated solar energy photovoltaic electricity development and project electricity generation model generation It is used for supplying electricity to the resident area Solar energy for where the grid fails to cover, including tower solar energy 26 electricity electricity generator, trough-shaped solar energy electric- Technology development generation ity generator, disk-shaped solar energy electricity genera- tor and instant focal solar energy electricity generator It is used for supplying electricity to scattered meteoro- Industrial photo- logical station, seismic station, highway station, broadcast 27 voltaic electricity and television, satellite ground station, hydrometry, solar Commercialization resources energy navigation mark, highway and railway signal and solar energy cathodic protection system. Solar energy lighting Including solar energy street lamp, yard lamp, lawn lamp, 28 Commercialization system billboard, solar energy LED cityscape lamp and etc. Including: solar energy-driven automobile, solar energy Technology research and 29 Solar energy vehicle motor-assisted bicycle and etc. development, project model Solar energy pho- It is used for providing fresh water to remote island resi- Technology research and 30 tovoltaic sea water dent area where fresh water is in scarcity. development, project model desalination system It is used for providing fresh water to the western drought-hit area, and remote and population-scattered 31 Photovoltaic Pump Commercialization area, to the construction and amelioration of grassland and reforestation in the desert. It is used for providing life heat water to the residents, in- Solar energy water 32 cluding flat-type solar energy water heater, vacuum solar Commercialization heater for household energy water heater and etc. Solar energy con- It is used for providing heat water or heating to the resi- Technology research and 33 centrated heating dents or industry and commerce, including solar energy development, extension and system concentrated application It is used for realizing heat and cold convertibility and Technology research and Solar energy air- 34 providing cooling and air-conditioner service (via solar development and model conditioner system energy collector and absorption refrigerating machine. project It is used for meeting the demand of energy in build- ing via integrating solar energy collector(realizing solar Zero solar energy Technology research and 35 energy collecting system and air-conditioner system) building complex development in the building(roof and external wall) and solar energy photovoltaic Cell. Equipment/ outfit manufacture Off-grid solar energy photovoltaic elec- It is used in independent household system and concen- 36 Commercialization tricity generating trated village plant system Networking solar It is used for supplying energy to grid, including building energy photovoltaic Technology research and 37 integrated solar energy photovoltaic electricity generat- electricity generat- development, project model ing system. ing systemClean Energy: An Exporter’s Guide to China 57
  • Status Quo of Serial Number Project Instruction and Technical Indicator Development Including: tower solar energy light and heat electricity Solar energy elec- generating system, trough-shaped solar energy light 38 tricity generating and heat electricity generating system, disk-shaped solar Technology development system energy light and heat electricity generating system and instant focal solar energy generating system. Crystal silicon solar Including: Single crystal silicon solar energy cell and multi- Commercialization and tech- 39 energy cell crystal silicon solar energy cell nology amelioration Including: multi-junction amorphous thin-film solar cell, Membrane solar Technology research and 40 polycrystalline thin-film solar energy cell, compound thin- energy cell development film solar energy cell Including: flexible underlay solar energy cell, spot light solar energy cell, HIT heterojunction solar energy cell, Other new type solar organic solar energy cell, nanometer noncrystal solar Technology research and 41 energy cell energy cell, mechanic stacking solar energy cell, thin-film development noncrystal silicon/minicrystal stacking solar energy cell and etc. It is used in architectural integrated solar energy photo- voltaic electricity generating system, including semi- Architectural solar translucidus photovoltaic electricity generating system, Technology research and 42 energy arrays photovoltaic that can be interchanged with building units, development photovoltaic glass curtain wall, photovoltaic sun-shield and etc. It is used for manufacturing solar energy cell and its component parts, including: solar energy silicon furnace Solar energy cell charge outfit manufacture, multicrystal ingot casting, wire and its component cutting machine, saw squarer, silicon slice polishing equip- Technology research and 43 parts manufacture ment, silicon slice cleaner, diffusion equipment, PECVD, development or introduction equipment hard coat equipment, screen printing, drying and sinter equipment, wafer scriber, automatic welding, component part layer press and etc. Including: solar energy cell separation equipment, solar Solar energy cell test Technology research and 44 analog meter, high voltage insulation test equipment and equipment development etc. Solar cell auxiliary Including: low low-iron toughened glass, EVA, solar cell Technology research and 45 material for produc- back packaging composite membrane, silver plasm and development tion use aluminum plasm, weld and etc. Photovoltaic elec- tricity generating It is used for controlling intellectually the process of elec- Technology research and 46 system, controller of tricity charging and discharging development electricity use and discharging Ac/dc inverter for It is used for off-grid and networking ac/dc inverter, the photovoltaic elec- latter needs the function of networking invert, maximum Technology research and 47 tricity generating power tracking, protection for the prevention of island development system, effect and etc. Household photo- It is used for photovoltaic and wind/light complementary voltaic and wind/ Technology research and 48 electricity generating system with its volume less than 1 light complemen- development kw. tary control/inverter It is used for independent photovoltaic and wind electric- (exclusive)storage ity generating system, with the endurance capacity for Technology research and 49 cell excessive charging and discharging performance and development long service life.58 U.S. Department of Commerce | International Trade Administration
  • It is used in independent photovoltaic electricity genera- tion and wind power electricity generation system; its Technology research and Redox liquid storage 50 storage capacity shall reach one hundred megawatts development and project cell when its power is ranged from dozes to several hundred model kw. Status Quo of Serial Number Project Instruction and Technical Indicator Development Photovoltaic silicon Technology research and 51 It is used for the production of solar cell crystal silicon. material development or introduction Concentrated and remote control It is used in the operation data in collecting, transmitting system for the use solar radiation, environmental parameters and photovol- Technology research and 52 of photovoltaic taic electricity generation and realizing concentrated or development electricity generat- remote control monitoring. ing system Reflector for the use of solar energy heat It is used for supporting various solar energy light and Technology research and 53 and light electricity heat electricity generating system. development generation Automatic tracking It is used for supporting various solar energy light and equipment for light heat electricity generating system so as to automatically Technology research and 54 and heat generating track solar radiation, adjust the angle of the reflector and development reflector absorb the maximum solar energy. It is used for supporting various solar energy light Light and heat col- and heat electricity generating system to absorb solar Technology research and 55 lector radiation from the reflector, i.e. “solar boiler” within small development volume and high conversion efficiency. Light and heat It is used for supporting various solar energy light and electricity generat- heat electricity generating system, ensuring the relative Technology research and 56 ing and heat storage stability of light and heat electricity generation via the development equipment heat energy absorbed by the storage collector. It is used for supporting instant solar energy light and Instant light and heat electricity generating system, including alkali metal Technology research and 57 heat electricity gen- thermoelectric converter, Semiconductor electricity gen- development erating equipment erator, thermion electricity generator and photovoltaic electricity generator. Solar energy light It is used for the design and emulation of optimized archi- and heat system, tectural heating equipment geared to the applied solar architectural appli- Technology research and energy light and heat system in different regions, different 58 cation design, opti- development and extension lighting conditions in China; for measurement and evalu- mization, measure- and application ation upon the solar energy light and heat system used in ment and evaluation the processing of building. software. III. Biomass energy Biomass energy and biological fuel production Gas supply and elec- tricity generation by Including large scale livestock and poultry farm, Breeding Commercialization, extension 59 large and medium- area, urban sewage project and application sized methane project Instant Electricity by Technology update and 60 Electricity generation by utilizing crop straw, and wood Biomass fuel project model Biomass liquefied Technology research and Liquefied gas supply and electricity generation by utiliz- 61 gas supply and elec- development, extension and ing crop straw, and wood tricity generation application Electricity gen- Electricity generation by utilizing urban solid refuse, 62 eration by utilizing Basic commercialization including fuel and methane. urban solid refuseClean Energy: An Exporter’s Guide to China 59
  • Biological liquefied Production of liquefied fuel by utilizing non-grain crop Technology research and 63 fuel and wood biomass. development Transforming crop straw and wood to solid fuel as the 64 Biomass solid fuel Project model alternative of coal. Status Quo of Serial Number Project Instruction and Technical Indicator Development Equipment/ component parts manufacture and raw material production It is used for supporting biomass direct-fired boiler sys- Biomass direct-fired 65 tem, for which technological performance and specifica- Technology update boiler tion shall be used. It is used for supporting electricity generation via lique- Biomass fuel gas Technology research and 66 fied biomass. Its performance and specification shall be combustion engine development used in liquefied biomass electricity generation system. Liquefied biomass It is used for cracking tar arisen in the process of gasifica- Technology research and 67 tar catalyzing and tion to available and disposable gas. development cracking equipment Liquefied biomass Technology research and It is used for producing the aforesaid various liquefied 68 fuel production development and project biomass fuel. outfit model It is used for providing various biological fuel production Plantation of energy Project model, extension and 69 with non-crop biomass material such as sweet sorghum, plant application cassava, purging-nut tree, sugar cane. It is used for breeding and cultivating energy crop which Technology research and Breeding of energy boasts stable and high yield and, innocuity to ecological 70 development and project plant environment and adaptability to barren mountains and model waste, sandlot and alkali land. High-efficiency, It is used for improving the yield of methane project and Technology research and 71 wide-range methane its usage in relatively low temperature. development strain improvement V. Geothermal energy Electricity generation by utilizing geothermal energy and heat utilization Including electricity generation by utilizing geothermal Electricity gen- steam, double-circulation geothermal electricity generat- Technology research and 72 eration by utilizing ing system and flash geothermal electricity generating development geothermal energy system (the latter two is adaptable to middle and low geothermal resources. Heat supply by Including single circulation direct heating and double- Project model, extension and 73 utilizing geothermal circulation indirect heating. application energy Including underground water source, river and lake water Geothermal source source, sea water source, sewage sources (including urban 74 heat pump heating Project model sewage, industrial sewage, hospital sewage)and soil geo- and/or air conditioner thermal source heat pump. Underground The storage types include such energies as solar energy, Technology research and 75 thermo energy and the cool and heat set off by air conditioners in the development storage system buildings. Equipment/outfit manufacture It is used for drilling geothermal well, which shall be Drilling equipment adapted to its geological structure, high temperature and Technology research and 76 exclusively for geo- corrosion hydraulic conditions and the requirement for development thermal well use making the well. It is used for supporting geothermal heating and geother- Geothermal well Technology research and 77 mal source heat pump system, which shall be adapted to pump development its high temperature and corrosion. Technology research and Water source ther- It shall be adapted to the temperature of underground 78 development and project mal pump assembly water or sea water as well as their temperature. model60 U.S. Department of Commerce | International Trade Administration
  • Geothermal Energy It is used for undertaking measurement and evaluation Technology research and design, optimiza- 79 upon the building adaptable to the geothermal energy in development, extension and tion and evaluation different regions and with different types. application system Status Quo of Serial Number Project Instruction and Technical Indicator Development The temperature difference of water is utilized to cool and Utilization of water heat the building, including utilizing such water sources Project model, extension and 80 heat source as underground water, sewage in urban treatment  sew- application age treatment factory. V. Ocean energy Ocean power generation Including: tidal power generation, wave power genera- Technology research and Ocean power gen- 81 tion, marine thermoelectric power generation and ocean development and project eration current power generation. model Equipment/ outfit manufacture Including: the outfit of wave power generation, marine Ocean power gen- Technology research and 82 thermoelectric power generation and ocean current eration outfit development power generation. VI. Hydropower Waterpower Networking Water- Various waterpower in line with the requirement of water- 83 Commercialization power shed development, and environmental protection It is used for electricity and energy usage in in-place de- Small-scale off-grid 84 velopment, neighborhood electricity supply and solving Commercialization waterpower the problems in remote area for electricity and energy use. Equipment/outfit manufacture It is used for manufacture and type selection of water tur- Water turbine-typed bine, improvement of the efficiency and quality of water Technology research and 85 spectrum turbine, reduction of construction cost and standardiza- development tion of the equipment market. It is used for the automatic management of hydroelectric Automatic hydro- 86 operation, the improvement of its performance and the Technology update electric technology reduction of its operational cost.  Large-scale and high-efficiency It is used for improving the capacity, performance and Technology research and 87 water turbine gener- efficiency of water turbine generating set. development ating set It is used in small waterpower with its capacity less than 1,000 kw for realizing the control and integration of such Integration technol- auxiliary equipments as petroleum, water and gas and 88 Technology update ogy of small plant such supervision integration as speed regulation, excita- tion, protection and measurement, improving its credibil- ity and reducing its equipment construction cost.Clean Energy: An Exporter’s Guide to China 61
  • Section 2: Clean Energy Technologies DefinedThis report covers clean energy technologies (CETs) in- Textbox 2.1: Biomass Energy Resources.cluding renewable energy technologies, energy efficiency,hybrids and cogeneration, and clean transportation tech-nologies. CETs are more environmentally friendly than Solid biomass: Wood, vegetal waste (including wood waste and crops), conventional crops (oil and starch crops), charcoal,traditional, fossil fuel-based technologies. CETs can either animal wastes, and other wastes (including the biodegrad-use natural resources such as sunlight, wind, rain, tides, able fraction of municipal solid wastes) used for energygeothermal heat, and plants, which are naturally replen- production.ished, and/or use processes to use energy more efficiently. Liquid biofuels: Biodiesel and bioethanol (also includes CETs include renewable energy, hybrid and co- biomethanol, bio-oil, and biodimethylether).generation, and energy efficiency technologies for powergeneration and alternative fuels and advanced technolo- A) Biodiesel: Biodiesel can be used in pure form or may begies for transportation. This chapter presents an overview blended with petroleum diesel at any concentration for use in most modern diesel engines. Biodiesel can be producedof these technologies. from a variety of feedstocks, such as oil feedstock (rapeseed, soybean oils, jatropha, palm oil, hemp, algae, canola, flax, and mustard), animal fats, or waste vegetable oil.n Renewable Energy Technologies B) Bioethanol: The largest single use of ethanol is as a fuelRenewable energy technologies considered in this report for transportation or as a fuel additive. It can be producedinclude biomass and biofuels, waste-to-energy, solar power, from a variety of feedstocks such as sugarcane, corn, andwind power, geothermal, hydropower, and ocean power. sugar beet. It can also be produced from cassava, sweet sorghum, sunflower, potatoes, and hemp or cotton seeds or derived from cellulose waste.BiomassBiomass consists of plant and plant-derived material. Biogas: Methane and carbon dioxide produced by anaerobicSources of biomass include agricultural residues such digestion or fermentation of biomass, such as landfill gas andas rice hulls, straw, bagasse from sugarcane production, digester gas.wood chips, and coconut shells and energy crops such assugarcane or switch grass. Biomass can be used directlyfor energy production or processed into fuels. Examples products produced from these biomass conversion pro-of biomass fuels are liquid and gel fuels including oil cesses are electricity, heat, and biofuels.and alcohol and pelletized biomass for gasification andcombustion. Liquid biomass–derived fuels can be used as Combustionsubstitutes for or additives to fossil fuels. Direct combustion is a widely used process where bio- Although the conversion of biomass into energy mass is converted into useful power through exposureresults in the release of carbon into the atmosphere, to high temperatures. Heat from the process can be usedbiomass-based energy is considered to be carbon neutral to produce steam, which in turn can drive a turbine tobecause of the carbon sequestered by plants during the generate electricity. Depending on the combustion pro-growth of the biomass material. For biomass resources to cess, various pre-treatment steps such as sizing (shred-be renewable, their cultivation must be managed carefully ding, crushing, and chipping) and drying are ensure sustainable harvesting and land use. The use of The heating value and moisture content of the biomassbiomass for energy production can result in competition determine the efficiency of the combustion process. Dry-with food crops, either directly, when food crops them- ing prior to the combustion process (e.g., with waste heat)selves are used for energy production, or indirectly, when helps to lower the moisture content and raise the heatingland and water that would be used to grow crops is used value to acceptable levels.instead for energy crops. Biomass technologies include equipment for indus- Gasificationtrial processes that produce heat and steam; electrical In the gasification process, biomass is thermochemi-power generation through combustion, liquefaction, or cally converted into gaseous fuel by means of partialgasification; and transportation fuels such as ethanol oxidation of the biomass at high temperatures. Thisand biodiesel. Biomass is converted into energy through process requires less oxygen than combustion. In ad-one of two pathways: thermochemical and biochemi- dition to the gaseous fuel, gasifiers produce heat andcal. Thermochemical conversion occurs by combustion, ash. To maximize the efficiency of gasification-basedgasification, or pyrolysis. Biochemical conversion results systems, beneficial uses should be developed for allfrom anaerobic digestion or fermentation. The energy three products.Clean Energy: An Exporter’s Guide to China 63
  • The main processes of a gasification plant are fuelfeeding, gasification, and gas clean-up. Fuel feedingprepares and introduces the feedstock into the gas-ifier. The gasifier converts the feedstock into a fuel gascontaining carbon monoxide, hydrogen, and methane.In the gas clean-up process, harmful impurities areremoved from the fuel gas to allow for safe usage in gas-burning engines or turbines.PyrolysisPyrolysis is also a thermochemical conversion processthat converts biomass into liquid, solid, and gaseoussubstances by heating the biomass to about 500 degreesCelsius in the absence of air. The pyrolysis process in-cludes feedstock preparation and the application of liquidand char for heat production. Alternative technologiesinclude rapid thermal processing and the vacuum pyroly-sis process. The latter involves the thermal decomposition Biofuelsof matter under reduced pressure for conversion into fuels As defined by the United Nation’s, “there are variousand chemicals. Fast pyrolysis refers to the rapid heating pathways to convert feedstock and raw materials intoof biomass in the absence of oxygen. Feedstocks for the biofuels. First-generation biofuel technologies, such as thepyrolysis process include forestry residue (sawdust, chips, fermentation of plant sugars or the transesterification ofand bark) and by-products from the agricultural industry plant oils, are well established. Second-generation biofuel(bagasse, wheat straw, and rice hulls). technologies include, among others, acid hydrolysis of wood chips or straw for bioethanol. The technology forFermentation extracting oil from oilseeds has essentially remained theAnaerobic digestion is a type of fermentation that bio- same for the last 10 to 15 years.”75 Biodiesel production is achemically converts organic material, especially ani- relatively simple process. However, economic small-scalemal waste, into biogas that consists mainly of methane production of biodiesel still requires sufficient feedstock,and carbon dioxide and is comparable to landfill gas. some equipment, capital, and skills.The biomass is converted by bacteria under anaerobic While many of the above conversion processes are ac-conditions—without oxygen present. Biogas plants consist complished on a large scale, new and emerging technolo-of two components: a digester (or fermentation tank) and gies make it possible to produce electricity, heat, and fuelsa gas holder. The digester is a cube- or cylinder-shaped on a smaller scale and with modular systems. These tech-waterproof container with an inlet into which the ferment- nologies are being developed for off-grid applications andable mixture is introduced in the form of liquid slurry. at an economic scale suitable for developing countries. Fermentation of sugars is a biochemical process that An example of a modular biopower system [50 kilowattsentails the production of ethanol (alcohols) from sugar electric (kWe)] is pictured above.76crops (sugarcane, beet) or starch crops (maize, wheat). The Where biomass is produced in conjunction withbiomass is ground and the starch is converted by enzymes agriculture for food production, it represents an ad-and bacteria into sugars. Yeast then converts the sugars into ditional value stream. Biofuels are produced in manyethanol. Pure ethanol can be obtained by distillation; the countries, albeit in varying quantities and at differentremaining solids can be used as cattle feed. In the case of costs. Liquid biofuels have the potential to providesugarcane, the remaining bagasse can also be used as fuel communities in developing countries with multiplefor boilers or electricity generation processes. These mul- energy services such as electricity for lighting, smalltiple applications allow ethanol plants to be self-sufficient appliances, and battery charging; income generationand even to sell surplus electricity to utilities. and educational activities; and pumping water, cook- Bioethanol is primarily produced by fermentation of ing, and transportation.sugarcane or sugar beet. A more complex and expensiveprocess involves producing bioethanol from wood or Waste-to-Energystraw using acid hydrolysis and enzyme fermentation. Waste-to-energy technology produces energy from waste,Production of bioethanol from corn is a fermentation pro- such as waste from a city’s municipal waste system, farmscess, but the initial processing of the corn requires either and other agricultural operations, or commercial and in-wet or dry milling. Residues from corn milling can be used dustrial operations. Large-scale waste-to-energy systemsor sold as animal feed. Bioethanol from wheat requires an can supply heat or electricity in utility-scale electric powerinitial milling and malting (hydrolysis) process. plants or district heating systems. Small-scale systems can64 U.S. Department of Commerce | International Trade Administration
  • provide heating or cooking fuel and electricity to individu-al farms, homes, and businesses. In incineration systems, waste is converted into use-ful energy through combustion. Modern incinerationplants include materials separation processes to removehazardous or recyclable materials from the waste streambefore it is incinerated. Improvement in combustion pro-cesses and emissions controls minimizes the emission ofparticulate matter, heavy metals, dioxins, sulfur dioxide,and hydrochloric acid associated with waste combus-tion. Incineration plants emit fewer air pollutants thancoal-fired plants but more than gas-fired plants. WhileDenmark and Sweden are leaders in the use of incinera-tion technologies for energy generation, other European Photovoltaicscountries and Japan use the technology as a primary PV power systems convert light from the sun into electric-waste-handling system. ity. PV cells are devices made of semiconducting materials Landfill gas systems collect landfill gas for use in similar to those used in computer chips. When these de-boilers, process heaters, turbines, and internal com- vices are connected to an electrical circuit and exposed tobustion engines, thereby reducing direct emissions light, they release electrons that flow through the circuit,of methane and other gases into the atmosphere or creating an electric current. PV panels, shown above,77 aredisplacing the use of fossil fuels for power generation. devices that contain a varying number of PV cells and con-Landfill gas contains varying amounts of methane and vert sunlight into direct current (DC) electricity. PV panelsother gases, depending on the type of deposited waste are typically incorporated into systems that combineand the characteristics of the landfill. Landfill gas can batteries and electronic control equipment to provide full-be piped directly to nearby buildings and used in boil- time DC and/or alternating current (AC) power. Typicalers for heat or industrial processes or used in on-site applications include lighting, electronics, telecommunica-electric generation plants that can supply electricity to tions, and small-scale water pumping.the landfill itself, nearby industries, or to the electricpower grid. The amount and type of waste in a landfill, Solar Thermalits size, extent of landfill operating activity, and proxim- Solar thermal technology uses flat and concentratingity to energy users are all factors that affect a landfill absorbers that collect heat energy from the sun for suchgas project’s viability. Environmental precautions to processes as crop drying, food processing, water and spaceminimize the emission of air pollutants are necessary to heating, industrial process heat, and electricity environmental regulations. Solar water heating systems, such as the ones pictured Anaerobic digester systems convert animal and hu- in China’s Yunnan Province,78 consist of a solar collectorman waste into methane and carbon dioxide, which can and a storage tank. The collector is typically a rectangularbe used in turbines and internal combustion engines in box with a transparent cover, through which pipes run,electric power plants. Municipal waste treatment plants carrying water that isand confined animal feeding operations can be sources of heated by the sun. Thewaste for the digesters. Converting the waste into electric- pipes are attached to anity reduces air and water pollution and the costs associ- absorber plate, which isated with processing the waste. painted black to absorb Other new and emerging waste-to-energy technolo- the heat. As the sun’s heatgies use thermal and chemical conversion processes to warms the collector, theconvert solid waste into fuels. water is heated and passed to the storage tank, whichSolar Power stores the hot water heatedSolar power is energy from the sun. Solar technolo- for domestic use. Asgies convert light and heat from the sun into useful explained by the Nationalenergy. Photovoltaic (PV) systems convert sunlight into Renewable Energy Labora-electricity. Thermal systems collect and store solar heat tories, “Solar water heating systems can be either active orfor air and water heating applications. Concentrating passive. Active systems rely on pumps to move the liquidsolar power systems concentrate solar energy to drive between the collector and the storage tank, while pas-large-scale electric power plants. Solar power systems sive systems rely on gravity and the tendency for water toproduce little or no emissions and have a minimal im- naturally circulate as it is heated. Simpler versions of thispact on the environment. system are used to heat swimming pools.”79Clean Energy: An Exporter’s Guide to China 65
  • Solar heating systems to dry food and other crops can dish-engine, and power tower technologies. Parabolic-improve the quality of the product while reducing waste. trough systems concentrate the sun’s energy through longSolar driers outclass traditional open-air drying and have rectangular, u-shaped mirrors, which are tilted towardlower operating costs than mechanized fuel-based driers. the sun and focus sunlight on a pipe, heating the oil in theThe three types of solar driers are natural convection, pipe and then using it in a conventional steam generatorforced convection, and tent driers. In natural convec- to produce electricity. Dish-engine systems use a mirroredtion driers, air is drawn through the dryer and heated as dish similar to a satellite dish, which collects and concen-it passes through the collector, then partially cooled as it trates the sun’s heat onto a receiver, which in turn absorbspicks up moisture from the product drying. The flow of air the heat and transfers it to fluid within the engine. Theis caused by the lighter warm air inside the dryer moving heat causes the fluid to expand against a piston or turbinetoward the cooler outside air. In forced convection, a fan is to produce mechanical power, which is then used to run aused to create the airflow, reducing drying time by a factor generator to produce electricity. Power tower systems useof 3 and the area of collector required by up to 50 percent. a large field of mirrors to concentrate sunlight onto the topA photovoltaic panel can be used to generate electricity of a tower, where molten salt is heated and flows throughfor the fan. Tent driers combine the drying chamber and a receiver. The salt’s heat is used to generate electricitycollector and allow for a lower initial cost. Drying times through a conventional steam generator. Because moltenare not much lower than for open-air drying, but the main salt efficiently retains heat, it can be stored for days beforepurpose is to provide protection from dust, dirt, rain, being converted into electricity and ensures power pro-wind, and predators; tent driers are usually used for fruit, duction on cloudy days and after the sun has, coffee, or other products for which wastage is other-wise high. Wind Power Wind power technology converts energy in the wind intoPassive Solar useful power. Historically, wind power technology wasPassive solar systems integrate solar air heating technolo- used for mechanical applications such as grain millinggies into a building’s design. Buildings are designed with and water pumping and is still used for such purposes.materials that absorb or reflect solar energy to maintain Today, the primary market for wind power technologycomfortable indoor air temperatures and provide natural is for wind turbines, which convert wind energy intodaylight. Floors and walls can be designed to absorb and electricity.retain heat during warm days and release it during cool Wind power forevenings. Sunspaces operate like greenhouses and capture electricity generation issolar heat that can be circulated throughout a building. the fastest growing seg-Trombe walls are thick walls that are painted black and ment of the power sector,made of a material that absorbs heat, which is stored during driven by the low cost ofthe day and released at night. Passive solar designs can also electricity generation,cool buildings, using vents, towers, window overhangs, and short project developmentother approaches to keep buildings cool in warm climates. and construction times, and government policiesOther Solar Technologies favoring clean and renew-Solar technologies can be used for residential, com- able energy technologies.mercial, and industrial applications. Commercial and The world’s approximatelyindustrial applications can include air preheating for 74,000 megawatts (MW)commercial ventilation systems, solar process heating, of installed wind capacity meet about 1 percent of theand solar cooling. A solar ventilation system can preheat total global electricity demand. In the United States, asthe air before it enters a conventional furnace, reducing of December 2007, total installed wind capacity was ap-fuel consumption. Solar process heat systems provide proximately 14,000 MW, with an additional 5.7 MW underlarge quantities of hot water or space heating for indus- construction. Wind power accounts for about 20 percenttrial applications. A typical system includes solar collec- of Denmark’s electricity production, 9 percent of Spain’s,tors that work with a pump, a heat exchanger, and one and 7 percent of Germany’s.or more large storage tanks. Heat from a solar collector According to a recent study,80 India and China alonecan also be used for commercial and industrial cooling are expected to add 36,000 MW of wind power capacity byof buildings, much like an air conditioner but with more 2015, representing over 80 percent of the Asian wind mar-complex technology. ket during that period. Market growth in those countries is Concentrated solar power systems focus sunlight on being driven by the growth of independent power produc-collectors that serve as a heat source to produce steam ers (IPP) in India and by electric utilities in China. Majorthat drives a turbine and electricity generator. Concen- wind turbine manufacturers, including Vestas, GE, Suzlon,trating solar power systems include parabolic-trough, Gamesa, and Nordex, are establishing manufacturing66 U.S. Department of Commerce | International Trade Administration
  • facilities in India and China on the basis of strong market accessible at shallow levels. Areas with usable geothermalgrowth for their products in those countries. Suzlon, an resources include the western United States, the south-Indian wind manufacturing company, is also active in the western coast of South America, a few areas in Europe andglobal wind market, including Europe and North America, East Africa, and a significant portion of the Asia–Pacific re-as both an equipment supplier and project developer. gion. New developments in geothermal power technology Large wind power generating plants, often called will use heat from hot, dry rock formations in and beneathwind farms, can be integrated into agricultural and other the earth’s uses; a wind farm in Hawaii is shown at right.81 Windfarms typically use tens to hundreds of wind turbines Hydropowerrated between 600 kilowatts (kW) and 5 MW and produce Hydropower is the conversion of energy embodiedbetween 50 and hundreds of megawatts of electric power. in moving water into useful power. People have beenIn some countries, especially Denmark, Germany, and the harnessing the power of water for thousands of years forUnited Kingdom, interest in offshore projects is increas- irrigation and operation of mechanical equipment anding. In these projects, turbines are installed in the shallow more recently for electricity generation. In fact, hydro-waters of coastal areas, where they are exposed to the electric power now supplies about 19 percent of thestrong prevailing coastal winds and can be located close to world’s electricity. In the United States, hydropower ac-large load centers. counts for only 7 percent of the total electricity produc- Medium-sized turbines, between 10 and 600 kW, are tion, but over 70 percent of the total installed renewableused in distributed energy applications, supplementing or energy capacity. Mostreplacing grid power on farms and other commercial or industrialized nationsindustrial sites. Small wind turbines, in the 100 watt (W) to have developed their10 kW range, are suitable for household, water pumping, hydropower potential, butor village power applications. undeveloped resources Conventional horizontal-axis wind turbines for electric- remain in countries suchity generation consist of a rotor, nacelle, tower, and founda- as China, India, Brazil,tion. The rotor consists of wind-spun blades that drive a and regions of Africa andgearbox and electric generator in the nacelle, which is lo- Latin America. In some countries with access to largecated at the top of the tower. (Some turbine designs do not untapped hydro resources, the resources are located farinclude a gearbox.) The tower and foundation support the from electric load centers, posing a problem for trans-nacelle and rotor at a height above the ground where winds mission of electricity over long distances. Solving thisare strong. Other wind turbine designs include vertical-axis technological problem and providing efficient transmis-turbines and small turbines designed for urban use. sion of electric power from off-grid hydropower plants is a major opportunity for investment and leadership inGeothermal many countries around the world.Geothermal power is generated using thermal energy Hydropower plants are a clean, emission-free sourcefrom underground sources. Different technologies are of electricity. The natural hydrological cycle replenishesused to generate electricity using geothermal resources, the resource, but also making it vulnerable to droughts.which include steam, hot water, and heat stored in rock Competition for scarce water resources for agriculture,formations. Dry steam power plants use geothermal steam recreation, and fishing can affect the availability ofdirectly to drive a turbine and electric generator. Water water for power production. However, the potential forcondensed from the process is pumped underground small hydro project development for rural electrificationand turned back into steam. Flash steam plants generate remains high in countries with concentrations of ruralpower by releasing hot water from underground pressur- populations living near rivers and streams.ized reservoirs to drive turbines in an electric power plant. Large hydropower plants with capacities in the tensBoth types of steam power plants release small amounts of of megawatts are typically impoundment systems and re-gases and steam into the atmosphere. quire a dam that stops or reduces a river’s flow to store wa- Binary-cycle plants have no gas emissions and operate ter in a reservoir. Penstocks carry water from the reservoirby passing hot water from a geothermal source through a to water turbines, which in turn drive electric generators.heat exchanger, where heat from the water is transferred Impoundment systems offer the advantage of controlledinto a fluid that drives a turbine for electricity generation. power output and other benefits such as water recreationBinary-cycle plants are more efficient than dry steam or associated with reservoirs, irrigation, and flood control.flash steam systems and are the preferred technology for However, dams negatively impact fish populations byprojects currently in the planning phase. interfering with migration patterns. Water quality both in Geothermal energy was first used for electric power the reservoir and downstream of the dam can be affectedin Italy in the early 18th century. Geothermal resources by changes in water flow and dissolved oxygen levels.are found worldwide in areas where geothermal energy is Large new hydropower projects often require planning toClean Energy: An Exporter’s Guide to China 67
  • remove communities from areas that will be flooded after because of their potential proximity to large load cen-a dam is built and other measures to manage environmen- ters. Oscillating water column systems use rising andtal impact. Recent research has also raised concern about falling water caused by waves to compress and expandthe possible effect of large reservoirs on atmospheric an air column in a vertical steel or concrete structure.concentrations of greenhouse. The oscillating air pressure levels cause a turbine to Small hydropower plants, such as the one shown at spin, which drives an electric generator. Tapered chan-right,82 with capacities ranging from a few kilowatts to nel systems use wave power to fill a raised reservoirseveral megawatts, are typically diversion systems, which with water, which is then allowed to flow through tur-divert some water from a river through a canal or pen- bines. Pendulor wave systems consist of a rectangularstock to a turbine. Small hydropower plants can provide structure with a hinged door that swings with the mo-electricity for isolated rural populations. These systems tion of waves. The swinging door operates a hydraulicrange in size from household-sized systems to ones that pump that drives a turbine.can supply power to entire villages and commercial or in- Ocean thermal energy conversion systems use tem-dustrial loads. Diversion systems, also called run-of-river perature differences between warm surface water andsystems, do not require dams or reservoirs, are suitable for cool deep water to convert a liquid into gas. The expand-small hydropower projects, and have less impact on the ing gas drives a steam turbine and electric power genera-environment. Small hydropower projects are being aggres- tor. Closed-cycle systems circulate warm surface watersively developed as part of rural electrification programs; through a heat exchanger where a fluid with a low boilingin some cases innovative financing approaches are used in point is vaporized. A second heat exchanger condensescountries such as India, Sri Lanka, and Nepal. the vapor using cool deep water. Open-cycle systems use Pumped storage systems require two reservoirs ocean water itself as the heat transfer fluid, boiling warmat different heights. They pump water during periods surface water in a low-pressure chamber. Water vaporof low electric demand between the two heights and drives a turbine and is condensed back into liquid usingrelease water from the upper reservoir during periods cool deep water. Hybrid systems use a combination ofof high demand. open- and closed-cycle arrangements. A by-product of ocean thermal energy systems is cold water, which can beOcean Power Technology used in building cooling systems, agriculture, and fisheriesOcean power technology makes use of energy embodied applications. Open- and hybrid-cycle systems desalinatein the ocean by converting it into electricity. Some systems ocean water in the vaporization process and could also beconvert the energy in moving ocean water into electricity, a source of fresh water. Ocean thermal energy conversionusing either the vertical motion of waves or the horizontal systems work in areas where the difference between themotion of ocean currents. Other systems use temperature surface of the ocean and deeper water is about 20 degreesdifferences at different levels of the ocean to generate Celsius, which is often the case in tropical coastal areas.electricity. Ocean power technology is in the research and As with other renewable energy technologies, oceandevelopment stage, with several commercial prototypes power technology projects are capital intensive, butbeing tested. typically have lower operating costs than fuel-based Tidal power technology converts the energy in tidal power technologies.motion caused by the gravitational forces of the sun It should be noted that ocean power systems canand moon on ocean water into electricity. Tidal stream impact migration patterns in ocean species and causesystems operate similarly to wind turbines, using tidal tur- other environmentally troubling consequences. Sys-bines to convert energy in ocean currents into a rotational tems employing barrages can cause silt buildup thatmotion to drive turbines and power generators. Like wind affects tidewater and coastal ecosystems. These conse-turbines, tidal turbines can use horizontal-axis or vertical- quences can however be mitigated by careful selectionaxis machines. These systems rely on currents caused by of project sites.ocean tides moving through and around obstructionssuch as entrances to bays and other geographical features. n Energy Efficiency Tidal barrage systems are similar to hydropower dams,using differences in height of water on either side of a dam The efficiency of an energy conversion process is theto generate electricity. Barrage systems use a dam-like ratio of the useful energy produced by the process tostructure and gates to store and release water as tides the amount of energy that goes into it. Primary energy iscause water levels to rise and fall. fossil fuel, nuclear, hydroelectric, or renewable energy Wave power technology extracts energy from the extracted for use in an energy conversion process.vertical motion of ocean water caused by waves. Wave Secondary energy is a high-quality form of energy suchpower systems can be built offshore, in deep water typi- as electricity or refined fuel that can be used to pro-cally far from coastlines or onshore in shallower water vide energy services. An energy service is an end usealong the coast. Onshore systems show more promise provided by a process or device that requires secondary68 U.S. Department of Commerce | International Trade Administration
  • energy. Useful energy is the energy that goes toward Energy savings provide several benefits. For energyproviding an intended energy service. For example, consumers, benefits include reduced costs and reducedthe light produced by a lighting application is useful emissions; for energy service providers, efficiencyenergy, whereas the heat produced by the application reduces the need for (and cost of ) fuel; and for govern-is not. Energy efficiency can be measured at different ments and communities alike, efficiency reduces CO2points in the process of converting a fuel or other en- emissions and can help meet targets for global warm-ergy resource into an end-use energy service. Efficiency ing pollutants. Energy efficiency programs can reducepoints include the following: future investment requirements, enhance competitive- ness by lowering input and operating costs, free up Extraction efficiency is a measure of the amount of4  capital for other social and economic development primary energy delivered to a power plant or refinery priorities, and contribute to environmental steward- per unit of energy contained by the energy resource ship objectives. It can also contribute to long-term in the ground or atmosphere and required by the resource planning and management, hedge fuel risks, extraction process. and reduce operation and maintenance (O&M) costs. Power plant or refinery conversion efficiency is the ratio4  Energy efficiency programs promote improvement and of the quantity of secondary energy produced by a investment in energy generation, delivery, end-use power plant, refinery, or other conversion facility to the equipment, facilities, buildings, and infrastructure that quantity of primary energy required by the process. increase useful energy output or services. Transmission and distribution efficiency is the ratio of4  Combining energy efficiency and renewable energy secondary energy delivered to an end-use facility to the policies maximizes the impact of energy policy on emis- quantity of that energy produced by the power plant or sion reductions. Reducing growth of energy demand refinery. allows low- or no-emission renewables to keep up with End-use efficiency is a measure of the quantity of use-4  electric demand. Without coordination, new renewable ful energy provided by a device or process per unit of capacity would be outstripped by increased demand, energy delivered to the device or process. requiring increased fossil fuel capacity to meet the growth. A combined policy also takes advantage of the temporal Some analyses of energy efficiency also include a mea- synergy of the two approaches: Energy efficiency pro-sure of the actual need for the energy service. For example, grams can meet shorter-term goals because efficiencyan office building that provides lighting for an unoccupied measures can be implemented quickly and at relativelyroom or a factory that runs electric machines after the low cost. Renewable energy programs can meet longer-needed process is complete would be less efficient than a term goals, with new capacity coming on line as the ef-building equipped with motion sensors that provide lights ficiency programs achieve their goals.only when people are in a room or a factory that shuts Demand Side Management (DSM) is the practice ofdown equipment not being used. changing energy consumption patterns to reduce the need Energy efficiency measures involve replacing existing for new energy generation capacity. DSM can include en-technologies and processes with new ones that provide ergy efficiency programs, peak load reduction programs,equivalent or better energy service using less energy. real-time and time-of-use energy pricing, interruptibleThe value of the saved energy typically covers the cost of load tariffs, direct load control, and shifting demand fromdeploying the new technologies and processes, espe- peak to off-peak periods.cially when the increase efficiency occurs downstream Building codes provide guidelines for the constructionin the conversion process. For example, improving the industry to achieve energy-saving goals through improve-efficiency of a pumping system in an industrial facility by ments in lighting, heating, and cooling. Special programsredesigning the circulation system to minimize friction promote the development of zero-energy buildings, whichin pipes will result in the need for a smaller motor to combine energy efficiency with energy production tech-drive pumps, which in turn consumes less energy. The nologies to maximize the amount of a building’s energyreduced electricity demand will result in reduced losses that it generates on the entire chain, from the generation plant through In the transportation sector, vehicle efficiency stan-the distribution system. dards, public transportation programs, and urban planning Energy efficiency results in savings at the time the en- minimize the consumption of transportation fuels whileergy service is provided. Energy service providers can also maintaining adequate levels of transportation services.use load management to change the time that an energy Industrial efficiency measures the decrease in energyservice is delivered in order to reduce peak loads on an use and pollution in the industrial sector. Investment inenergy distribution system. Demand-side management efficient motor and pumping systems, combined heat and(DSM) uses both load management and energy efficiency power, and distributed on-site energy generation results into save the amount of primary energy required to deliver long-term energy savings and can help industries competethe energy service. while meeting environmental regulations.Clean Energy: An Exporter’s Guide to China 69
  • Energy efficiency measures require capacity-building in a hybrid power system that includes fossil-fuel-basedefforts to empower institutions and individuals to implement generation. The simplest and therefore lowest-cost designsenergy-saving programs and make energy-saving decisions. are low-penetration systems in which the renewableExamples of capacity building include establishing energy power components produce sufficient power to save upaudit procedures and auditor training programs, developing to 20 percent on fossil fuel consumption. Medium- andsystems to track energy consumption patterns and establish high-penetration systems can save up to 40 and 70 percentbenchmarks, establishing energy management systems, cre- on fuel consumption, respectively, but are more costly toating certification systems for energy practitioners, develop- design and complex to operate because they require ad-ing energy management guidelines, and facilitating technol- ditional control equipment to ensure the system’s stability.ogy transfer. Advanced hybrid power systems use new technologies for power generation, storage, and system control. New technologies for research and experimental hybrid powern Hybrids and Co-generation systems include natural gas turbines, fuel cells, advancedHybrid and co-generation power systems take advan- batteries, flywheels, and other technologies.tage of the benefits of multiple technologies in a single,integrated system. Hybrid power systems use combina- Examples of Hybrid Power Systemstions of power generating technologies to generate elec- Over 400 simple wind–solar–battery hybrid systemstricity. Co-generation systems, also called combined provide between 500 and 600 W of electric genera-heat and power (CHP) systems, generate both electric- tion capacity for rural households in Innerity and useful heat. Mongolia, China. Each system consists of a 300-W wind turbineHybrid Power System Technology and 100- to 200-W photovoltaicRenewable-based hybrid power systems use combina- array that charges deep-cycle leadtions of wind turbines, photovoltaic panels, and small acid batteries.hydropower generators to generate electricity. Hybrid Packaged hybrid power systems, power systems typically such as the one shown at left,83 pro- include a diesel or other duce power for communications appli- fuel-based generator and cations, disaster relief, and emergency may include batteries or power and can also provide power for other storage technology. rural electrification and agricultural appli- A completely renewable cations. The SunWize product shown here, can hybrid power system meet continuous loads of 100 to 350 W, equivalent might use a biofuel-based to 2.4 to 8.4 kWh/day.generator in place of a diesel or other fossil fuel generator. A final example is a wind–hydro–diesel hybrid systemHybrid power system applications are typically small to in Coyhaique, Chile, which was designed to provide overmedium in scale (producing between 100 watt-hours and 15 percent of the regional capital’s electricity needs andtens of megawatt-hours per day) and generate electricity to displace about 600,000 liters of diesel fuel annually.for distributed power generation applications, in remoteareas for village power, and for communications and mili- Co-generation System Technologytary installations around the world. Conventional fossil-fuel-based electric power plants Hybrid power system designers select technologies on generate heat as a by-product that is emitted into thethe basis of the renewable resource available at a particu- environment through gas flues, cooling towers, and bylar location to take advantage of resource complementar- other methods. Co-generation power plants collect thisity. For example, a wind–solar hybrid system can make heat for use in thermal applications, thereby converting ause of both solar and wind power in areas that experience higher percentage of the energy in the fuel into useful en-windy periods at night after the sun has set. A solar–hydro- ergy. The most efficient conventional power plants havepower hybrid system would be appropriate at a location a typical fuel-to-electricity conversion factor of about 50that is near a stream or river and has sunny weather percent, while co-generation plants can achieve efficien-during dry periods of the year when stream flow is low. cies of over 75 percent. Co-generation plants generateIn some cases, the renewable resource may complement more useful power than conventional plants using thevarying availability of fossil fuel resources, such as in areas same amount of fuel and also produce less pollution perin the Arctic that experience high winds, when transporta- unit of useful energy.tion of fuels to remote locations is difficult or impossible Co-generation plants are most effective when locateddue to winter conditions. near a thermal load center. Examples of thermal loads that Renewable penetration is a measure of the relative can be served by a co-generation plant are district heatingcontribution of renewable and non-renewable resources systems that provide heat for towns and neighborhoods,70 U.S. Department of Commerce | International Trade Administration
  • industrial processes that require heat such as paper mills, and in forklifts and mowers. Propane costs vary from 5 toinstitutions such as prisons and hospitals, and wastewater 40 percent less than gasoline and can result in reductionstreatment plants. in air pollutants. Co-generation plants either primarily produce electric- Electric vehicles are appropriate for neighborhoodity and collect exhaust heat from the electricity generation use. Using electricity in electric vehicles represents aboutprocess (topping cycle plant) or primarily generate heat and a 30 percent reduction in fuel costs over conventional fu-use excess thermal energy to drive an electricity generating els. Using electricity from the conventional grid results inprocess (bottoming cycle plant). Co-generation plants can be a 50 percent reduction in emissions compared to conven-large (greater than about 25 MW) and based on conventional tional fossil fuel vehicles.natural gas turbines, combined-cycle natural gas turbines, Hybrid electric vehicle technology can be used inor steam turbines. Smaller co-generation plants (25 kW to 25 passenger and light-duty vehicles and in buses andMW) use reciprocating or Stirling engines to run an electric trucks. Hybrid electric vehicles are more efficient thangenerator and collect the waste heat from the engine’s ex- fossil-fuel-only vehicles and offer slight air pollutionhaust system for thermal applications. These smaller plants improvements over average fossil fuel vehicles. Plug-can be fired by biomass or industrial and municipal waste. in hybrids offer an improvement over hybrid electricVery small co-generation plants (1–25 kW) for distributed vehicles by allowing for some of the vehicle’s energy toenergy applications use some of the heat from water or space be supplied by the electric power grid and potentiallyheating systems to generate electricity for a single household by renewable energy sources. Because electric poweror small business. tends to be cleaner than power from internal combustion engines, this approach can result in overall reductions in transportation-related pollution.n Clean Transportation Technologies Fuel efficiency and air emissions for heavy-duty diesel vehicles can be improved with new technologies.Alternative fuels for transportation include biodiesel, Mobile idle reduction systems provide alternative powerethanol, natural gas, and propane. Biofuels produced sources for use when trucks are idle but still requirefrom agricultural products are considered renewable fuels power for heating and cooling. Diesel engine retrofits in-because they can be grown annually. Biofuels also pro- cluding exhaust catalysts and filters reduce the emissionduce fewer air pollutants when burned in vehicle engines. of air pollutants.Advanced transportation technologies include electricvehicles, hybrid electric vehicles, mobile idle reduction n Summarysystems, and diesel retrofits. Biodiesel is a fuel derived from biomass that can be This section has presented only a brief summary of theburned in diesel engines, including those in light- and clean energy technologies included in this assessmentheavy-duty diesel vehicles. Biodiesel can be used in all report. There is a considerable wealth of information ondiesel vehicles and produces fewer emissions than fossil these technologies and on the ongoing research and de-fuel diesel. Because biodiesel is produced from biomass, velopment of other alternative energy technologies fromit can be considered a carbon-neutral fuel from a global national laboratories such as the National Renewable En-warming perspective, although carbon emissions from the ergy Laboratory (NREL) of the U.S. Department of Energy,production and transportation of biodiesel contribute to as well as various renewable energy industry associations.its carbon footprint. Biodiesel fuel can easily be distrib- Other resources for U.S. firms are included in Appendix Auted through the existing fueling infrastructure. of this document. Ethanol can be mixed with gasoline and used in ve-hicle engines designed to burn gasoline–ethanol mixtures.E85 fuel consisting of 85 percent ethanol and 15 percentgasoline can reduce air pollutant emissions and be used invehicles with modified engines or with engines designedfor use with ethanol fuel mixtures. Existing fueling stationscan be modified to distribute ethanol-based fuels. Compressed and liquefied natural gas (CNG and LNG)can be used in engines designed or modified for use withthe fuels. Natural gas engines produce lower emissionsthan gasoline engines. Wide-scale use of natural gas as atransportation fuel requires adoption of the specializedvehicles by consumers and transportation companies anddevelopment of new fueling infrastructure. Propane (LPG)can be used in passenger and light-duty delivery vehiclesClean Energy: An Exporter’s Guide to China 71
  • Appendix A. Resources for U.S. FirmsThe following table provides a compendium of trade and investment resources for U.S. clean technology firms, with abrief description of each resource. Contact information for individual organizations can be found by at each listed Website. The provision of this list of resources does not constitute endorsement of any organization. Organization Web Site Description A. U.S. Government DOC/ITA participates in the development of U.S. trade policy, identi- fies and resolves market access and compliance issues, administers U.S. trade laws, and undertakes a range of trade promotion and trade advocacy efforts. ITA has more than 2,000 dedicated individu- als posted at U.S. embassies and commercial offices around the world, including in China and India. ITA’s lead business unit for trade promotion is the U.S. Commercial Service, which supports U.S. businesses through its global network of offices. The Commercial Service promotes the export of Ameri- can goods and services worldwide and includes special programs for India and China. A resource guide for U.S. exporters to China, including a listing of legal services for China, is available at www. The India site is available at The U.S. Commercial Service offers four ways to grow international sales: world-class market research, trade events that promote products and services to qualified buyers, introductions to qualified buyers and distributors, and counseling through every step of the export process. For more information about how our worldwide network can help your company, call 1-800-USA-TRADE or contact our Export Assistance Centers. ITA’s other business units include: Market Access and Compliance, which resolves market access is- sues, identifies and reduces trade barriers, and ensures that foreign U.S. Department of Com- countries are in compliance with trade agreements; Manufacturing merce (DOC), International and Services, which advocates policies to help U.S. companies be Trade Administration (ITA) competitive at home and around the world and ensures industry’s voice is reflected in policy development; and Import Administra- tion, which administers various trade laws and monitors subsidies. ITA also has various resources to help in this fight including: one-on-one consultations with IPR trade specialists; IP attaches in China, Brazil, India, Russia, Thailand and Egypt to as- sist American businesses and actively engage with local IP agencies; the China IPR Advisory Program that provides U.S. companies a one-hour free legal consultation with a volunteer attorney experi- enced in IPR matters; IPR toolkits available online at containing de- tailed information on local IP laws and resources, as well as helpful local contact information in key foreign markets; free monthly China IPR Webinar series for U.S. industry; a hotline (1-866-999-HALT) answered by IPR experts to help busi- nesses secure and enforce their IP rights; a Trade Fair IPR Initiative to promote protection of IP at domestic and international trade fairs; domestic outreach programs including a U.S. PTO China Roadshow; as well as a free, web-based IPR Module available at to help SMEs evaluate, protect, and enforce their IP both in the United States and overseas.Clean Energy: An Exporter’s Guide to China 73
  • Ex-Im Bank is the official export credit agency of the United States. Ex-Im Bank’s mission is to assist in financing the export of U.S. goods and services to international markets. Ex-Im Bank enables U.S. companies—large and small—to turn export opportunities into real sales helping to maintain and create U.S. jobs and contrib- ute to a stronger national economy. Ex-Im Bank does not compete Export–Import Bank of the with private-sector lenders but provides export financing products United States (Ex-Im Bank) that fill gaps in trade financing. Ex-Im Bank assumes credit and country risks that the private sector is unable or unwilling to accept and helps to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters. Clean energy is a priority for Ex-Im Bank, and the agency offers its most favorable terms for these technologies. OPIC helps U.S. businesses invest overseas, fosters economic devel- opment in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, Overseas Private Investment and supports U.S. foreign policy. Because OPIC charges market- Corporation (OPIC) based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. OPIC has made clean energy investment a priority and offers favorable terms for these technologies. USAID is an independent agency that provides economic, development, and humanitarian assistance around the world in support of the foreign policy goals of the United States. Currently, USAID is operational in India (but not China). In India, USAID U.S. Agency for International works with local partners to increase viability in the power sector, Development (USAID) conserve resources, and promote clean technologies and renew- able energy. USAID facilitates sharing of energy and environment best practices between the United States and India and among South Asian countries. The Foreign Agricultural Service (FAS) of USDA works to improve foreign market access for U.S. products, build new markets, improve the competitive position of U.S. agriculture in the global marketplace, and provide food aid and technical assistance to foreign countries. FAS has the primary responsibility for USDA’s US Department of Agriculture international activities—market development, trade agreements (USDA) and negotiations, and the collection and analysis of statistics and market information. It also administers USDA’s export credit guar- antee programs. USDA helps increase income and food availability in developing nations by mobilizing expertise for agriculturally led economic growth. USDA is also active in bioenergy development, domestically and overseas.74 U.S. Department of Commerce | International Trade Administration
  • USDOE is committed to reducing America’s dependence on foreign oil and developing energy efficient technologies for buildings, homes, transportation, power systems, and industry. The Office of Energy Efficiency and Renewable Energy (EERE) seeks to strengthen America’s energy security, environmental quality, and economic vitality in public–private partnerships that enhance energy effi- ciency and productivity; bring clean, reliable, and affordable energy technologies to the marketplace; and make a difference in the everyday lives of Americans by enhancing their energy choices and their quality of life. EERE leads the federal government’s research, development, and U.S. Department of Energy deployment efforts in energy efficiency. EERE’s role is to invest in (USDOE) high-risk, high-value research and development (R&D) that is criti- cal to the nation’s energy future and would not be sufficiently con- ducted by the private sector acting on its own. Program activities are conducted in partnership with the private sector, state and local governments, USDOE national laboratories, and universities. EERE offers financial assistance for renewable energy and energy effi- ciency R&D. EERE also works with stakeholders to develop programs and policies to facilitate the deployment of advanced clean energy technologies and practices. EERE has bilateral agreements in clean energy with India and China and participates in the Asia–Pacific Partnership on Clean Development and Climate (APP) (see below). State is the lead U.S. foreign affairs agency, and the Secretary of State is the president’s principal foreign policy adviser. The depart- ment advances U.S. objectives and interests in shaping a freer, more secure, and more prosperous world through its primary role in developing and implementing the president’s foreign policy. The Bureau of Economic, Energy and Business Affairs (EEB) formu- U.S. Department of State lates and carries out U.S. foreign economic policy, integrating U.S. (State) economic interests with our foreign policy goals so that U.S. firms and investors can compete on an equal basis with their counter- parts overseas. It implements U.S. economic policy in coopera- tion with U.S. companies, U.S. Government agencies, and other organizations. State also manages U.S. embassies overseas and coordinates U.S. activities under the APP (see below). The embassy provides information on travel, doing business in http://beijing.usembassy-china. China, an IPR toolkit (, U.S. Embassy in China and other useful information for U.S. visitors to China. The U.S. Com- mercial Service has offices throughout China as well. The Office of Foreign Assets Control (OFAC) of Treasury admin- isters and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those en- U.S. Department of Treasury gaged in activities related to the proliferation of weapons of mass (Treasury) destruction. OFAC acts under presidential wartime and national emergency powers, as well as authority granted by specific legisla- tion, to impose controls on transactions and freeze foreign assets under U.S. jurisdiction. SBA’s mission is to aid, counsel, assist, and protect the interests of U.S. Small Business Adminis- small-business concerns; to preserve free competitive enterprise; and tration (SBA) to maintain and strengthen the overall economy of our nation. SBA also helps small businesses to compete in the global marketplace.Clean Energy: An Exporter’s Guide to China 75
  • USTDA’s mission is to advance economic development and U.S. commercial interests in developing and middle-income countries. To this end, the agency funds various forms of technical assistance, U.S. Trade and Development investment analysis, training, orientation visits, and business work- Agency (USTDA) shops that support the development of a modern infrastructure and a fair and open trading environment. In carrying out its mis- sion, USTDA gives emphasis to economic sectors that may benefit from U.S. exports of goods and services. USTR is an agency of over 200 people with specialized experience in trade issues and regions of the world. They negotiate directly with foreign governments to create trade agreements, resolve disputes, U.S. Trade Representative and participate in global trade policy organizations. They also meet (USTR) with governments, business groups, legislators, and public interest groups to gather input on trade issues and explain the president’s trade policy positions. International Trade Administration of the Department of Commerce manages StopFakes, which provides access to information on pro- StopFakes moting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements. B. Non–U.S. Government Organizations Programs in the United States and abroad (including China and In- dia) conduct research, advise policy-makers, and educate decision- makers on energy efficiency issues. The China program educates Alliance to Save Energy (ASE) manufacturers and government officials on efficient windows and other technologies. In India, ASE is working on municipal water delivery. A division of the GFI Group that operates markets in electrical power, natural gas, emission allowances, and renewable energy Amerex Brokers, LLC credits. Also provides energy procurement services to large com- mercial and industrial customers. Non-profit organization provides technical and policy assessments, American Council for an policy support, business, and public interest collaborations. Orga- Energy-Efficient Economy nizes conferences and provides information dissemination through (ACEEE) publications and education. ACORE establishes collaborative research and communication among leaders of financial institutions, government, professional American Council on Renew- service providers, and others in the wind, solar, geothermal, bio- able Energy (ACORE) mass and biofuels, hydropower tidal and current energy, and waste energy industries. Organizes an annual international ministerial- level workshop on renewable energy in Washington, D.C. The APP is a Presidential initiative to accelerate the development and deployment of clean energy security, reduce harmful air pollu- tion, and greenhouse gas (GHG) emissions intensity in the context of sustained economic growth. The United States, Australia, China, India, Japan, the Republic of Korea, and Canada (accounting for over half of the world’s GHG emissions, energy consumption, GDP, Asia-Pacific Partnership on www.asiapacificpartnership. and population) agreed to work together and the private sector to Clean Development and org expand investment and trade in cleaner energy technologies. Led Climate (APP) by the State Department, the APP is an industry-focused, technol- ogy-driven, results-oriented partnership. Through Activities like the Clean Energy Technologies Trade Mission to China and India, the Department of Commerce seeks to position U.S. companies to make commercial sales while removing obstacles that restrict the ability of U.S. companies to do business in partner countries.76 U.S. Department of Commerce | International Trade Administration
  • Non-profit society of energy professionals in 77 countries promotes Association of Energy Engi- interest in sustainable development. Publishes industry newsletters neers (AEE) for facility managers, renewable energy developers, environmental managers, and energy service providers. China Embassy in United Provides information on China and its economy and trade, ministry States information, and some policy documents. Provides training and consulting services for international business Cultural Savvy travelers. Includes some on-line information. For-profit company originally operated as a Rocky Mountain Institute project. E Source provides analysis of retail energy markets, services, and technologies to its members, which include electric E Source and gas utilities, large corporate and institutional energy users, government agencies, energy service companies, manufacturers, consultants, and others in over 20 countries. Provides financial and brokerage services for the global green Evolution Markets market and clean energy sector. This site provides an overview of methodological and technological Intergovernmental Panel on issues in technology transfer, including financing and partnerships, Climate Change tectran/index.htm and sectoral analyses. Publishes best-practice reports, audio guides, and Web-based International Cultural Enter- reports on country-specific business practices, customs, negotiat- prises, Inc. ing tactics, communication, and other issues. Also provides cross- cultural training and consulting services. National Association of The energy service industry trade organization advocates for the Energy Service Companies delivery of cost-effective energy services, provides industry infor- (NAESCO) mation and data, and helps establish industry standards. Organization for Economic The OECD Investment Committee provides guidelines for mul- Co-operation and Develop- tinational enterprises covering business ethics and sustainable ment (OECD) Directorate development. Also provides investment statistics and analysis and for Financial and Enterprise investment codes. Affairs Represents interests of U.S. subsidiaries of companies headquar- tered abroad. Educates public and policy-makers about positive Organization for International role U.S. subsidiaries play in U.S. economy and ensures that U.S. Investment subsidiaries are not discriminated against in state or federal law. Provides peer-to-peer forums for U.S. subsidiaries. Company directory is a searchable list of companies by function. www.renewableenergyaccess. Renewable Energy Access Searching for financial services companies generates a list of clean com energy finance companies worldwide. www.renewablenergystocks. Provides information on renewable energy investing and links to com renewable energy industry information. Membership organization of electric and natural gas utilities, public benefits associations, regulatory and non-profit entities, vendors, The Association of Energy manufacturers, and consulting firms provides professional devel- Services Professionals (AESP) opment programs and networking opportunities and promotes knowledge transfer. Trains executives and professionals in business etiquette, manners, The Lett Group and other skills using international protocol.Clean Energy: An Exporter’s Guide to China 77
  • UNEP Sustainable Energy Provides financiers with tools and access to networks to foster Finance Initiative investment in sustainable energy projects. Assists developing and reindustrializing countries in assessing infor- mation on energy efficiency. Publications include best practices and World Energy Efficiency As- case studies on energy efficiency projects, financing, and ESCOs. sociation (WEEA) Also publishes directories of international energy organizations and companies. The WTO site provides information on trade goods, rules, and regu- lations; intellectual property rights, including trade-related aspects of Intellectual Property Rights (TRIPS); accessions, government pro- World Trade Organization curement, and other commerce and trade topics. Information on China and the WTO is available at countries_e/china_e.html; information on India and the WTO is avail- able at U.S. Department of Commerce | International Trade Administration
  • Appendix B. SustainableEnergy Finance DirectoryThis directory is synthesized from the on-line resourcesavailable at, which is maintainedby the Sustainable Energy Finance Initiative (SEFI), a jointinitiative of the United Nations Environment Programand the Basel Agency for Sustainable Energy. It has beenupdated as of late 2007. Note that financing for clean energy technologies hasincreased significantly in the last few years. This directoryprovides information on a number of these sources basedon information from SEFI but is not exhaustive. Debt Capital Title Finance Type Source of Capital Technology Types Energy efficiency, bioenergy, geother- mal, small hydropower, solar (PV and thermal), wind Other activities: capacity building, institu- tional development, policy and regulatory activities, project development, and CDM Asian Development Debt, equity, fund development, Member countries support. ADB has committed $1 billion Bank (ADB) risk mitigation per year for renewable energy and energy efficiency over the next few years. Of special note are its efforts to catalyze local financing institutions and the private sec- tor to participate in the delivery of clean energy services and to include modern energy access. DEG German Energy efficiency, bioenergy, Small Investment and Debt capital Public hydropower Development Company Energy efficiency, bioenergy, geother- mal, small hydropower, solar (PV and Multilateral, Bi- thermal), wind E+Co Debt capital lateral, foundations, private sector Also provides business planning support and seed capital Energy efficiency, bioenergy, geother- European Investment Debt capital Capital markets mal, small hydropower, solar (PV and Bank (EIB) thermal), wind80 U.S. Department of Commerce | International Trade Administration
  • Geographic Focus Contact 6 ADB Avenue, Mandaluyong City 0401 Metro Manila Philippines West Asia, South Asia, South- Tel: +632 632 4444 east Asia, East Asia Fax: +632 636 2444 CONTACT—China: CONTACT—India: DEG Representative Office Beijing DEG Representative Office New Delhi Beijing Sunflower Tower, Suite 1110 21, Jor Bagh West Asia, East Asia, Southeast No. 37 Maizidian Street New Delhi–110 003 Asia, North Africa, Central and Chaoyang District India Eastern Europe, Central and 100026 Beijing Tel: +91 11 2465 5138, 3012 South America, South Asia, People’s Republic of China Fax: +91 11 2465 3108 Sub-Saharan Africa Tel: +86 10 8527 5168 Fax: +86 10 8527 5170 index.jsp, Hongcheng Plaza Building, Suite 1302 Qingnian Road West Asia, North Africa, Central Kunming 650021 Yunnan, China and South America, South Asia, Tel: +86 871 312 0934 Southeast Asia, East Asia, Sub- Fax: +86 871 310 0897 Saharan Africa Southeast Asia, East Asia, West 100 Boulevard Konrad Adenauer Asia, North Africa, Central and L-2950 LuxembourgLuxembourg Eastern Europe, Central and Tel: +35 2 43791 South America, North America, Fax: +35 2 437704 Oceania, Western Europe, South Asia, Sub-Saharan Africa www.eib.orgClean Energy: An Exporter’s Guide to China 81
  • International Energy efficiency, bioenergy, geothermal, Debt, equity, fund development, Finance IFC funds, GEF, other small hydropower, solar (PV and thermal), risk mitigation Corporation wind, among others Triodos Renewable Bilaterals, multilater- Bioenergy, geothermal, small hydropower, Energy for Debt capital als, foundations, solar (PV and thermal), wind Development Fund private sector82 U.S. Department of Commerce | International Trade Administration
  • CONTACT—China CONTACT—India Michael Ipson, Country Manager New Delhi 15th Floor, China World Tower 2 Paolo Martelli, Director, South Asia or Anil China World Trade Center Sinha, General Manager, SEDF No. 1 Jian Guo Men Wai Avenue 50-M, Shanti Path, Gate No. 3 Beijing, China 100004 Niti Marg, Chanakyapuri Tel: +86 10 5860 3000 New Delhi–110 021 Fax: +86 10 5860 3100 Tel: +91 11 4111 1000 Fax: +91 11 4111 1001/ dia_overview Mario Fischel, General Manager Private Enter- prise Partnership for China Mumbai R. 2716, 27th Floor Sujay Bose, Senior Manager CCB Sichuan Building Godrej Bhavan, 3rd Floor No. 88, Tidu Street Murzban Road, Fort Chengdu, Sichuan Province Mumbai–400 001, Maharashtra P. R. China, 610016 Tel: +(91 22 6665 2000 Southeast Asia, East Asia, West Tel: + 86 28 8676 6622 Fax: +91 22 6665 2001 Asia, North Africa, Central and Fax: N/A Eastern Europe, Central and South America, North America, dia_overview Oceania, Western Europe, South Asia, Sub-Saharan Africa Guwahati–781 005, Assam Chennai Tel: +91 361 2463 133 36 Prasad Gopalan, Principal Investment Officer Fax: +91 361 2463 152 Giriguja Enclave, No. 56 2nd Floor, 1st Avenue Shanti Nagar, Adyar Chennai–600 020, Tamil Nadu Tel: +91 44 2446 2570 Fax: +91 44 2446 2571 Guwahati Sushanta Kumar Pal, Business Development Officer First Floor, Orion Place Next to Mizoram House Christian Basti, G S Road Utrechtseweg 60, P.O. Box 55 Gerrit-Jan Brunink 3700 AB Zeist Tel: +31 30 693 65 78 The Netherlands Tel: +31 30 693 6500 Fax: +31 30 693 6566 South Asia, Southeast Asia, East Helena Korhonen Asia, West Asia, North Africa, Tel: +31 30 693 65 41 Sub-Saharan Africa Team members Martijn Woudstra Bob Assenberg Tel: +31 30 694 26 91 Tel: +31 30 693 65 60 bob.assenberg@triodos.nlClean Energy: An Exporter’s Guide to China 83
  • Verde Ventures, Conservation Debt capital Energy efficiency International Loans, guarantees, analytic, and Energy efficiency, bioenergy, geother- advisory services to developing World Bank Member countries mal, small hydropower, solar (PV and countries thermal), wind Private Equities Title Finance Type Source of Capital Technology Types Energy efficiency, cleaner fuels, bioenergy, Actis Energy Fund Private equities geothermal, small hydropower, solar (PV and thermal), wind, fuel cells Bioenergy, small hydropower, solar (PV Al Tayyar Energy Private equities and thermal), wind Energy efficiency, cleaner fuels, solar (PV Battery Ventures Private equities Limited partners and thermal), wind, fuel cells84 U.S. Department of Commerce | International Trade Administration
  • 2011 Crystal Drive, Suite 500 Arlington, Virginia 22201 USA Southeast Asia, Central and Tel: +1 703 341 2400, South America, Oceania, Sub- +1 800 406 2306 Saharan Africa Fax: +1 703 553 0721 CONTACT—Washington, D.C. CONTACT—India Junhui Wu Hema Balasubramanian 1818 H Street, N.W. West Asia, South Asia, South- Washington, D.C. 20433 east Asia, East Asia USA Sunita Malhotra Tel: +1 202 458 1405 Fax: +1 202 522 1648 Tel: +91 11 24617241 Geographic Focus Contact CONTACT—China Delhi Benjamin Cheng, Investment Principle Steven Enderby, Partner 712 China World Tower 2 NBCC Place, 1st Floor, East Tower No. 1 Jianguomenwai Street Bhisham Pitamah Marg Chaoyang District Pragati Vihar Beijing 100004 New Delhi–110003 People’s Republic of China India Tel: +86 10 6505 6655 Tel: +91 11 4366 7000 Fax: N/A Fax: +91 11 4366 7070 South Asia, Southeast Asia, East Asia, West Asia, North Africa, Central and South America, CONTACT—India Mumbai Sub-Saharan Africa Bangalore JM Trivedi, Partner Subba Rao Telidevara, Partner 704, 7 Floor Dalamal House 15 Rest House Crescent Jamnala Bajaj Road Bangalore–560001 Nariman Point India Mumbai–400021 Tel: +91 80 2555 0651 India Fax: +91 80 2555 0592 Tel: +91 22 2281 6430 Fax: +91 22 2282 0737 Granville (Pete) Smith P.O. Box 757 South Asia, Southeast Asia, East Abu Dhabi Asia, West Asia, North Africa, United Arab Emirates Central and Eastern Europe, Tel: +971-2-681-4004 Sub-Saharan Africa Fax: +971 2 681 4005 Ramneek Gupta South Asia, Southeast Asia, West Asia, North America, Western Europe Mark Sherman mark@battery.comClean Energy: An Exporter’s Guide to China 85
  • Energy efficiency, bioenergy, geother- CDC Group PLC Private equities Private mal, small hydropower, solar (PV and thermal), Wind Multilateral, bi- Energy efficiency, bioenergy, geother- E+Co Debt capital lateral, foundations, mal, small hydropower, solar (PV and private sector thermal), wind Energy efficiency, bioenergy, geothermal, EnviroTech Financial, Inc. Private equities small hydropower, solar (PV and thermal), wind, fuel cells Bioenergy, geothermal, small hydropower, Global Environment Fund Private equities solar (PV and thermal), wind Good Energies Inc. Private equities Private Solar (PV and thermal), wind Energy efficiency, cleaner fuels, bioenergy, Jane Capital Partners LLC Private equities geothermal, small hydropower, solar (PV and thermal), wind, fuel cells Energy efficiency, bioenergy, small New Energies Invest AG Private equities Rights offering hydropower, solar (PV and thermal), wind, (Bank Sarasin + Cie) fuel cells86 U.S. Department of Commerce | International Trade Administration
  • 6 Duke Street, St. James’s 930 Winter Street, Suite 2500 London SW1Y 6BN Waltham, Massachusetts 02541 South Asia, Southeast Asia, East United Kingdom USA Asia, West Asia, North Africa, Tel: +44 0 20 7484 7700 Tel: +1 781 478 6600 Central and South America, Fax: +44 0 20 7484 7750 Fax: +1 781 478 6601 Sub-Saharan Africa CONTACT—China CONTACT—Main Office Wu Jing, Investment Officer Christine Eibs Singer Laura Colbert, Communications Officer 383 Franklin Street Zhu Xiaonan, Office Manager Bloomfield, New Jersey South Asia, Southeast Asia, East USA Asia, West Asia, North Africa, Hongcheng Plaza Building, Suite 1302 Tel: +1 973 680 9100 Central and South America, Qingnian Road Fax: +1 973 680 8066 Sub-Saharan Africa Kunming 650021 Yunnan, China Tel: +86 871 312 0934 Fax: +86 871 310 0897 Gene Beck, President EnviroTech Financial, Inc. South Asia, Southeast Asia, East Asia, West Asia, North Africa, 333 City Boulevard West, 17th Floor Central and Eastern Europe, Orange, California 92868-5905 Central and South America, USA North America, Oceania, West- Tel: +1 714 532 2731 ern Europe, Sub-Saharan Africa Fax: +1 714 459 7492 1225 Eye Street N.W., Suite 900 South Asia, Southeast Asia, East Washington, D.C. 20005 Asia, West Asia, North Africa, USA Central and Eastern Europe, Cen- Tel: +1 (02 789 4500 tral and South America, North Fax: +1 202 789 4508 America, Sub-Saharan Africa South Asia, Southeast Asia, East Michael Ware Asia, West Asia, North Africa, 1250 24th Street, N.W., Suite 300 Central and Eastern Europe, Washington, D.C. 20037, USA Central and South America, Tel: +1 202 466 0582 North America, Oceania, West- Fax: +1 202 466 0564 ern Europe, Sub-Saharan Africa Neal Dikeman 505 Montgomery, 2nd Floor San Francisco, California 94111 South Asia, Southeast Asia, East USA Asia, North America, Oceania Tel: +1 415 277 0180 Fax: +1 415 277 0173 Andreas Knörzer South Asia, Southeast Asia, East Elisabethenstrasse 62 Asia, West Asia, North Africa, CH-4002 Basel Central and Eastern Europe, Switzerland Central and South America, Tel: +41 0 61 277 7477 North America, Oceania, West- ern Europe, Sub-Saharan Africa Energy: An Exporter’s Guide to China 87
  • Corporate pension funds, insurance OCM/GFI Power Private equities companies, founda- Energy efficiency Opportunities Fund tion endowments, etc. Private Energy Market Private equities Private Bioenergy, wind Fund LP (PEMF) Energy efficiency, bioenergy, geother- Robeco Milieu Private equities Private mal, small hydropower, solar (PV and Technologies thermal), wind Energy efficiency, bioenergy, small hydro- Sigma Capital Private equities power, solar (PV and thermal), wind Triodos International Institutional and Bioenergy, geothermal, small hydropower, Private equities Fund Management BV private investors solar (PV and thermal), wind, fuel cells88 U.S. Department of Commerce | International Trade Administration
  • 11611 San Vicente Boulevard, Suite 710 South Asia, Southeast Asia, East Los Angeles, California 90049 Asia, West Asia, North Africa, USA Central and Eastern Europe, Tel: +1 310 442 0542 Central and South America, Fax: +1 310 442 0540 North America, Oceania, West- ern Europe, Sub-Saharan Africa Gustaf Godenhielm (Tekniikantie 4 D) P.O. Box 92 South Asia, Southeast Asia, 02151 Espoo East Asia, West Asia, Central Finland and Eastern Europe, Western Tel: +358 9 469 1208 Europe, Fax: +358 9 469 1207 Postbus 973 South Asia, Southeast Asia, East 3000 AZ Rotterdam Asia, West Asia, North Africa, The Netherlands Central and Eastern Europe, Tel: +31 10 224 12 24 Central and South America, Fax: +31 10 411 52 88 North America, Oceania, West- ern Europe, Sub-Saharan Africa Bruce Woodry, Chairman and CEO P.O. Box 1002 Southeast Asia, Central and Harbor Springs, Michigan 49740 Eastern Europe, Central and USA South America, North America, Tel: +1 231 526 9585 Oceania, Western Europe Fax: N/A Utrechtseweg 60, P.O. Box 55 Helena Korhonen 3700 AB Zeist Tel: +31 30 693 65 41 The Netherlands Tel: +31 30 693 6500 Fax: +31 30 693 6566 Martijn Woudstra Tel: +31 30 694 26 91 South Asia, Southeast Asia, East Asia, West Asia, North Africa, Cen- tral and South America, Western Team members Europe, Sub-Saharan Africa Bob Assenberg Tel: +31 30 693 65 60 Gerrit-Jan Brunink Tel: +31 30 693 65 78 gerrit-jan.brunink@triodos.nlClean Energy: An Exporter’s Guide to China 89
  • Energy efficiency, bioenergy, geother- UBS (Lux) Equity Fund Private equities mal, small hydropower, solar (PV and Future Energy thermal), wind Warburg Pincus Energy efficiency, bioenergy, geother- Investment Consulting Private equities Private mal, small hydropower, solar (PV and Company Ltd. thermal), wind Public Equities Title Finance Type Source of Capital Technology Types This is an open and Energy efficiency, bioenergy, geother- New Alternatives Fund Public equities mutual fund that mal, small hydropower, solar (PV and seeks shareholders. thermal), wind90 U.S. Department of Commerce | International Trade Administration
  • CONTACT—Beijing CONTACT—India 1609 China World Tower 2/F, Hoechst House 1 Jian Guo Men Wai Avenue Nariman Point Beijing 100004 Mumbai–400 021 People’s Republic of China India Tel: +86 10-6505 22 13,+86 10-6505 22 14, Tel: +91 22 281 4649, +91 22 281 4676 South Asia, Southeast Asia, East +86 10-6505 22 15 Fax: +91 22 230 9000, Asia, West Asia, North Africa, Fax: +86 10-6505 11 79 +91-22-281 4673 Central and Eastern Europe, Central and South America, CONTACT—Shanghai CONTACT—Main Office Gerhard Wagner, So- North America, Oceania, West- Room 3407 Citic Square cially Responsible Investments Analyst ern Europe, Sub-Saharan Africa No. 1168 Nanjing Xi Lu Gessnerallee 3 Shanghai 200041 8098 Zurich People’s Republic of China Switzerland Tel: +86 21 5292 55 55 Tel: +41 1 235 55 52 Fax: +86 21 5292 55 52 Fax: +41 1 235 55 30 CONTACT—Beijing CONTACT—India Beijing Representative Office Mumbai Office 9th Floor, China World Tower 1 7th Floor, Express Towers 1 Jianguomenwai Avenue Nariman Point Beijing 100004 Mumbai–400 021 China India Tel: +86 10 5923 2533 Tel: +91 22 6650 0000 Fax: +86 10 6505 6683 Fax: +91 22 6650 0001 South Asia, Southeast Asia, East Asia, West Asia, North Africa, Central and Eastern Europe, CONTACT—Shanghai CONTACT—Main Office Central and South America, Shanghai Representative Office Almack House North America, Oceania, West- Unit 2201, Bund Center Office Tower 28 King Street, St. James’s ern Europe, Sub-Saharan Africa No. 222 Yanan Road (East) London SW1Y 6QW Shanghai, 200002 United Kingdom China Tel: +44 207 360 0306 Tel: +86 21 6335 0308 Fax: +44 207 321 0881 Fax: +86 21 6335 0802 Geographic Focus Contact South Asia, Southeast Asia, East 150 Broadhollow Road, Suite 360 Asia, West Asia, North Africa, Melville, New York 11747 Central and Eastern Europe, USA Central and South America, Tel: +1 800 423 8383 North America, Oceania, West- Fax: N/A ern Europe, Sub-Saharan Africa www.newalternativesfund.comClean Energy: An Exporter’s Guide to China 91
  • High-net-worth Energy efficiency, cleaner fuels, bioenergy, individuals, family New Energy Fund LP Public equities geothermal, small hydropower, solar (PV offices, foundations, and thermal), wind, fuel cells and institutions Carbon Finance Title Finance Type Source of Capital Technology Types Energy efficiency, cleaner fuels, bioenergy, Carbon finance geothermal, small hydropower, solar (PV and thermal), wind, fuel cells Carbon finance, equity, Climate Change Capital Public, private Energy efficiency, renewable energy venture capital Finance through Energy efficiency, cleaner fuels, bioenergy, CO2e Other sale of emissions geothermal, small hydropower, solar (PV credits and thermal), wind92 U.S. Department of Commerce | International Trade Administration
  • South Asia, Southeast Asia, East 527 Madison Avenue, 6th Floor Asia, West Asia, North Africa, New York, New York 10022 Central and Eastern Europe, USA Central and South America, Tel: +1 212 419 3918 North America, Oceania, West- Fax: +1 212 419 3971 ern Europe, Sub-Saharan Africa (This is a global fund, since it is a global phenomenon.) Geographic Focus Contact South Asia, Southeast Asia, East Juliana van Stolberglaan 3 Asia, West Asia, North Africa, The Hague Central and Eastern Europe, The Netherlands Central and South America, Tel: +31 70 3735 495 Oceania, Western Europe, Sub- Fax: +31 70 3735 000 Saharan Africa CONTACT —London CONTACT—China 3 More London Riverside Climate Change Capital London 9/F China Life Tower Global, active in China and India SE1 2AQ, London 16 Chao Wai Da Jie United Kingdom Beijing 100020 Tel: +44 0 20 7939 5000 Tel: +86 10 85253797 Fax: +44 0 20 7939 5030 Fax:+86 10 85253197 CONTACT—India CantorCO2e India Private Limited CONTACT—International Office 10th Floor, Raheja Chambers West Asia, North Africa, Central 181 University Avenue, Suite 1500 Free Press Journal Marg and Eastern Europe, Central and Toronto, Ontario Nariman Point South America, North America, Canada M5H 3M7 Mumbai–400 021 Oceania, Western Europe, South Tel: +1 416 350 2177 India Asia, Southeast Asia, East Asia, Fax: +1 416 350 2985 Tel: +91 986 753 1203 Sub-Saharan Africa Fax: N/A www.co2e.comClean Energy: An Exporter’s Guide to China 93
  • Renewable energy, waste management, EcoSecurities Carbon finance Public, private industrial efficiency. Energy efficiency, cleaner fuels, geother- European Carbon Fund Carbon finance mal, solar (PV and thermal), wind IFC-Netherlands Carbon Energy efficiency, cleaner fuels, bioenergy, Carbon finance (CDM) Facility (INCaF) geothermal, small hydropower, wind Major Japanese Energy efficiency, cleaner fuels, bioenergy, Japan Carbon Finance, Ltd. private enterprises Carbon finance geothermal, small hydropower, solar (PV (JCF) and policy-lending and thermal), wind, fuel cells institutions Energy efficiency, bioenergy, geothermal, KfW Carbon Fund Carbon finance small hydropower, solar (PV and thermal), wind, fuel cells Natsource Carbon finance Public, private Energy efficiency, renewable energy Trust Fund adminis- Energy efficiency, bioenergy, geothermal, Prototype Carbon Carbon finance tered by the World small hydropower, solar (PV and thermal), Fund (PCF) Bank wind94 U.S. Department of Commerce | International Trade Administration
  • CONTACT—International Office CONTACT—China 181 University Avenue, Suite 1500 Unit 708, China Resources Building Toronto, Ontario 8 Jianguomen Bei Avenue Canada M5H 3M7 Global, including China and India Beijing, 100005 Tel: +1 416 350 2177 Tel:   +86 10 6518 1081 Fax: +1 416 350 2985 Fax:  +86 10 6518 1085 CONTACT—China Li Chao Beijing Tel: +86 106 655 5735 South Asia, Southeast Asia, East Asia, West Asia, North Africa, CONTACT—Asia (w/o China) Central and Eastern Europe, Anne Dargelos Central and South America, Tel: +33 01 58 55 66 28 North America, Oceania, West- ern Europe, Sub-Saharan Africa CONTACT—Main Office Laurent Segalen Tel: +44 0 207 648 0118 Fax: +33 015 855 2965 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 South Asia, Southeast Asia, East USA. Asia, West Asia, North Africa, Tel: +1 202 473 4194 Central and South America, Fax: +1 202 974 4348 Oceania, Sub-Saharan Africa 1-3, Kudankita 4-chome Chiyoda-ku South Asia, Southeast Asia, East Tokyo 102-0073 Asia, West Asia, North Africa, Japan Central and Eastern Europe, Tel: +81 3 5212 8870 Central and South America, Fax: +81 3 5212 8886 Oceania, Western Europe, Sub- Saharan Africa Palmengartenstrasse 5-9 South Asia, Southeast Asia, East 60325 Frankfurt Asia, West Asia, North Africa, Germany Central and Eastern Europe, Tel: +49 69 7431 4218 Central and South America, Fax: +49 69 7431 4775 North America, Oceania, West- ern Europe, Sub-Saharan Africa Natsource LLC 100 William Street, Suite 2005 Global, including China and India New York, New York 10038 Tel: +1 212 232 5305 Fax: +1 212 232 5353 South Asia, Southeast Asia, East 1818 H Street, N.W. Asia, West Asia, North Africa, Washington, D.C. 20433 Central and Eastern Europe, USA Central and South America, Oceania, Western Europe, Sub- Saharan AfricaClean Energy: An Exporter’s Guide to China 95
  • Swedish International Climate Investment Program Carbon finance Energy efficiency, bioenergy, wind (SICLIP) Svensk Exportkredit (SEK)– Bioenergy, geothermal, small hydropower, Export credits Sweden solar (PV and thermal), wind World Bank Carbon Finance Carbon finance Public, private Energy efficiency, renewable energy Insurance Title Finance Type Source of Capital Technology Types Aon Global Risk Bioenergy, geothermal, small hydropower, Insurance Consultants Ltd. solar (PV and thermal), wind Miller Insurance Group Insurance Wind96 U.S. Department of Commerce | International Trade Administration
  • Kungsgatan 43 Box 310, SE-631 04 Eskilstuna South Asia, Southeast Asia, East Sweden Asia, West Asia, Central and East- Tel: +46 16 544 2241, +46 16 544 2043 ern Europe, Central and South Fax: +46 16 544 2099 America, Sub-Saharan Africa, gudrun.knutsson@ P.O. Box 16368, SE-103 27 West Asia, North Africa, Central Västra Trädgårdsgatan 11 B and Eastern Europe, Central and Stockholm South America, North America, Sweden Oceania, Western Europe, South Tel: +46 8 61 38 300 Asia, Southeast Asia, East Asia, Fax: +46 8 20 38 94 Sub-Saharan Africa The World Bank Carbon Finance Unit 1818 H Street, N.W. Global, including China, India Washington, D.C. Tel: +1 202 473 1000 Geographic Focus Contact CONTACT—China CONTACT—India Richard Dong Prabodh Thakker, Chairman Aon Corporation Beijing Representative Office 302 Dalamal House Room 1206 Jamnalal Bajaj Marg Capital Tower Beijing Nariman Point 6 Jia Jian Guo Men Wai Avenue Mumbai–400 021 Chaoyang District India South Asia, Southeast Asia, East Beijing 100022 Tel: +91 22 6656 0505 Asia, West Asia, North Africa, The People’s Republic of China Fax: +91 22 6656 0506 Central and Eastern Europe, Tel: +86 10 6563 0671 Central and South America, Fax: +86 10 6563 0672 North America, Oceania, West- ern Europe, Sub-Saharan Africa CONTACT—Main Office Aon Limited, 8 Devonshire Square London EC2M 4PL United Kingdom Tel: +44 0 20 7623 5500 Fax: +44 0 20 7621 1511 Susanna Lam, Director Miller Insurance Services CONTACT—Main Office (Hong Kong) Ltd. Dawson House Tel: +852 2525 6982 5 Jewry Street South Asia, Southeast Asia, East London EC3N 2PJ Asia, West Asia, North Africa, United Kingdom Central and Eastern Europe, Tel: +44 0 20 7488 2345 Central and South America, David Horne, Director Energy Fax: N/A North America, Oceania, West- Tel: +44 0 20 7031 2582 ern Europe, Sub-Saharan Africa Energy: An Exporter’s Guide to China 97
  • Energy efficiency, bioenergy, geother- Multilateral Investment Insurance mal, small hydropower, solar (PV and Guarantee Agency (MIGA) thermal), wind Energy efficiency, bioenergy, geother- Swiss Re Insurance mal, small hydropower, solar (PV and thermal), wind Other Title Finance Type Source of Capital Technology Types Debt capital, private equities, public equities, funds Energy efficiency, cleaner fuels, bioenergy, Financial engineering and invest- Capital Equity Partners of funds, carbon geothermal, small hydropower, solar (PV ment banking finance, export and thermal), wind, fuel cells credits, insurance, private placements98 U.S. Department of Commerce | International Trade Administration
  • 1818 H Street N.W. South Asia, Southeast Asia, East Washington, D.C. 20433 Asia, West Asia, North Africa, USA Central and Eastern Europe, Tel: +1 202 473 1000 Central and South America, Fax: +1 202 522 0316 North America, Oceania, West- ern Europe, Sub-Saharan Africa CONTACT—China CONTACT—Asia–Pacific Headquarters Eric Gao, Branch Manager Darryl Pidcock Beijing Branch Hong Kong Branch 23rd Floor, East Tower, Twin Towers 61/F Central Plaza No. B12, Jian Guo Men Wai Avenue 18 Harbour Road Chao Yang District G.P.O. Box 2221 Beijing 100022 Wanchai, HK China Hong Kong Tel: +86 10 6563 8888 Tel: +852 2827 4345 South Asia, Southeast Asia, East Fax: +86 10 6563 8800 Fax: +852 2827 6033 Asia, West Asia, North Africa, Central and Eastern Europe, Central and South America, North America, Oceania, West- CONTACT—India ern Europe, Sub-Saharan Africa Dhananjay Date, Managing Director 9th Floor, Essar House 11 K Khadye Marg Mahalaxmi Mumbai–400 034 India Tel: +91 22 6661 2121 Fax: +91 22 6661 2122 Geographic Focus Contact 410 Park Avenue Aiken Capital Partners West Asia, North Africa, Central New York, New York 10022 +1 212 751 5007 and Eastern Europe, Central and USA Same address South America, North America, Tel: +1 928 436 4212 Oceania, Western Europe, South Fax: +1 270 447 3738 Asia, Southeast Asia, East Asia, Sub-Saharan Africa www.capitalequitypartners.comClean Energy: An Exporter’s Guide to China 99
  • Energy efficiency, bioenergy, geother- The Global Environment Member Grants to developing countries mal, small hydropower, solar (PV and Facility (GEF) governments thermal), wind Japan Bank for Japanese International Other government Cooperation (JBIC) Kreditanstalt fur Small and medium enterprise Wiederaufbau German government SMEs, clean energy (SME), project, and export finance (KfW Bankengruppe)100 U.S. Department of Commerce | International Trade Administration
  • CONTACT—China Sudhir Mital, Joint Secretary (Operational Focal Guangyao Zhu, Director General (Political Focal Point) Point) Ministry of Environment and Forests International Department Room 414, Paryavaran Bhawan Ministry of Finance CGO Complex, Lodhi Road Beijing 100820 New Delhi–110 003 People’s Republic of China India Tel: +86 10 6855 3101 Tel: +91 11 243 6 3956 Southeast Asia, East Asia, West Fax: +86 10 6855 1125 Fax: +91 11 24 6 9192 Asia, North Africa, Central and Eastern Europe, Central and South America, North America, Jinkang Wu, Director (Operational Focal Point) Oceania, Western Europe, South Ministry of Finance CONTACT—Main Office Asia, Sub-Saharan Africa International Financial Institution Division IV 1818 H Street, N.W., MSN G6-602 Department of International Affairs Washington, D.C. 20433 Beijing 100820 USA People’s Republic of China Tel: +1 202 473.0508 Tel: +86 10 6855 3101 Fax: +1 202 522.3240, 3245 Fax: +86 10 6855 1125 CONTACT—China CONTACT—India 3131 31st Floor 3rd Floor, DLF Centre China World Trade Center, No. 1 Sansad Marg Jian Guo Men Wai Avenue New Delhi–110001 Beijing 100004 India People’s Republic of China Tel: +91 11 2371 4362, 4363, 7090, 6200 Tel: +86 10 6505 8989, 3825, Fax: +91 11 2371 5066, 3826, 3827, + 91 11 2373 8389 1196, 1197 Fax: +86 10 6505 3829, 1198 CONTACT—Main Office South Asia, Southeast Asia, 4-1, Ohtemachi 1-chome, Chiyoda-ku Tokyo East Asia CONTACT—India 100-8144 Rajeev Singh, Deputy Secretary (Political Focal Japan Point) Tel: +03 5218 3101 Department of Economic Affairs Fax: +03 5218 3955 Ministry of Finance Room N. 66-C, North Block New Delhi–110001 India Tel: +91 11 230 93881 Fax: +91 11 230 92477 South Asia, Southeast Asia, East Charlottenstrasse 33/33a Asia, West Asia, North Africa, 10117 Berlin Central and Eastern Europe, Tel: +49 30 20264 0 Central and South America, Fax: +49 30 20264 5188 North America, Oceania, West- ern Europe, Sub-Saharan AfricaClean Energy: An Exporter’s Guide to China 101
  • Chapter Notes1 Yang Jingyin, Zhen Zexiang, and Guo Yimin, International Status 21 Wind Energy Country Study (GTZ, September 2007). (A portion of theComparative Study on China’s Economy and Social Development in 2006 $600M capital investment was used for the installation of 268 mini-hydro-(International Center of National Bureau of Statistics of China, November power facilities with a total generation capacity around 293 MW.)30, 2006). 22 NDRC, Mid- and Long-term Renewable Energy Development Plan,2 Dai Yande, China Energy Supply and Demand Situation and Energy August 2006.Conservation Policy (ERI of NDRC, March 2007). HYPERLINK “/http:// 23 “Prospect of Roof PV development of China,” International” / Energy Net (April 14, 2006). / ergy-2006200604145255.htmlDai%20Yan%20De.pdf 24 NDRC, Mid- and Long-term Renewable Energy Development Plan,3 Daniel H. Rosen and Trevor Houser, China Energy: A Guide for the August 2006.Perplexed (Peterson Institute for International Economics May 2007). 25 Han Weiping, The Concept of Green Building Integrated with Design, volHYPERLINK “” www.iie. 23, no. 6, p. 117. 26 GTZ, “Wind Energy Country Study,” September 2007.4 Ibid. NDRC, Mid- and Long-term Renewable Energy Development Plan, 27 5 National Bureau of Statistics of China. August 2006.6 China National Development and Reform Commission., “11th Five-Year 28 Gansu Lintao rural energy office.Energy Plan.” 29 Gansu Lintao rural energy office.7 International Energy Agency, World Energy Outlook 2007: China and 30 “Interesting Times—Focus on Clean Energy Investment OpportunitiesIndia Insights (Paris, France: OCED/IEA, 2007) in China” New Energy Finance (September 22, 2006).8 Ibid. 31 Heinz-Peter Mang, Biogas Investments as a Profitable Business in China9 Ibid. (Chinese Academy of Agricultural Engineering, June 14, 2007).10 NDRC, Mid- and Long-term Renewable Energy Development Plan, 32 “Current Status and Prospect of China’s SHP,” presentation of Inter-August 2006. Note: this figure does not include traditional biomass com- national Workshop on China Renewable Energy Strategy Development,bustion for cooking and heating in rural households. According to the IEA’s August 16, 2006. World Energy Outlook estimates, which include traditional biomass htmlconsumption, China’s renewable energy consumption accounted for about15 percent of China’s total primary energy consumption in 2005. 33 Li Qidao, “Situation, Data, Analysis and Suggestions to Small Hydro,” thesis of China Energy Net, September 7, 2007.11 Shi Pengfei, Statistics on Wind Farms in China, 2005 (Chinese Wind 34 NBSC, Statistic Yearbook 2006Energy Association , March 23, 2006). 35 Han Xiaoping, “CIO of China Energy Network,” presentation inplay_info.asp?cid=2&sid=&id=2 Briefing Workshop on Current Situation and Prospects of CHP Industry, September 2005. Shi Pengfei, Statistics on Wind Farms in China, 2006 (Chinese Wind12Energy Association, March 18, 2007). 36 NDRC, List of small thermal power plants that have been closed fromplay_info.asp?cid=2&sid=&id=19 January to September 2007. W020071221580581956235.xls13 Data on installed wind capacity by province compiled by Azure Inter-national Technology Development Ltd. (Beijing) based on proprietary re- 37 Calculated by the Azure International Research Team, as of December Data are not available from the Chinese Government on renewable Wu Guihui, Development of Decentralized Energy in China (July 2007). 38 energy capacities per province Li Junfeng et al., China Solar PV Report 2007 (China Environmental Sci- 39 NDRC, Mid- and Long-term Renewable Energy Development Plan,ence Press). August 2006.15 Chen Yingjie and Fu Zhongwen, “Development Tendency and Outlook 40 Shanghai local government Web site material, August 22, 2006.of Solar PV Industry,” July 18, 2006. ject1ai85052.html16 “2007–2008 China’s Solar PV Industry Development Analysis Report,” 41 Information presented at the United States–China Clean Energy ForumNovember 8, 2007. in January 2008.17 “2007 Chinese Renewable Energy Weekly Monitoring Report (07/10/13 42 Wu Guihui, Development of Decentralized Energy in China (July 2007).– 07/10/19),”October 21, 2007. Liu Yanlong, Analysis of China’s Battery Exports (China Chemical and 43 Ibid.Physical Power Supply Industry Association, June 19, 2007) 44 Data from “BP Statistical Review of World Energy,” June 45 In 2005 there were 113 cities of more than 1 million people, which “2007–2008 China’s Solar PV Industry Development Analysis Report,”19 means a large domestic market for basic materials and intense pressure onNovember 8, 2007. supply—which has grown at breakneck speed since 2001. Data from NBSC, Statistic Yearbook 2006.20 NDRC, Mid- and Long-term Renewable Energy Development Plan,August 2006. 46 “BP Statistical Review of World Energy,” June 2007.Clean Energy: An Exporter’s Guide to China 103
  • 47 Yande Dai, China Energy Supply and Demand Situation and Energy 75 Policy (ERI, NDRC, March 2007). Photo courtesy of U.S. Department of Energy/National Renewable 76 The World Bank and State Environmental Protection Administration of48 Energy Laboratory (USDOE/NREL) (, Cost of Pollution in China (February 2007). 77 Photo courtesy of USDOE/NREL.49 Ibid. 78 Photo courtesy of USDOE/NREL. Yande Dai, China Energy Supply and Demand Situation and Energy50 79 Policy (ERI, NDRC, March 2007). 80 Emerging Energy Research, Asia Pacific Wind Power Markets & Strategies, The World Bank and State Environmental Protection Administration of51 2006–2015 (December 2006). Available from, Cost of Pollution in China (February 2007). 81 Photo courtesy of USDOE/NREL. (USDOE used to denote United States52 NDRC, Notice on Adjusting the Local Grid Feed-in Tariff, June 2006. Department of Energy since DOE has been used already to refer to the Department of Environment) ”21.3 Billion RMB Special Funds on Energy Conservation,” Financial53 Observer of the China Reform Newspaper, July 31, 2007./ 82 Photo courtesy of USDOE/NREL.ShowNews.asp?NewsID=7906 83 See Special Funds Application Guidebook for RE in Building Integration.54 2007 SME Technology Innovation Fund Guidelines for a Number of KeyProjects (Chinese version). “Support Notice for 2007 SME Technology Innovation Fund guidelinesfor a Number of Key Projects” (Chinese version). Energy Conservation Law, 2007 version.58 “Anti-corruption Policies in Asia and the Pacific: Thematic review ofprovisions and practices to curb corruption in public procurement.” “China Focus: China Begins Compulsory Procurement of Energy-savingItems,” December 2007. The Office of the National Energy Leading Group is a department of theNDRC. Bai Quan, Energy Efficiency in China: Strategies and Financing Options(ERI of NDRC).63 Second China New Energy International Forum. Sina Finance News; Haitong Stock Company. VER and Carbon Neutral in Volunteer Emission Reduction Market (Azure66 CDM team material, May 16, 2007).67 Thomson Financial/NVCA. Cleantech Network™ LLC. www.cleantechventure.com69 Thom-son Financial/NVCA. New Energy Finance. The full catalogue is available in English at EN/Laws/law_en_infor.jsp?docid=87372.71 China Investment Consulting Web, 2007–2008 Market Analysis andInvestment Consulting Report on China SWH, November 2007. Source: United States–China Business Council.; PRC GovernmentWeb sites.73 Source: NDRC, “Guidance Catalogue of Renewable Energy Industry,” November29, 2005.104 U.S. Department of Commerce | International Trade Administration