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Frauke Urban: Low carbon innovation in China – Prospects, Politics and Practice


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Presentation given by Frauke Urban (SOAS) at the University of Münster, January 2015

Part of the STEPS affiliate project on Low Carbon Innovation in China. Website:

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Frauke Urban: Low carbon innovation in China – Prospects, Politics and Practice

  1. 1. Low carbon innovation in China – Prospects, Politics and Practice Dr Frauke Urban SOAS, University of London Münster, 9th January 2015
  2. 2. Content 1. Background: China’s energy and climate setting 2. Project overview: Low carbon innovation in China 3. Case study: Solar energy 4. Conclusion Project team at solar PV plant in Shandong province, China: Wang Yu, Sam Geall, Frauke Urban
  3. 3. 1. China’s energy & climate setting • World’s most populous country, rapidly growing economy • World’s largest emitter of greenhouse gas emissions • World’s largest energy consumer, mainly coal-dependent • But also world’s largest investor in renewable energy, including in hydropower, wind energy and solar energy • Increasing innovative capabilities for low carbon energy & green economy in China
  4. 4. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Japan Russia India Euro zone countries USA China Total CO2 emissions in Mt, data from World Bank 2013
  5. 5. Per capita CO2 emissions in t, data from World Bank 2013
  6. 6. Total energy use in Mt coal equivalents, data from World Bank 2013 0.00 1,000.00 2,000.00 3,000.00 Japan Russia India Euro zone countries USA China
  7. 7. 0 1000 2000 3000 4000 5000 6000 7000 8000 India China Euro zone countries Japan Russia USA Per capita energy use in kg, data from World Bank, 2013
  8. 8. 2. Project overview • ESRC-funded project, 2013-2016, UK-China collaboration • Main research question: Can Chinese low carbon innovation help address the climate crisis? • Project aims to investigate the social and political aspects of low carbon innovation in China, rather than focusing on technical change alone. • Large literature on low carbon innovation in China, but much of it downplays the social nature of technical change, and questions of political change and power. • Methods: interviews, focus group discussions, back-casting • Theory: socio-technical transitions (Geels, 2002), innovation systems (Berkhout et al. 2011), power analysis (Smith & Stirling 2007)
  9. 9. 2. Project overview • Contrasting cases of low carbon innovation: high tech vs frugal tech • 3 sectoral case studies: energy, transport, agriculture • Solar PV vs solar water heaters • Electric cars vs electric 2-wheelers • GM crops vs agro-ecological systems
  10. 10. 3. Case study: Solar energy
  11. 11. 3. Case study: Solar energy • Prospects solar PV: • First silicon PV cell produced in USA in 1950s • Combination of independent innovation and foreign technology, domestic firms have built a “PV industry with Chinese characteristics” (NDRC, 2012:4). • Export-oriented: 95% of PV systems exported, mainly to Europe (Germany) and USA (REN21, 2012; Fischer, 2014). • Almost 60% of total global solar PV production from China, with an export value of US$20.2 billion (NDRC, 2012; Sun et al, 2014). • Domestic installed capacity (5%): 12 GW by 2013, target is to install 35 GW by end of 2015 (Sun et al, 2014), mainly ground-mounted large- scale solar plants • Historically expensive, but sharp decrease in prices in recent years: 1$/Watt • Currently 6 of global top 10 solar PV firms are Chinese: Yingli Green Energy; Trina Solar; Jinko Solar; Rene Solar; Hanwha SolarOne; JA Solar.
  12. 12. 3. Case study: Solar energy • Prospects solar WH: • “Undiscussed protagonist” of a transition from fossil fuels to low carbon energy (Annini et al, 2014:152). • Domestic-oriented: China is the world’s largest solar hot water market: more than 65% of world capacity (REN21, 2011), and they are used by over 30 million households in China (CGTI, 2009). • Leading innovation: evacuated tube design, designed at Tsinghua University in 1990s: low cost, indigenous innovation • Chinese firms hold 95% of the patents for core technologies of solar water heaters worldwide (CGTI, 2009). • Used predominantly on small-scale, in rural & urban areas, cost a couple of hundred $ per SWH (IEA, 2014) • Some 3,000 solar water heater firms, with Himin Solar and several Shandong-based firms being the top sellers (Hu et al, 2012)
  13. 13. 3. Case study: Solar energy • Politics and policies solar PV • Supported by national government, such as embedded in NDRC targets and Five Year Plans • Ministry of Science and Technology (MOST) drives forward R&D, with an average annual investment of around 500 million yuan (around US$81 million) (Wang, Shu and Lu, 2013) • Local government provided free or low-cost loans, tax rebates, research grants, cheap land (Chen, 2014), e.g. in Jiangsu and Shandong provinces • Feed-in-tariff, but grid connectivity challenges, mainly bureaucratic hurdle • Paradox of large-scale development of PV industry without complementary policy support for creating a domestic market (Fischer, 2012) • Twin challenge of export of PV systems, but import of purified silicon (Chen, 2014), industry vulnerable to financial crisis & anti-dumping laws (Mazzucato, 2013)
  14. 14. 3. Case study: Solar energy • Politics and policies solar WH • National-level support for R&D until the 1990s • Relatively little stable national financing incentives after the evacuated tube design was commercialised in 1998 • SWH targets mentioned in national policy documents in early 2000s, less afterwards e.g. 12th Five Year Plan focuses mainly on solar PV • Strong support at the local level from government and bureaucrats: a mandatory requirement to install solar water heaters as part of every new building in several provinces and cities; purchase subsidies for SWH in rural areas (Hu et al, 2012). • Growth of SWH industry linked to local employment for private firms & SOEs, tax revenues for local governments, economic growth and increased competitiveness for the province and/or municipality
  15. 15. 3. Case study: Solar energy • Practice solar PV • Global financial crisis and trade disputes with the EU and US made domestic market more attractive • Rapid increase in installed solar PV capacity in China • But…. Major challenges like “lack of enabling business and knowledge environment; lack of adequate policy support; and competing strategic policy considerations” (Fischer, 2012:132) • Relatively high prices for individual buyers • Difficulty of installing solar PV modules – many potential consumers do not own or have access to roof space • Connectivity with the grid is technically and bureaucratically challenging, despite feed-in-tariff • Within China PV is mainly used in ground-mounted, large-scale installations, for which financial incentives are particularly crucial.
  16. 16. 3. Case study: Solar energy • Practice solar SW • Rapid increase of SWH, mainly popular in rural areas and small towns, although some leading firms are increasingly attracting urban customers • Solar water heaters meet the demand of millions of Chinese customers by offering good quality, high performance, but at a low cost (Hu et al, 2012). • Reduces pressure during peak load, contributes to energy security and opportunities for economic growth at the local and provincial level (Li et al, 2011). • Relaxed building codes enable setting up solar water heaters on roofs without planning permission or other bureaucratic rules. • Quality is key as low quality SWH can result in a range of adverse effects, including water damage to buildings. • Day-to-day practice may change as SWH can behave different to electric or gas WH • Evacuated tube solar water heater as a dominant, low cost Chinese innovation that has already changed socio-technical preferences for water heating for 30 million Chinese households (Annini, 2014).
  17. 17. 4. Conclusion • China’s approach to low carbon innovation in solar energy is two- fold: • High tech, export-oriented, large-scale / industrial-scale, still rather expensive, top-down, driven by central government, national firms • VS frugal tech, domestically-oriented, small-scale / individual- scale, cheaper, bottom-up, driven by local government, local firms & local demand • The ‘hidden champion’ of solar water heaters is flourishing at the provincial level, largely uninfluenced by central government, domestically developed technology, driven by affordable prices and large local demand • Similar trends can be seen in transport & agriculture • Alternative, decentralised, citizen-led, bottom-up low carbon transitions for a green economy can be powerful tools to mitigate climate change in China and beyond
  18. 18. • Thank you for your attention • Questions?