The changing face of Chinese energy

Wind farming boosted by global emissions-cutting fund and national renewables law

Inner Mongolia has something to show the world. In some respects it’s only an ordinary wind farm, and just a medium-sized one at that (with 22 turbines and a total generating capacity of 25.8MW). What’s special about Huitengxile is the way it is financed - because 8% of the project costs will come from the Clean Development Mechanism (CDM), the Kyoto agreement’s special conduit for promoting carbon emissions savings in developing countries.

This is a big deal for three reasons. First, without CDM funding it’s unlikely that many wind farms in the region would be financially viable. That’s not because of any shortage of wind, but simply because the big coal-fired power stations of northern China produce such low-cost electricity - apart from the local and global environmental costs, that is. Secondly, because it’ll be the first CDM project registered in China since Kyoto took effect in February. Thirdly, because it’ll be the first wind farm anywhere in the world to get CDM support. The emissions reductions achieved there are being bought for a total of £1.75 million over 10 years on behalf of the Dutch government, which will be allowed to count them towards its own reductions target under Kyoto.

John Green of UK renewable energy consultants IT Power, who helped the Inner Mongolia Long Yuan Wind Power Development Company with the CDM application, now hopes that its template can be used to support other wind farms in developing countries.

China’s huge size, heavy dependence on coal, and soaring oil use already make it the world’s second largest greenhouse gas emitter [see GF51, ‘Smoking Dragon’]. Meeting the power needs which will accompany rapid economic growth over the next 15 years could entail a three-fold increase in those emissions compared with a 1990 baseline, according to the World Bank. But this could be reined in to less than a two-fold increase, the Bank says, with an aggressive programme to promote energy conservation and renewable energy.

Pursuing the nuclear power path is one part of China’s response, but this is also where a recently approved renewables law comes in, setting a target of 17% of power generation by 2020. That’s quite a stretch, with renewable energy still in its infancy in China.

It won’t all be wind. Biomass will have a big role, and solar power is especially important to the planned expansion of electrification in the underdeveloped west of the country. Unlike the UK, where photovoltaics is a microgen solution used mainly at the level of the individual building, western China has over 30,000 rural villages spread over a vast area. Some people there have never seen electric light bulbs in their entire life, and solar powered small local grids could realistically hope to meet power needs [see right].

Welcome as these intentions are, there’s still everything to prove. “The energy law is a necessary precondition for renewable energy growth in China, but it is not sufficient,” says Ryan Wiser, a renewable energy expert at the Lawrence Berkeley National Laboratory in California. “Like many laws in China, it leaves the details of the targets and policy implementation for subsequent regulatory decisions. It should be hailed as a step in the right direction, but still a first step. Much remains to be done to implement the law in a way that will allow renewable energy developers to be profitable.” - Roger East and Michael Rank

Bringing in the Sun

Solar power in China could reach 30GW by 2020, according to WWF. That’s no drop in the ocean - it’s 3% of the country’s total capacity. It’s also a big jump. Currently, installed solar PV can provide 60 MW. Almost a third of that is in the rural west. Dunhuang in Gansu province has a project to develop the world’s largest solar power plant, with a capacity of 8MW. It could be operational by next year. Plans for the Beijing 2008 Olympics include the installation of 2-3MW of solar PV within the various sports facilities.

22 July 2005

Michael Rank and Roger East