China is becoming a key player in the Green Energy field. Not only as a market for Green Energy technologies, but also as as a global manufacturing and sourcing location. China, no less than Germany, Japan, and the USA, is a key market for Green Energy. Companies who wish to participate on a global basis in this segment must include China in their plans.

China's Challenges

An emergent China faces increasing challenegs: with over 70% of China’s energy coming from coal, and consumption of energy per capita increasing as more people purchase cars, or move into the cities, there are valid concerns over pollution and the subsequent economic and health costs associated with pollution. There is also an increasing need to import oil and gas, which gives rise to valid concerns about energy security. China needs to take action to address these issues.

China's response has been to implement strong laws in the areas of renewable energy, pollution control, and energy efficiency with varying degrees of sucess. Opportunities for foreign companies in China exist in both the Renewable Energy space as well as Energy Saving space.

Solar

China is potentially a huge market, and player, in the area of Solar Energy. It must start to replace its use of coal and oil as a basis for energy with alternative clean energy sources. China has a huge base of Solar resources with much of it in hinterland areas where China has had a big problem delivering energy. With such significant solar resources it makes sense that solar energy in all forms be part of the solution.China has become the global market leader for the manufacturing of solar PV based systems. While it has not traditionally been a big end-user of PV solar panels systems, this must change in the future. Although China has had in-feeding tariffs to support renewable energy in general, one of the key problems facing the development of its solar PV market has been the lack of large enough tariffs to offset the larger costs associated with solar PV systems.The question for most observers of the China Solar sector is: exactly when will China Solar PV takeoff? This remains unclear!!

Wind

China also has significant wind resources and is an ideal location for use of Wind Power.It is already a huge market for wind power equipment but with the rise of several large Domestic Wind manufacturers Global competitors are seeing a huge decrease in their Market Share in China. In addition, these Chinese giants are now starting to reach out to markets around the world to expand overseas. With significant cost advantages, a willingness to reduce profit to gain market share, and in some cases quite good financing, they are a real challenge for global Wind Companies.

Of course like all markets in China, wind power faces its own set of challenges. One major issue in the China market has been the implementation and enforcement of grid connections which has been an ongoing problem for many of these wind power plants. This has led to wind generating capacity lying idle in some cases.

The China wind market still has a long way to go. China will continue to grow rapidly and be a major market for wind power equipment well through 2030.

Other

China has also seen extensive growth in other areas of renewable energy. There are numerous projects in the areas of bio-mass, bio-fuel, Waste to Energy (WTE), and China even has several trials or smaller projects initiated in the areas of wave power, and geothermal. Of course Water resources, issues with ariable land to grow Corn or other bio-diesel crops, has meant that making land availlable for non food uses is difficult. China continues to be very aggressive with its expansion plans in this area, with plans to have bio-forests of 13.3 million hectares by 2020, which could produce 6 million metric tons of fuel. Currently it looks like these forests will be based on the Jatropha tree which can grow in locations where food plants cannot and has the advantages of quite high yields and minimal water requirements. As can be seen in the chart, below, the forecasted ramp up for biodiesel consumption through 2020 is quite steep.

Due to its huge coal resources China has also invested significantly in coal to liquids, coal to gas, and clean coal projects as a cleaner method of utilizing its significant coal resources.

Energy Savings:

China continues to focus its efforts in this area, and its laws and policies at many levels of government on energy savings and pollution control are in many ways more advanced than some supposedly more developed economies.An excellent example of this is the regulation of the Automobile industry in China where taxes based on engine size have been implemented, providing tax breaks to people who buy smaller, more fuel effecienct, cars.

In other areas China is working hard to reduce energy use and pollution. Industry in China has been the biggest carbon emitter consuming more than 70% of all of China's energy. As the economy has grown China has identified 6 major industries that account for over 50% of the country's power consumption.These industries have become targeted in an effort to reduce China's energy usage, with the main focus on the top 1000 consuming companies of energy.

In an attempt to reduce energy waste China has set and monitored very severe targets for these industries (and their top 1000) and they have responded in turn by closing down wasteful units and investing in newer technologies that are both more efficient and less polluting.

What does this mean for our potential customers?

Obviously there have been vast improvements in China's reaction to climate change and pollution concerns and its very aggressive plans and regulations in the areas of renewable energy, and energy efficiency. But, China still has a long way to go.

China is also becoming a key sourcing location for Green Energy products and there are many opportunities for foreign companies to source products here and benefit from those cost reductions. In addition, China has many locally home grown products that offer value to global customers.

There remain huge opportunities in China for key “green” technology companies having something unique to offer. This need not only be for the large MNCs. Small to mid-sized players with newer technologies that bring value in the above areas will also have significant opportunities. China, of course, is not an easy market for players new to the game. Let us help you take advantage of these huge opportunities.