Green Energy in China: Renewable sources, capacity growth and the future outlook

Report Summary

China is one of the fastest growing economies in the Asia-Pacific region. Despite the global economic slowdown in 2008 and 2009, China continued to add new generation capacity to meet the anticipated rise in demand for electricity in the future. Presently, China is the world’s second largest total primary energy consumer, second only to the US. China has also emerged as the largest CO2 emitter in the world. As China’s economy continues to grow, its demand for electricity is anticipated to grow. Hence, China is expected to promote the development of renewable energy technology. The country promotes the development of renewable energy technology via combination of laws, feed-in tariff mechanism, programs, and policies. These encourage the development and utilization of renewables for electricity generation.

This report documents the growth of the Chinese renewable energy market, showing its current status and projecting where it is likely to grow to in the foreseeable future.

This document gathers the statistical data on the different types of energy generation, combines and contrasts them against each other to show the clear leaders, drivers to change and future growth.

Key Features

• Overview of China’s electricity market with focus on renewable energy. Analysis of energy type volumes, and capacity installed in China.
• Growth of renewables – installed capacity and generation, government mandates and incentives, and comparative economics.
• Information and analysis by renewable energy sector – wind, solar, biomass, hydro, and geothermal.
• Installed capacity and generation, global comparison, key players, economics, drivers, resistors, and outlook for each renewable energy sector.

Key Benefits

• Achieve a quick and comprehensive understanding of how China’s market trends and legislation are influencing the development of the renewable energy market.
• Assess the emerging trends in renewable energy technology – wind, solar, biomass, hydropower, and geothermal - capacity and generation.
• Quantify value and volume growth potential in China’s electricity market and in energy generation technology type.
• Understand the major issues affecting general electricity market and renewable electricity in particular.
• Predict the key growth areas in China’s renewable energy industry.

Key findings

China has reportedly succeeded in achieving a net reduction of 600m tons of carbon dioxide annually through the use of renewable energy. China’s share of renewable energy was 8% of its total primary energy consumption in 2009.

China has overtaken Germany in terms of global cumulative installed wind power capacity in 2009. Further, China is increasing its presence in the off-shore wind segment by investing in this sector.

Additional investments through government support aiming at solar power technological advancements would help China achieve 20GW of solar PV installed capacity by 2020 from the current levels of 160MW of annual installed solar PV capacity.

Although growth prospects of biomass power generation exist, China's biomass market is yet to scale up to a commercial level. China is expecting to achieve 30GW of installed biomass capacity by 2020, while improving the process of feedstock collection.

Falling water resource availability and negative impact on environment is likely to limit large hydro power expansion in China beyond 2020. The Chinese government is expected to encourage growth of small hydropower growth as it creates less environmental damage when compared to large hydro.

Key questions answered by this report

• What are the drivers and resistors shaping and influencing the renewable energy industry in China?
• How will renewable energy technologies capacity share perform to 2020? What are the opportunities?
• What is the policy framework governing the renewable energy market?
• Which renewable energy technology types are likely to grow strongly?
• What is the potential of various renewable energy technologies?

Table of Contents

Disclaimer 2
Executive summary 12
Market overview 12
Wind power 13
Solar power 14
Biomass 15
Hydropower 16
Geothermal 17
Future outlook 17

Chapter 1 Market overview 19
Summary 19
Overview of the global electricity market 20
Overview of China's electricity market 22
Demand for electricity 22
Installed generation capacity and generation 22
China’s primary energy trends 24
Electricity market structure 27
Overview of China's renewable energy market 29
Installed generation capacity and generation 29
Drivers of renewable energy 30
Rising carbon emissions 30
Chinese government mandates and incentives 31
Modernizing the national grid 33
Resistors of renewable energy 35
High cost of technology makes electricity generation using renewables expensive 35
Price mechanism varies across renewable energy technologies 35
Unconnected power grid hampers large scale renewable energy integration 35
Fragmented T&D structure hinders electricity generation via renewables 36
Delay in project approvals due to bureaucratic procedures 37
Others 37
Comparative economics 37
Global comparison 41

Chapter 2 Wind power 43
Summary 43
Wind power market overview 44
Current scenario of the wind power market 44
Installed generation capacity and generation 44
China’s wind resources 47
China’s key offshore wind power construction sites 48
Global comparison 49
Key players 53
Economics 56
Drivers of wind power 57
Regulatory framework supports wind power development 57
Identification of wind power potential to aid further development 57
The role of economic stimulus 58
Supportive government policies 59
Change in Chinese wind turbine’s domestic component manufacturing requirement 60
Active international presence 61
Resistors of wind power 61
Differences in product quality of domestically manufactured wind turbines 61
Tariff rate differences 61
Transmission delays 62
Dependence on imported technologies 62
Wind power outlook 62

Chapter 3 Solar power 65
Summary 65
Solar power market overview 66
Current scenario of the solar power market 66
Installed generation capacity and generation 66
Global comparison 69
Key players 71
Economics 71
Drivers of solar power 72
Geographic advantage 72
Concentrating solar power (CSP) technology to drive solar power growth 73
Government incentives 73
Emerging low cost production base 74
Resistors of solar power 75
Absence of national level solar PV policy 75
High dependence on imports threatens the domestic growth of solar PV market 75
Lack of grid connectivity 76
Solar power outlook 76

Chapter 4 Biomass 80
Summary 80
Biomass power market overview 81
Current scenario of the biomass power market 81
Installed generation capacity and generation 81
China’s main biomass feedstock 82
Global comparison 86
Key players 87
Economics 87
Drivers of biomass 88
Abundant biomass resource availability 88
Government support promotes biomass market growth 88
Direct-fired biomass power generation technology to grow 88
Growing significance of biofuels 89
Resistors of biomass 89
Barriers to co-firing generation 89
Lack of land availability hinders bio-fuels production 90
Biomass outlook 90

Chapter 5 Hydropower 92
Summary 92
Hydropower market overview 93
Current scenario of the hydropower market 93
Installed generation capacity and generation 93
Global comparison 97
Key players 98
Economics 99
Drivers of hydropower 99
Abundant resources available 99
Government incentives and mandates promote small hydropower growth 99
Resistors of hydropower 103
Ecological concerns to moderate hydropower growth 103
High capital intensive 104
Hydropower outlook 104

Chapter 6 Geothermal 106
Summary 106
Geothermal power market overview 107
Current scenario of the geothermal power market 107
Installed generation capacity and generation 107
Global comparison 107
Key players 108
Economics 108
Drivers of geothermal 109
Emerging geothermal potential 109
Resistors of geothermal 109
Geothermal power outlook 110

Chapter 7 Future outlook 111
Summary 111
Outlook for the Chinese electricity sector 112
Outlook for renewables 115
Wind power 116
Solar power 117
Biomass 118
Hydropower 119
Geothermal 121
Appendix 122
Abbreviations 122
References 124

List of Figures

Figure 1: World electricity generation 2009 (%), 2010 21
Figure 2: China’s installed generation capacity 2005–09 (GW), 2010 23
Figure 3: China's electricity generation 2005–09 (TWh), 2010 24
Figure 4: China's primary energy trends, 2004–08 (10,000 tons of SCE), 2009 26
Figure 5: China's primary energy production in 2008 (% of total primary energy production),
2009 27
Figure 6: China’s power grid structure, 2009 29
Figure 7: China’s independent power grid structure, 2009 36
Figure 8: China's cumulative installed wind power capacity 2005–09 (MW), 2010 45
Figure 9: China's wind power net generation 2004–08 (bn kWh), 2010 46
Figure 10: China's wind energy resources (W/m2), 2008 48
Figure 11: China’s key offshore wind power construction sites, 2010 49
Figure 12: Global cumulative installed wind power capacity 2009 (MW), 2010 51
Figure 13: Global new installed wind power capacity 2009 (MW), 2010 52
Figure 14: China's key players and installed wind power capacity 2009 (MW), 2010 55
Figure 15: China's wind power generation projections 2015–35 (bn kWh), 2010 64
Figure 16: China's cumulative installed solar PV capacity 2005–09 (MW), 2010 67
Figure 17: Division of China’s solar resources, 2009 68
Figure 18: Global cumulative installed solar PV power capacity 2009 (MW), 2010 70
Figure 19: China's annual installed solar PV power capacity 2010–14 (MW), 2010 78
Figure 20: China's projected cumulative installed solar PV generation capacity 2010–2014 (MW),
2010 79
Figure 21: China’s cumulative installed biomass capacity 2004–08 (MW), 2009 82
Figure 22: China’s additional installed biomass generation capacity (%), 2009 83
Figure 23: China's biomass and waste electricity net generation 2004–08 (bn kWh), 2010 84
Figure 24: Biomass power generation plants in China, 2009 85
Figure 25: Potential available biomass resources in China 2030 (%), 2008 91
Figure 26: China's installed hydropower generation capacity 2004–08 (GW), 2010 94
Figure 27: China's installed small hydropower generation capacity 2004–08 (MW), 2009 95
Figure 28: China's hydropower net generation 2004–08 (bn kWh), 2010 96
Figure 29: Installed small hydropower generation capacity in China, 2010 102
Figure 30: China's hydropower generation projections 2015–2035 (bn kWh), 2010 105
Figure 31: China's total installed generation capacity 2007–35 (GW), 2010 113
Figure 32: China's total installed generation capacity 2035 (%), 2010 114
Figure 33: China's total population 2009–2050 (bn), 2009 115
Figure 34: Installed wind generation capacity 2009 and 2020 (GW), 2010 117
Figure 35: Installed solar generation capacity 2009 and 2020 (GW), 2010 118
Figure 36: Biomass installed power generation capacity 2009 and 2020 (GW), 2010 119
Figure 37: Installed hydropower generation capacity 2009 and 2020 (GW), 2010 120

List of  Table

Table 1: World electricity generation 2005–09 (TWh), 2010 21
Table 2: China’s installed generation capacity 2005–09 (GW), 2010 23
Table 3: China's electricity generation 2005–09 (TWh), 2010 24
Table 4: China's primary energy trends, 2004–08 (10,000 tons of SCE), 2009 25
Table 5: China's primary energy production 2004–08 (% of total primary energy production),
2009 27
Table 6: China's renewable electricity net generation by source 2004–08 (bn kWh), 2010 30
Table 7: China's renewable energy deployment targets, 2005–2020 34
Table 8: Cost of electricity generation by fuel type, 2008 38
Table 9: Highlights of provisional administrative measures on pricing and cost sharing for
renewable energy power generation, January 2006 40
Table 10: Cumulative installed renewable energy capacity rankings, 2009 42
Table 11: China's cumulative installed wind power capacity 2005–09 (MW), 2010 45
Table 12: China's wind power net generation 2004–08 (bn kWh), 2010 46
Table 13: Global cumulative installed wind power generation capacity 2009 (MW), 2010 50
Table 14: Global new installed wind power capacity 2009 (MW), 2010 52
Table 15: China's key players and installed generation capacity 2009 (MW), 2010 54
Table 16: China's wind power generation projections 2015–35 (bn kWh), 2010 64
Table 17: China's cumulative installed solar PV capacity 2005–09 (MW), 2010 67
Table 18: Division of China’s solar resources, 2009 69
Table 19: Global cumulative installed solar PV capacity 2009 (MW), 2010 70
Table 20: China's annual installed solar photovoltaic (PV) generation capacity 2010–14 (MW),
2010 77
Table 21: China's projected cumulative installed solar PV generation capacity 2010–14 (MW),
2010 78
Table 22: China’s cumulative installed biomass capacity 2004–08 (MW), 2009 81
Table 23: China’s additional installed biomass generation capacity 2004–08 (MW), 2009 83
Table 24: China's biomass and waste electricity net generation 2004–08 (bn kWh), 2010 84
Table 25: Top five countries biomass capacity rankings (2009), 2010 86
Table 26: Potential available biomass resources in China 2006– 2030 (100m tce), 2008 91
Table 27: China's installed hydropower generation capacity 2004–08 (GW), 2010 93
Table 28: China's installed small hydropower generation capacity 2004–08 (MW), 2009 95
Table 29: China's hydropower net generation 2004–08 (bn kWh), 2010 96
Table 30: Top five countries hydropower capacity rankings (2009), 2010 98
Table 31: Installed small hydropower generation capacity in China, 2010 102
Table 32: China's hydropower generation projections 2015–2035 (bn kWh), 2010 105
Table 33: China's total installed generation capacity 2007–35 (GW), 2010 113
Table 34: China's total population 2009–2050 ('000), 2009 115
Table 35: Installed wind generation capacity 2009 and 2020 (GW), 2010 116
Table 36: Installed solar generation capacity 2009 and 2020 (GW), 2010 118
Table 37: Installed biomass power generation capacity 2009 and 2020 (GW), 2010 119
Table 38: Installed hydropower generation capacity 2009 and 2020 (GW), 2010 120