CIAO DATE: 08/07

Georgetown Journal of International Affairs

Georgetown Journal of International Affairs, Volume 7, Number 2, Summer/Fall 2006

 

Leading the Renewable Energy Revolution
Joanna I. Lewis

 

Excerpt

Joanna I. Lewis is a senior international fellow at the Pew Center on Global Climate Change and an adjunct assistant professor at Georgetown University's Walsh School of Foreign Service in the Science, Technology, and International Affairs program.

China is a particularly important place in which to examine the opportunities for renewable energy development due to the size of its current energy demand and its projected renewable energy market potential. In addition to promoting renewable energy development, China is committed to developing indigenous renewable energy technology industries, motivated by the economic—as well as the environmental—benefits these technology industries provide. Already a global leader in solar thermal technology manufacturing and in manufacturing small hydro and wind turbines, China also has burgeoning solar photovoltaic (PV) and utility-scale wind turbine industries. With newly enacted national legislation to promote the development and dissemination of these technologies, many of China’s renewable energy markets are just now beginning to mature. The entry of Chinese manufacturers into rapidly expanding global markets may drive down costs and increase the viability of renewable energy technology utilization worldwide, in both developing and developed country applications.

China consumes and produces more coal than any other nation in the world: two-thirds of its total primary energy consumption and three-quarters of electricity generation come from coal. Consequently, China is the second largest national emitter of carbon dioxide after the United States. Because its energy consumption and carbon emissions are growing rapidly, China is expected to surpass the United States in these two categories sometime in the next few decades. Energy use has grown faster than GDP in China over the past three years, with coal comprising more than two-thirds of the increase in primary energy supply over this time period.1 Although the Chinese government has historically promoted an energy development plan that relied on indigenous energy resources as much as possible, oil imports are now rising rapidly to meet new demand, stimulating increased energy security concerns.2

However, a substantial mismatch exists between the geographic distribution of China’s abundant coal resources and China’s major centers of population, industry, and economic growth. Both the highest quality and highest concentration of coal reserves are generally found in the north, while the energy-hungry and economically dynamic areas of southern and eastern China only have about 5 percent of national coal reserves.3 These regional resource imbalances have played a role in triggering power supply crises. For example, seasonal fluctuations in hydropower have led southern China to increase its demand for coal-fired power in drought periods, precipitating a nationwide “power famine” or “coal rush.”4 In addition, the transmission of power over thousands of kilometers from the economically underdeveloped west and north to the major load centers of the east and south significantly adds to the cost of the electricity supply and also constrains the development of the power sector.

It is in this context that China has begun to pursue renewable energy options. Renewable energy technologies can generate electricity in places where fossil fuels are scarce, promoting domestic energy security while reducing environmentally damaging emissions. Wind energy has proven to be a particularly valuable contribution to China’s energy mix by providing a cost-competitive option in regions where coal is scarce and electricity prices are highest—primarily along China’s eastern coast. Wind electricity prices, although higher than coal electricity prices, are competitive with electricity prices from new natural gas plants, new nuclear plants, and even hydropower plants when the power is transported over long distances.

1 Jonathan E. Sinton, ed, David G. Fridley, Joanna I. Lewis, Yanxia Chen, Jieming Lin, and Nan Zhou, China Energy Databook, sixth revised edition (Berkeley: Lawrence Berkeley National Laboratory, June 2004).
2 Gal Luft, “Fueling the dragon: China's race into the oil market,” Institute for the Analysis of Global Security, Internet, http://www.iags.org/china.htm (Date accessed: 30 April 2006); Downs, Erica Strecker, China’s Quest for Energy Security, RAND Corporation, Internet, http://www.rand.org/pubs/monograph_reports/MR1244/index.html (Date accessed: 30 April 2006).
3 Sinton et al., 2004.
4 Qiu Xin, 2005, “China overhauls energy bureaucracy,” Asia Times, 3 June 2005. Available at: http://www.atimes.com/atimes/China/GF03Ad01.html