November 23, 2009
Tracking a Rising Tiger: China
Last Update: 11/11/2005
Earlier this month, China surpassed Japan as the world's second largest economy and since, has snared a flurry of clean tech headlines that collectively tell a very clear story: China is rapidly and effectively securing its position as a global clean technology leader as the U.S. watches in stagnated wonder.
Below we've aggregated some of the most important updates coming out of China over recent weeks as it surges to the front of the global clean technology sector:
Energy Investment Showmanship to the Tune of $740 billion
Just hours after cap and trade failed in the Senate in late July, China announced a ten-year energy plan to invest $740 billion (5 trillion yuan) in clean energy. Details on the plan remain limited, but its implications are huge for China's dominance in the clean tech sector.
In Pursuit of Flight On Land
In early August, China announced the record-breaking development of a Maglev train that can travel approximately 620 kph and could one-day travel as fast 1,000 kph, the same speed as a Boeing 747. (H/t to American for Energy Leadership)
The Iron Hand of Energy Efficiency Goals
Earlier this month, Chinese Premier Wen Jiabao ordered the shut-down of more than 2000 energy intensive factories in an effort to meet the country's ambitious goal of being 20% less energy intense this year than in 2005.
However, a news report by Reuters cast doubt on the impact of the new policy, since a number of firms on the government's list had already shuttered the offending facilities, or had replaced them with even bigger ones.
U.S. Clean Tech Looks for Chinese Investment
First, U.S. VC's turned to China for prime investment opportunities, now U.S. clean tech companies are hoping to attract some of China's investment funds.
China Raises the Bar on Electric Vehicle Standards
In an effort to hasten commercialization of electric vehicles, the Chinese government has organized a new consortium of state-owned automakers and related manufacturers designed to improve standards for electric vehicles and offer the Chinese government more control over electric vehicle development. A major goal of the new group is to accelerate electric vehicle technology innovation through coordinated research efforts.
Investing to Tackle Electric Vehicle Market
In mid-August, China announced plans to invest nearly $15 billion to develop electric vehicles over the next few years, "which if true would make it one of the world's most ambitious attempts to develop more energy-efficient vehicles."
Chinese Solar Manufacturers Earn Wings in U.S. Market
Yingli Green Energy, a Chinese solar development and manufacturing firm, won a contract to supply 19,000 solar PV panels for Denver International Airport's immense 4.4 megawatts project - Colorado's largest commercial solar project. The contract expands China's growing presence in the U.S. solar PV market from California to the national stage.
The Chinese company only entered the United States in 2009 and by that year's end had captured nearly a third of the California solar market, the bright star of the U.S. solar system. Low-cost Chinese solar companies now supply almost half the California market, according to Bloomberg New Energy Finance, a consulting and research firm.
Chinese Five Year Plan Set to Include Strict Energy Goals Backed By Massive Clean Technology Investment Plan
Chinese leaders are planning to introduce the nation's new five year economic plan to the National People's Congress today, which will reportedly include a significant escalation in nationwide carbon emissions intensity and energy efficiency targets. The plan will set a goal of a 15 to 20 percent reduction in energy intensity and a 40 to 45 percent reduction in carbon intensity of the economy by 2025. These targets will be backed by a massive new government investment plan directing $753 billion (5 trillion yuan) towards clean technology development and deployment over the next 10 years.
China Clear Leader in Global Clean Energy Race
The WorldWatch Institute released a report this week heralding China as the undisputed leader in global clean energy markets and anticipating significant future growth for the country in this sector largely thanks its' government's policies and investments.
WorldWatch Institute President Christopher Flavin remarked:
"China is succeeding precisely where the United States is failing -- in implementing the ambitious policies and making the sustained investment that is needed to spur growth in clean energy. If China keeps on its current pace, it will be the undisputed global leader in clean energy within the next two years."
The report illustrates that in 2009, the Chinese wind power market surpassed the US to become the largest market in the world. China also leads the world in small-hydro capacity and retains 40% of the solar PV global market.
France and China's Joint Foray into Nuclear Technology
French President Nicolas Sarkozy announced yesterday the formation of a strategic partnership in civilian nuclear power between his country and China. The partnership will include $20 billion worth of deals, including technology transfer between the two countries, joint exploiting of uranium mines, fuel recycling and uranium reaction. The signing of a $3.5 billion contract between China and French energy firm Areva to supply 20,000 tonnes of uranium to China's Guangdong Nuclear Power Corp. kicked off the partnership.
"The partnership marks the coming together of French expertise in civilian nuclear power -- France is overwhelmingly dependent on nuclear energy -- and China's insatiable appetite for cheap energy to fuel its economic growth."
China draws General Electric into $2B Joint Venture Agreements
General Electric (GE) plans to invest more than $2B in the development and production of low-carbon technologies in China through 2012. The company has signed four joint venture agreements with Chinese companies, two with state-owned energy grid operators and two with state owned rail firms, to pursue R&D, manufacturing, technology and financial services joint ventures, all in clean energy technologies. The company will also spend $500M on customer innovation centers throughout the country.
GE chose to pursue these public-private partnerships with China because:
"China is an increasingly important market for firms developing clean energy products and services as it continues to provide generous subsidies even as emissions legislation appears to have stalled in the US."
Chinese Turbine Manufacturer Wins Major US Wind Project
The first large American wind farm using Chinese-made wind turbines will be built in Illinois by the Xinjiang Goldwind Science & Technology Co. of China, the company announced yesterday. The 106.5-megawatt project will cost between $150 and $200 million, and will use 71 of the Chinese companies' wind turbines. The wind farm, which will also be administered by Goldwind, will sell power to Commonwealth Edison Co., the largest power supplier in Illinois, in a 20 year power purchase agreement.
This is the second wind project to be built in the United States by the Goldwind Co., after the completion of the company's 4.5 megawatt project in Minnesota in 2010.
Stay tuned for continued coverage as we track China's clean technology progress, as well as other rising clean tech tigers, for our forthcoming update to "Rising Tigers, Sleeping Giant."