COST OF RENEWABLES DROPS AS CHINA GOES GREEN

CHINA Energy security, smog and industrial strategies drive China to drop coal as its main source of energy and become the world leader in renewables. The rest of the world will see rapidly sinking costs for wind and solar technology.

Chinese coal-fired power plants are responsible for 250,000 premature deaths annually. Tourism is declining because of the cities’ black skies. But the country with the largest carbon emissions in the world has also become the world leader in using and producing wind turbines and solar PV cells.

“China is leading the way. By placing the emphasis on production scale and market growth, it is contributing more than any other country to a climate-change solution. Its build-up of renewable-energy systems on a serious scale is driving cost reductions that will make hydro, wind and solar power accessible to all,” says Hao Tan at the University of Newcastle, Australia.

Head of BU Renewables at Vattenfall, Gunnar Groebler, is monitoring the Chinese development very closely: “For us, it's interesting to see Chinese suppliers entering the European market and adopting their technology and approach to our standards. Then we can invite them for tenders and challenge the established players a bit. To stay in the wind business, it is absolutely necessary to reduce the levelized energy cost as the national support schemes are expecting the market to reduce costs.”

Levelized energy cost is the net cost to install a renewable energy system divided by its expected life-time energy output.

Innovation is part of why the costs of technology have decreased but the main driver has been market expansion. “This is part of China’s strategy to become the workshop of the world. They are securing the energy supply to their industry and increasing their export of equipment for renewable energy production,” says Hao Tan.

Sometime after 2001, China decided to cut down on coal consumption and expand on renewables using its strengths in manufacturing, export and supply chain management.

“China did as they have done before. They push the business development with governmental support and invite international market players that understand the technology to invest, like for example Vestas, Senvion and Gamesa. Then they develop and set up their own development processes in China. Once they are competitive, they slowly start to move outside China, as we see right now,” says Gunnar Groebler.

Annual wind power potential

Read more about the driving forces for China's renewewable revolution:
Global Research 

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