As the Chinese government paves the way in green energy and mandates that power companies generate more electricity from renewable sources, billions of yuan are being invested in green energy.
Although coal remains the main energy source and will most likely stay that way in the foreseeable future, the rise of renewable energy, especially wind power, is helping to slow China's reliance on coal and curtail emissions of global warming gases.
This year China is on track to pass the United States as the world's largest market for wind turbines. The Global Wind Energy Council reports that China has doubled its wind power capacity in each of the last four years. Other green energy projects, such as burning waste to generate electricity, are also sprouting up.
As recently as the start of last year, the government's target was to have 5,000 megawatts of wind power installed by the end of 2010. This is the equivalent of eight large coal-fired power plants. While it is quite a lofty goal, it is still only a tiny proportion of China's energy usage.
Yet, a potentially huge market is in the making. Interestingly, as investment has tapered off in other industries during the financial crisis, renewable energy is a much sought-after area for venture capital firms, not just due to the government's mandates, but also because banks are eager to lend them more money. Renewable energy businesses are also subject to few regulatory restrictions.
Mingyang Wind Power Technology Company Limited, a major wind power manufacturer based in Zhongshan, Guangdong province, has grown from an electrical switch cabinet factory to a leading turbine maker in merely 16 years.
The company recently received 60 million yuan in subsidies from the central government. Money is also pouring in from other channels.
"As far as I know, a lot of venture capital entered this area this year. A bunch of companies have sought partnership with our company since this year. Among them are GM and Mobil," said Wang Jinfa, Mingyang's vice president.
A big impetus was the government's requirement, issued in September 2007, requiring large power companies generate at least 3 percent of their electricity by the end of 2010 from renewable sources. The calculation excludes hydroelectric power, which already accounts for 21 percent of Chinese power, and nuclear power, which accounts for 1.1 percent.
"Because the wind power industry was written in the Pear River Delta Development Layout that was issued at the end of last year, it is a good opportunity to bring more companies into this area and strengthen the industry as a whole,"said Wang. "It is also a great opportunity for Mingyang."
Flush with money, Mingyang is aggressively pouring billions into technologies and setting up green research parks both at home and abroad, such as in Denmark.
(China Daily August 25, 2009)