Posts Tagged ‘United States’

I wrote this story for Grist, where it first appeared on November 30, 2010.

A day after Energy Secretary Steven Chu’s “Sputnik speech,” in which he warned that China was investing billions in renewable energy while American politicians bickered over small-potatoes stimulus spending on green technology, a report from Ernst & Young released Tuesday confirmed Asia’s ascendancy.

“A new world is emerging in the clean energy sector with China now the clear leader in the global renewables market,” the report’s authors wrote.

Ernst & Young publishes a quarterly “country attractiveness” index for investors that ranks nations’ renewable energy policies, renewable energy markets, and other factors.

China took first place — again — ousting the U.S. from the spot it had occupied between 2006 and 2010.

“China’s record spending on its wind industry this quarter represented nearly half of all funds invested in new wind projects around the world,” the report states. “Figures released for the second quarter of 2010 showed that China invested around $10 billion in wind out of a global total of $20.5 billion.”

Half the wind turbines that will come online this year worldwide will have been made in China, according to the report.

“Since reaching top spot in our index in September, China has opened up a healthy gap from other markets,” Ben Warren, an Ernst & Young executive, said in a statement. “Cleantech, including renewable energy, represents a significant part of the country’s future economic growth plans.

“The level of wind energy being deployed in China shows what can be achieved with a carefully planned energy and industrial policy that elevates cleantech to a national strategic level,” he added. “The Chinese solar industry is also fast becoming of great importance in the global marketplace.”

And China clearly has its eye on the U.S. market. As I wrote last week, one of China’s largest solar companies has formed a joint venture with California startup SolarReserve to build photovoltaic power plants in the desert Southwest.

And it’s not just China the U.S. has to worry about in the green energy race. According to Ernst & Young, South Korea, Romania, Egypt, and Mexico are rising fast as their governments devote more resources to renewable energy.

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I wrote this story for Grist, where it first appeared.

The same day this week that The New York Times published an extensive report by correspondent Keith Bradsher on China’s massive subsidies for renewable energy companies, Ernst & Young released a study showing that, not surprisingly, China has overtaken the United States as the most attractive place for green tech investment.

“China’s steady rise to pole position has been underpinned by strong and consistent government support for renewable energy,” Ben Warren, Ernst & Young’s environment and energy infrastructure advisory leader, said in a statement. “This, together with substantial commitment from industry and the sheer scale of its natural resources, means that its position as top spot for renewable energy investment is well merited.”

Some of that government support may violate World Trade Organization rules. On Thursday, an American union, the United Steelworkers, filed an unfair trade complaint against China with the Office of the United States Trade Representative.

But the Ernst & Young report points to failures on the part of the U.S. government to take action that would attract green investors.

For one thing, Congress has so far failed to establish a national Renewable Energy Standard that would require the country’s utilities to obtain a certain percentage of electricity from non-carbon-emitting sources.

Also, a federal tax subsidy program that is spurring construction of big solar power plants expires at the end of the year and legislation to extend the incentives is languishing in Congress.

“Although the United States remains a highly attractive location for investors in renewable energy, it is clear that recent events have eased momentum,” said Warren. “The U.S. market continues to have significant potential but requires consistent legislative support to provide investors with the long-term confidence they need.”

China, in contrast, “aims to reach an installed capacity of 300GW [gigawatts] of hydro, 70GW of nuclear, 100GW of wind, and 20GW of solar capacity by 2020,” according to the Ernst & Young study.

Reports by the U.S. Energy Information Agency provide a glimpse of the green imbalance of trade between the two countries. The figures from 2008 — apparently the latest available from the government — show that fewer than 1 percent of U.S.-made solar modules were shipped to China while nearly 23 percent of Chinese-made photovoltaic modules were exported to the U.S.

Since then, Chinese imports have risen dramatically. At the end of 2009, for instance, Chinese firms supplied about half the California solar market alone, according to Bloomberg New Energy Finance, a consulting firm.

What China is not exporting, of course, is green jobs.

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img_1216_1photo: Todd Woody

The numbers are in, and as expected 2008 set a record year for the worldwide wind industry as new wind farms generating a total of 27,000 megawatts of greenhouse gas-free electricity came online, according to the Global Wind Energy Council.

The quick-click headline was that the United States overtook the world’s green superpower, Germany, by installing 8,358 megawatts in 2008  – a 50% jump from the previous year and enough wind energy to power two million American homes. But the big story this year will be China’s rapid emergence as the next global wind power.

China last year doubled its wind energy capacity – for the fourth straight year – adding 6,300 megawatts of new electricity generation for a  total capacity of 12,210 megawatts.  A third of the world’s new wind capacity last year was installed in Asia, with China  accounting for 73% of that power. China reached its 2010 target of generating 5,000 megawatts of wind-powered electricity in 2007 and is expected to hit its 2030 goal of 30,000 megawatts years early.

“In 2009, new installed capacity is expected to nearly double again, which will be one third or more of the world’s total new installed capacity for the year,” Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association, said in a statement.

Of course, 30,000 megawatts of wind is but a flicker in a country with more than 300,000 megawatts of coal-fired energy online but it’s huge by world standards and has spawned both a burgeoning domestic wind industry and growing investment by overseas companies. Denmark’s Vestas, the world’s largest turbine maker,  will open its fifth factory in China this year and it received orders for another 200 megawatts’ worth of turbines at the end of 2008. General Electric (GE), one of only two U.S. turbine makers, also operates a factory in China and in January the company announced a joint venture with China’s A-Power Energy Generation to make turbine gearboxes. In a separate deal with A-Power, GE will supply the company with 900 turbine gearboxes starting next year.

As the financial crisis slows growth in the U.S. and Europe, India is another potential wind power. It ended 2008 with 9,645 megawatts of wind energy and added more capacity that year – 1,800 megawatts – than former world leaders Germany and Spain. Indian turbine maker Suzlon also has been moving onto European turf, relocating its international headquarters to Denmark and acquiring German turbine manufacturer REPower.

Installed global wind capacity now stands at 120.8 gigawatts with the 2008 turbine market worth $47.5 billion, according to the Global Wind Energy Council.

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