China Needs to Increase Renewable Energy Capacity

China, the world’s biggest polluter, needs to pick up the pace of increasing the nation’s capacity to produce power from renewable energy sources for 2020 targets to be met, a government official said.

The country must increase the pace of capacity expansion by 50 percent, Li Zuojun, vice director of resources and environment at the State Council’s development research center, said at a conference in Shanghai today.

China aims to boost the share of non-fossil fuels in its primary energy consumption to 15 percent by 2020 to rely less on more polluting sources such as coal. The 2020 renewable energy capacity targets include an installed capacity of 100 gigawatts of windpower and 20 gigawatts of solar units, Zhang Guobao, head of the National Energy Administration, said in May.

The government may publish a plan to develop renewable energy by 2020 “very soon,” Li said in an interview. A draft of the plan is pending approval from the State Council, he said. Companies operating power grids will be required to buy all electricity generated by renewable energy, he said.

High costs and technical difficulty are the major barriers faced by producers of electricity from renewable energy, Li said.

The cost of production for wind power is about 8,000 yuan ($1,179) to 9,000 yuan a kilowatt, while the on-grid price for electricity produced by wind power is 0.5 to 0.6 yuan a kilowatt-hour, according to Li.

Solar power costs about 18,000 yuan a kilowatt while the on-grid tariff is about 1 yuan a kilowatt-hour, he said.

The government will increase investment in a renewable- energy fund that will compensate grid operators for the higher cost of electricity purchases, Li said.

Source:  Bloomberg Businessweek                                                                             Published on: July 06, 2010

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