China New Energy and Environment Report 2006

This report provides you with information on the development of new energy and environment market in China. New energy includes hydro, wind, solar, bio mass, thermal, and etc. Environment includes pollution controls for water, air, solid waste, and etc.

China, as the world most populated country, has become one of the most polluted countries on this planet through its rapid economic development and massive use of fossil based energy. Today, China is the second largest energy consumer and the second largest energy producer in the world. Different with many developed counties, China’s primary energy source is coal, which counts more than sixty percents of its total national energy consumption. According to Chinese energy specialist, this situation with using coal as the primary energy source will continue for at least next 15 to 20 years.

China is also the second largest emitter of energy-related carbon dioxide emissions after the United States. It ranks very low in term of energy efficiency per GDP earned. Since 1978, China opens itself to the world and enjoyed high economic growth at average 8-10% year over year. Many economists predict this rapid GDP growth will continue at minimum 6% till 2015. Energy consumption in China has grown 6-7% annually, which is slower than its economic growth. Most Chinese economic growth comes from resource incentive industries. China’s economic success has cost huge environmental and health drawbacks. These already become a threat to its sustainable economic development.

To respond to the increased environmental and health problems, Chinese government has implemented different strategies and regulations to restrict pollution sources, improve energy efficiency, and increase use of clean energy. China’s Promotion Law for Renewable Energy & Utilization was passed by National People’s Congress (NPC) in 2005 and become effective starting Jan 1st, 2006. In 2006, China issued its 11th five-year plan, which states environment, energy efficiency, sustainable economic development are the top priorities. Also in 2006, China starts taking green GDP as one of the performance assessment tools to evaluate its top regional government officials. Just before the end of 2006, National Reform and Development Committee (NDRC) appointed Mr. Xie Zhenhua, the former Director General of State Environment Protection Agency (SEPA), the deputy chairman (minister level) of NDRC, and his primary responsibilities are environment and energy efficiency. This is the highest level appointment of any environmental official in China. These are the clear indications that China is focusing its green development. It makes China a very attractive market for green business.

Norway, as an energy nation, has lots of knowledge and experiences in clean energy production, energy efficiency, and environment management. By realizing the green demand in China, in October 2005, Innovation Norway Beijing Office established Norwegian Environment and Energy Consortium (NEEC) to group Norway-based multinational and SMEs companies to jointly develop the Chinese market. In June 2006, NEEC organized a match-making conference in Beijing focusing on new energy and environment. This event has created many business links between Norwegian and Chinese companies. It also branded Norway as an important green supplier in China.

Renewable energy development and targets in China
• In 2005, China invested $7billion in renewable energy. Investment in large hydropower in China was additional $10 billion in 2005.
• Rooftop solar collectors provide hot water to nearly 45 million households worldwide. 63.1% of total existing solar hot water/heating capacity (88 GWth) is in China.
• China renewable energy targets: 10% of electric power capacity by 2010 (expected 60 GW); 10% of primary energy by 2010 and 16% of primary energy by 2020 (incl. large hydro). 10% of electricity from renewable by 2010; 20% by 2020.
o Hydro: 180GW by 2010; 300 GW by 2020
o Wind: 5GW by 2010; 30 GW by 2020 (2GW by 2006)
o Biomass power: 5.5 GW by 2010; 30 GW by 2020
o Solar PV: 0.3GW by 2010; 1.8 GW by 2020
o Biomass pellets: 1 million tons by 2010; 50 million tons by 2020
o Biogas and biomass gasification: 19 million m3/year by 2010; 44 million m3/year by 2020

Market potentials for Norwegian companies are based in R&D, capital investing, technology/know-how transferring and training. Renewable energy market is in rapid development in China. China is willing to cooperate with international partners instead of giving away its market. Norwegian companies needs to cooperate with each other and with their Chinese partners. In this way, more and more Norwegian companies will succeed in China’s renewable energy market.

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