Background Paper: Chinese Renewables Status Report October 2009 Background Paper: CHINESE RENEWABLES STATUS REPORT OCTOBER 2009 This report was commissioned by REN21 as a background paper to its policy report on Recommendations for Improving the Effectiveness of Renewable Energy Policies in China. The policy report can be download at www.ren21.net/news/news38.asp. 1 Background Paper: Chinese Renewables Status Report October 2009 ACKNOWLEDGEMENT This report was commissioned by REN21 and produced in collaboration with the Chinese Renewable Energy Industrial Association (CREIA) and technology experts from various Chinese research institutions and private sector. Financing was provided by the United States Department of States, Asia Pacific Partnership (APP) Programme. Lead Authors Junfeng Li and Lingjuan Ma (Chinese Renewable Energy Industry Association) Contributors Overview: Shannon Wang (REN21 Secretariat / UNEP) Wind technology: Wuming Yu (Xinjiang Wind Energy Liability Co., Ltd) Solar PV: Fang Lv (Beijing Jikedian Renewable Energy Development Centre) Solar Hot Water: Jinliang Yang (Beijing North Solar Technology Ltd. Co) Biomass Power Generation: Shipin Qin (National Development and Reform Commission, Energy Research Institute) Biogas: Xin Liu (Energy and Environmental Development Research Centre) Liquid Bioful: Mengjie Wang (Chinese Academy of Agricultural Engineering) Small Hydropower: Juandong Tong (International Centre on Small Hydro Power) 2 Background Paper: Chinese Renewables Status Report October 2009 TABLE OF CONTENT 1 GEOGRAPHIC, ECONOMIC AND DEMOGRAPHIC OVERVIEW .................................................. 5 1.1 Geography ................................................................................................................. 5 1.2 Economy .................................................................................................................... 5 1.3 Demography .............................................................................................................. 6 1.4 Climate Change, Development and Energy Security ................................................. 6 2 OVERVIEW OF THE ENERGY SECTOR ........................................................................................ 9 3 WIND POWER ......................................................................................................................... 10 3.1 Overview ................................................................................................................. 10 3.2 Analysis on Resources and Economic Potential ....................................................... 11 3.3 Development Status and Goals ............................................................................... 12 3.4 Policies, Standards and Local Regulations ............................................................... 13 3.5 Investment and Industry Trend ............................................................................... 16 3.6 Rural Electrification ................................................................................................. 17 3.7 R&D ......................................................................................................................... 18 3.8 Local Case Study: Development of Wind Power Industry in Inner Mongolia ......... 19 3.9 Existing Problems and Barriers for Wind Power Development ............................... 20 4 SOLAR SECTOR ........................................................................................................................ 22 4.1 Solar Water Heater .................................................................................................. 22 4.2 Solar PV ................................................................................................................... 35 5 BIOMASS POWER GENERATION ............................................................................................. 46 5.1 Introduction............................................................................................................. 46 5.2 Resources and Economic Potentials ........................................................................ 48 5.3 The 2007 New Installation and the Gap from 2010 Goals ...................................... 52 5.4 Current Policies and Regulations for Biomass Power .............................................. 52 5.5 Investment Status and Sector Development Trend ................................................. 53 5.6 The Impact of Biomass Power Generation on Farmers and Rural Area .................. 58 5.7 R&D ......................................................................................................................... 59 5.8 Recommendations .................................................................................................. 61 5.9 Best Case: National Bio Energy Co. Ltd. ................................................................... 63 5.10 Biomass Power Policies and Regulations ................................................................. 63 6 LIQUID BIOFUELS .................................................................................................................... 66 6.1 Introduction............................................................................................................. 66 6.2 The Basic Principle of Developing Liquid BIofuels ................................................... 67 6.3 Technological Support and Industry Operation ....................................................... 67 7 BIOGAS .................................................................................................................................... 68 7.1 Introduction............................................................................................................. 68 7.2 Resources / Economic Potential .............................................................................. 68 3 Background Paper: Chinese Renewables Status Report October 2009 7.3 Additional Installation Capacity in 2007 and 2008 and Gap from 2010 Goal.......... 70 7.4 Existing Policies, Measures and Local Regulations .................................................. 70 7.5 Investment Dynamics and Industrial Trend ............................................................. 73 7.6 R&D ......................................................................................................................... 75 7.7 Local Practice: Best Case in Hunan Province ........................................................... 76 8 SMALL HYDRO POWER ........................................................................................................... 76 8.1 Introduction............................................................................................................. 76 8.2 SHP Resources Distribution and Development ....................................................... 77 8.3 Recent SHP Development ........................................................................................ 79 8.4 Policies and Measures for Promoting SHP Development ........................................ 83 8.5 Suggestions to improve the SHP development ....................................................... 84 8.6 The Technical Development of SHP in China ........................................................... 87 8.7 Problems in Developing SHP ................................................................................... 91 8.8 SHP Experiences in China ........................................................................................ 92 9 CONCLUSIONS AND OUTLOOK ............................................................................................... 93 9.1 How Far is China from Its 2010 Renewable Goal .................................................... 93 9.2 Enhancing the Strategic Role of Renewable Energy in Mitigating Climate Change and Ensuring Energy Security .................................................................................................. 93 4 Background Paper: Chinese Renewables Status Report October 2009 1 Geographic, Economic and Demographic Overview 1.1 Geography China is located in East Asia and on the western shores of the Pacific Ocean. It has a land area of approx. 9.6 million sq km. The Northern part of the Chinese territory starts from the centre of Heilongjiang River, north of Mohe (latitude 53°30’ north) and ends in the south at Zengmu Reef, the southernmost tip of Nansha Islands (latitude 4° north), spanning over 49 degrees; it starts in the east from the confluence of the Heilongjiang and Wusuli rivers (longitude 135°05’ east) and ends in the west at the Pamirs (longitude 73°40’ east), spanning over 60 degrees. Both south-north and east-west spans are over 5,000 km. It has land borders 22,800 km long, and 18,000 km coast line with 4.73 million sq km seas. 1.2 Economy China has developed as planned and on a large scale, as a result China is among the countries with the greatest economic potential in the world. The livelihood of Chinese people has been improved and reached a well-off level in general. National Five Year Plans (FYPs) started since 1953 have been accomplished with impressive achievements and paved a sound way for the national economy growth. The reform and opening-up initiated since 1979 has strongly driven China’s economy that is kept steady even after 2000. Elementary socialist market economy mechanism has been established in China, and market has played a better role in resource allocation. The macroeconomic control system