China speeds up along the path of green tech

As the world's second-largest energy user, China will have to play a big role in cutting greenhouse gas emissions. Fortunately it is facing up to the problem.

Going green: a solar panel on top of a Beijing subway station information pillar indicates China's willingness to embrace alternative energy.

DALIAN // It would be easy to view the electric vehicles used to take delegates to the World Economic Forum in Dalian, China earlier this month as a gimmick. A sceptic might see the deployment of hybrid buses and plug-in cars as a cynical attempt to portray the country as a green pioneer even as it gorges on cheap coal, grabs resources across Africa and rebuts limits on greenhouse gas emissions. But the truth is that China is probably moving faster than any other major economy to tackle the combined problems of energy scarcity, atmospheric pollution and climate change.

The buses ferrying the forum's influential participants were actually the first of 1,500 such vehicles to be deployed across Dalian, one of 13 cities participating in a pilot electric car programme. The programme is just a small piece of a broad-based government strategy of investments and subsidies to promote low-carbon growth in the world's most populous nation, which is firing up two new coal power stations every week to keep up with its energy needs.

The government is driven not only by a necessity born of rising pollution and fuel import costs, but an increasingly compelling commercial imperative to seek a breakthrough in energy technology. The China Greentech Initiative, a partnership of domestic and foreign companies and government agencies, estimates that the total market size for green solutions could amount to as much as US$1 trillion (Dh3.67tn) in four years.

"China is positioned as a leading player in green technology," said Richard Gledhill, an analyst with PricewaterhouseCoopers, the consultancy firm which led the report. "The country has the potential to get a jump on its global competitors, with an early transition to a lower carbon economy and more sustainable long-term growth." Beijing has committed to obtaining 20 per cent of its power from renewables by 2020, against a 7 per cent target in the Emirates. The economic downturn, which coincided with a global push for new energy technology, has served only to increase the money and incentives available to green technology. About 37 per cent of China's 4 trillion yuan (Dh2.15tn) stimulus plan is allocated to green technology, the Greentech Initiative estimates.

China's centralised system of government means that policies to promote green technology are quickly implemented across a market of 1.3 billion people. The impulse towards cleaner power is driven by a sharp rise in energy needs. For two decades, Chinese energy use rose by 6 per cent annually, but it accelerated to 10 per cent every year from 2000. This meant energy demand doubled in just six years until 2006, making China the second-largest energy consumer in the world, after the US. It is expected to surpass the US in six years. By 2030, China will consume a quarter of all energy worldwide.

The hunger for power has caused greenhouse gas emissions to skyrocket. China became the world's largest emitter of greenhouse gases in 2006, long before many forecasters had expected. Because of its huge population, per capita emissions are still low compared with the developed world. But the nation now accounts for one fifth of all global emissions, making it a hugely important player in any agreement to tackle global warming. About 70 per cent of China's energy comes from coal, and its generation capacity is growing by the equivalent of two 500 megawatt power stations every week. Coal produces twice the carbon dioxide of natural gas and one third more than oil.

Many developed nations have faced similar challenges, but several factors set China's situation apart. First, China's rate of growth is unparalleled for any large nation, the country having compressed centuries of development into a single generation. Second, much of its growth focuses on heavy industry, which requires intensive use of power, unlike other economies which have relied on less power-hungry services.

Finally, China's growth has come at a time when resources are much more scarce than ever before, and when the effects of global warming are being felt. China is still in the early stages of an economic take-off. It has only four vehicles for every 100 people against 80 vehicles for every 100 people in the US. Its fleet of 50 million cars today is expected to reach 300 million in the next two decades.

"For China to continue its rapid economic expansion, it cannot afford to maintain the status quo," the China Greentech Initiative said in a report. With a raft of new subsidies for solar and wind power and aggressive targets for electric vehicles, China is now applying its considerable capacity for innovation to the problem. In Dalian, delegates to the forum were escorted on a visit to the Sunrise Power Company, which is experimenting with hydrogen fuel cells. These engines create energy by catalysis instead of combustion, leaving only water as waste. Scientists at Sunrise treated delegates to a ride on an experimental fuel cell scooter. Steady and silent, it was a beautiful demonstration of the potential of the technology.

Hydrogen cells may not turn out to be the silver bullet that ends the petroleum era - a hydrogen fuel cell car still costs $1.5 million to produce - but it served as a notice that China is investing heavily in such a transformation. Electric cars, meanwhile, are already rolling off China's formidable production lines. For now, Chinese car makers are focusing almost exclusively on the growing domestic market for such cars. Shanghai, for example, plans to have 5 per cent of all vehicles powered by electric motors in just two years. By 2011, 5 per cent of cars made in China will be electric powered. One Chinese car maker, BYD Auto, has already launched the first mass-produced plug-in hybrid and three other local car makers have also announced plans to enter the market.

No doubt they will be well positioned to take advantage of a global boom in electric car sales when it materialises. In China itself, people have already proved receptive to battery-powered transport, with 65 million electric scooters in use - more than the number of passenger cars - and another 22 million made every year. In July this year, the government announced a national feed-in tariff for wind power, giving it a significant premium over coal-generated power. China now boasts the fourth-largest wind generation capacity in the world, having doubled every year for the past four years. Growth has exceeded expectations, reaching the official 2010 target of 5 gigawatts, set in 2005, three years early.

Solar power has been only minimally exploited domestically so far, but this has not stopped China becoming the largest producer of photovoltaic panels, accounting for 30 per cent of all panels worldwide. In July, the government also announced a big new subsidy for solar power, targeting 20gw of domestic generation by 2020. In Bao Ding, a city near Beijing which is home to one of the country's biggest wind turbine blade factories, 20 per cent of all signal lamps are already solar powered and panels are now being rolled out to all street lamps in the city.

Chinese families are no strangers to the technology, with one in 10 families already using solar power to heat domestic water, creating a market for 125 million square metres of solar panels. [e-mail]