Cross-posted from Americans for Energy Leadership
China is building an ambitious “Solar Valley City” as a new national center for manufacturing, research and development, education, and tourism around solar energy technologies. as part of the Chinese government and industry’s efforts to promote clean energy technology and grow the nation’s global market share (see video below beginning at 10 seconds).
Solar Valley City is located in Dezhou, Shandong Province, where I visited last month as part of a delegation from Stanford University, and it is unlike any city you’ve seen before. The city houses over 100 solar enterprises including major firms like Himin Solar Energy Group Ltd, the world’s largest manufacturing base of solar thermal products, and Ecco Solar Group. According to reports, around 800,000 people in Dezhou are employed in the solar industry, or one in three people of working age.
“China’s solar thermal industry and Himin’s complete industrial chain are examples for the rest of the world. That sounds brash, but it’s true,” said Himin’s CEO Huan Ming in 2009, now one of China’s richest men. Himin specializes in solar thermal technology, producing over twice the annual sales of all solar thermal systems in the United States, and it is quickly expanding into solar photovoltaics and other technologies.
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Last month, U.S. Senators Debbie Stabenow (D-MI), Michael Bennet (D-CO), and Robert Menendez (D-NJ), as well as Congressman Dave Camp (R-MI) introduced the Solar Manufacturing Jobs Creation Act, intended to boost the international competitiveness the U.S. solar manufacturing industry. After introducing the legislation, Senator Stabenow said it was necessary to “help us win the global race against China and other countries to produce solar technology in the clean energy economy.”
The bi-partisan legislation would extend the existing solar Investment Tax Credit (ITC), which offers a 30 percent tax credit for solar energy investment and deployment, to cover the construction of new solar manufacturing facilities as well. The ITC was recently given an eight-year extension in the Emergency Economic Stabilization Act (EESA) of 2008.
The new legislation would also give solar manufacturers access to the temporary cash grant program created by the American Recovery and Reinvestment Act (ARRA), which has successfully boosted the deployment of renewable technologies, primarily wind power.
The new U.S. legislation is the second in as many months that aims to support the domestic solar industry. In late October, the U.S. House of Representatives passed the Solar Technology Roadmap Act, which would require the U.S. Department of Energy to appoint a group of experts to create a long-term plan to guide solar energy R&D and the commercialization of next-generation solar technologies. While the bill only authorizes $2.25 billion for solar R&D over the next five years, it represents a sizable increase in funding and a move toward a more strategic and targeted approach to clean energy development.
If the U.S. is to regain its position as a global leader in clean energy technology, and solar in particular, much more targeted policy support is needed. Both the Solar Technology Roadmap Act and the Solar Manufacturing Jobs Creation Act are important first steps forward in developing a comprehensive clean energy economy strategy capable of revitalizing the U.S. economy and making the United States a world leader in clean energy technology once again.
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Speeches made today at the UN’s climate summit may have left much to be desired in the eyes of countries eagerly hoping for the U.S. and China to make specific commitments to emissions reductions in the run-up to climate negotiations in Copenhagen. Yet, willingness on the part of both nations to invest in clean energy technology may signify more direct action to mitigate climate change than any potentially empty emissions promises.
In his speech this morning, China’s President Hu Jintao did not agree to binding carbon emissions targets, however, according to the New York Times, he did outline a four step plan that includes reducing the carbon intensity of the economy to 2005 levels by 2020, boosting nuclear and renewables to account for 15% of China’s power, increasing forest cover, and furthering action to develop a green economy. According to the UN Climate Change Conference website, Hu promised to cooperate on climate change efforts so long as they aligned with China’s ambitious development goals:
“Climate change is an environment issue, but also, and more importantly, a development issue. We should and can only advance efforts to address climate change in the course of development…Out of a sense of responsibility to the world…China has taken and will continue to take determined and practical steps to tackle this challenge,”
While international leaders have put considerable effort into cajoling China, not to mention India, to accept binding emissions reductions targets by the time climate negotiations commence in Copenhagen this December, China’s planned stimulus investment of $440-$660 billion in clean energy over the next ten years is far more indicative of China’s willingness to mitigate climate change as it simultaneously grows its own economy. (more…)
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Posted in China, Clean Energy, Economy, Finance, tagged ACES, China, clean energy race, Clean Energy Technology, Public Investment, venture capital on September 15, 2009 |
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Clean energy technology hubs are rapidly developing all over the world, except in the United States. Business leaders who met at the Reuters Global Climate and Alternative Energy Summit acknowledged that massive government investment has created vibrant clean energy markets in countries around the world, but unfortunately the U.S. has not taken part in this trend. As The Business Insider reports, Google Green Energy Czar, Bill Weihl noted:
“Other countries, China being one of the major examples, are investing very heavily in this space across the whole innovation pipeline…from shower to power, from the idea in the shower to generating the power (in a) commercial scale enterprise.”
Just yesterday, the China Greentech Initiative released a report describing how large-scale government investment is driving a clean energy market that could be worth upwards of US$1 trillion annually.
While China is home to some of the fastest growing clean energy centers, particular in the solar industry, Denmark, Japan, South Korea, India, North Africa, Singapore, and Abu Dhabi are all directly investing in creating domestic clean energy hubs.
Executives in Silicon Valley, who have become accustomed to leadership in key technology industries like IT and semiconductors are starting to sense the shift in power. (more…)
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The China Greentech Initiative, a partnership of more than 80 largely Western companies and organizations, released a hefty report (registration required) projecting that China’s massive government investment in its “greentech” industry will drive follow-on private sector investment that could create a national market worth up to US$1 trillion annually.
According to the report:
“Chinese government policies are positive drivers for greentech market development and…stakeholders have clear opportunities to accelerate market development…”
The report evaluates the market potential of a variety of “green” technologies including renewable energy and low carbon transportation, which are expected to be two of the largest growth sectors.
Through strong policies and financial support, the Chinese government has been a major driver of China’s clean energy markets. In addition to numerous fiscal incentives and subsidies for clean energy, China’s economic stimulus plan allocated 37% of its US$586 billion ($4 trillion yuan) to “greentech” sectors. China is also planning a new stimulus to invest $440 to $660 billion over 10 years focusing specifically on renewable energy. (more…)
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A recent RAND Review provides a slew of recommendations to help China expand the Tianjin Binhai New Area (TBNA) and turn it into a driver of economic progress. As a result of an enormous stimulus package (second only to that of the U.S.) with significant allocations for “indigenous innovation” in science and technology, China may already be well on its way to taking those suggestions to heart, particularly in the clean energy sector.
Tianjin Binhai New Area (TBNA), located in China’s Bohai Rim region, has been a strong center for modern industry and manufacturing. But in 2006, the Chinese government mandated that TBNA become the next “regional engine for economic growth.” To that end, the area has been the beneficiary of significant government support aimed at making the area the country’s next “economic powerhouse” and orienting it towards leadership in providing solutions to national problems: among them, rising energy demand.
According to RAND:
The goal of TBNA is to present an alternative to the traditional industrial economy, offering China a model of sustainable development and eco-friendly industry. Innovation in science and technology lies at the core of this vision of economic and environmental development.
In the report, RAND offers TBNA guidance in its endeavor to meet China’s growing technology needs, both domestically and internationally, by recommending that it pursue seven emerging technologies including cheap solar energy and electric-hybrid vehicles. (more…)
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It’s strange to hear of “insourcing”–the transfer of manufacturing jobs into the United States instead of out–but that’s exactly what’s happening with Denmark’s wind giant Vestas, according to a New York Times article yesterday.
According to the report, a combination of global recession and domestic stimulus spending on clean energy is adding up to a boon for the American clean energy manufacturing industry.
In Europe, Vestas has seen several nations slow down their rates of added wind capacity, and flagging government support combined with financial difficulties has impeded the construction of new projects. By contrast, the United States built 8,500 megawatts of wind capacity in 2008 to Britain’s 500, and demand for turbine technology is high. So for opportunities in a more robust wind market, Vestas has begun to look across the Atlantic. (more…)
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To some, recent discussion of the “clean energy race” is just the latest iteration of flashy climate change rhetoric, refurbished and repackaged as a do-or-die clean technology race between the U.S. and Asia. Yet, as a New York Times piece entitled “China Racing Ahead of U.S. in the Drive to Go Solar,” testifies, the clean energy challenge is more than just verbal tap dancing, it’s a dynamic economic competition – and China is earning its racing stripes.
While the U.S. is still floundering with ad-hoc investments in clean energy, China has developed a straight-forward, no-nonsense approach to achieving its 2GW solar capacity target by 2011 and gaining leadership in the solar industry: build market share. With the help of serious government investment, China is on the path to achieving that goal. Chinese companies like, Suntech Power Holdings, have succeeded in driving solar panel price reductions over the last six months by selling panels on the U.S. market below the marginal cost. Furthermore, China is circumventing protectionist legislation by constructing assembly plants in the U.S.
According to Steven Chan, Suntech president for global sales and marketing, the first plant will be located in Phoenix, Arizona and will allow China to tap into the portion of the market that wants to “‘buy American’ and things like that.” The catch, however, is that even though the panels will be constructed in America, by Americans, the components will, of course, be made in China. (more…)
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