Setting the Stage: Worldwatch Highlights Renewables in Haiti

This week, Xing Fu-Bertaux and Matthew Lucky of Worldwatch’s Climate and Energy team are meeting with senior policymakers and educators in Port-au-Prince at a high-level workshop on Haiti’s energy future. They will be writing an in-depth post about the conference for ReVolt next week. As part of our ongoing work in the Caribbean, Worldwatch is currently focusing on the electricity sector in Haiti and the development of a low-carbon growth strategy.

Haiti has a population of nearly 10 million with a significantly underdeveloped energy infrastructure. Over 70 percent of Haiti’s people have gone without access to the electricity grid for years. The 2010 earthquake further exacerbated Haiti’s infrastructure challenges, leaving over 80 percent of the population without access to electricity and the many vital services that require power. For those Haitians that do have electricity access, service is often intermittent and unreliable.

Presidential Advisor on Energy, Dr. René Jean-Jumeau addresses energy leaders in Port-au-Prince.

Haiti’s current predicament has received ample media exposure since the earthquake. Although international aid and emergency relief programs are providing invaluable support, they are only part of the answer. Haitian leaders are searching for long-term solutions that promote sustainability, growth, and access to electricity. The Haitian Parliament’s recent approval of Garry Conille, President Martelly’s appointment for Prime Minister, has provided a measure of direction for the public sector in pursuit of its development and reconstruction goals. In anticipation of this new government, energy professionals are eager to set Haiti on a sustainable growth trajectory. Earlier this week, Worldwatch researchers Xing Fu-Bertaux and Matthew Lucky joined decision makers from all over the country for a special two-day workshop in Port-au-Prince organized by Dr. René Jean-Jumeau, Presidential Advisor for Energy, to discuss ways in which they can work together to promote the Haitian energy sector. Energy policy, procurement, rural electrification, and sustainability received particular emphasis at the workshop.

As in many island nations, Haitian electricity consumers suffer from the high costs associated with a long-standing reliance on imported oil for generation. These high costs, as well as a lack of access to the grid, are major impediments to economic growth and the social wellbeing of Haitian communities.  Haiti currently imports costly fossil fuels to generate roughly 65 percent of the country’s electricity.  The cost of imported oil leaves Electricité d’Haiti’s (EDH), Haiti’s state-owned utility, with little resources to invest in infrastructure. Confronting these challenges will require a synthesis of various policy approaches, including regulatory development that enables concentrated investments in sustainable energy. The recent $35 million Inter-American Development Bank (IDB) grant for Haitian electricity infrastructure has come at an ideal time for the country to implement the systemic changes needed to improve the electricity sector. With funds delegated for both policy reforms and capacity building, this grant offers the Haitian government a prime opportunity to execute a holistic approach to developing and incorporating renewable energy. In particular, solar and wind-based generation used in micro-grid applications and distributed generation can offer solutions to Haiti’s grid insufficiency.

Several months ago, the Climate and Energy team began investigating the Haitian energy sector and the unique challenges Haiti faces as a developing island country. While attending the workshop, Xing and Matthew were invited to present our work on renewable energy as a supply option for Haiti’s energy sector. Haiti’s 2007-2017 Energy Sector Development Plan outlines a lack of data on solar potential as a barrier to solar energy development. With the support of our recently completed 3TIER renewable energy resource assessments, Xing and Matthew provided the needed solar data and laid out the many ways in which solar and other renewable energy opportunities can benefit the Haitian electricity sector, as well as the additional policies and financial mechanisms needed to realize that promise.

Worldwatch is committed to partnering with the Haitian people to maximize the country’s renewable energy potential. While Haiti’s lack of electricity infrastructure poses very real challenges for development, it can also been seen as an opportunity for the country to leapfrog more developed economies and invest in a sustainable and efficient electricity infrastructure. Wind potential near Lake Azuei and widely available solar irradiance are just two examples of how Haiti’s natural endowments allow for renewable energy to play a much larger role in the overall energy mix. However, none of these resources will be harnessed without a clear energy policy and strong engagement of the government. In his closing remarks to workshop participants, Dr. Jean-Jumeau, quoting Xing Fu-Bertaux, reiterated that “policy drives investment.” Moving forward from this successful workshop, Worldwatch will continue working with leaders in Haiti to develop policies and public incentives that attract investment and enable the country to take advantage of its renewable energy potential.


 

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Earth Sangha announces “Rising Forests Coffee”

By Isaac Hopkins

After nearly three years of planning, the Virginia-based Earth Sangha has launched a new line of shade-grown coffee, called “Rising Forests Coffee,” from the Dominican Republic, on the Caribbean island of Hispaniola. The coffee comes from the Dominican province of Dajabón, which lies along the border with Haiti. According to Chris Bright, the Sangha’s President, the coffee project is part of the Earth Sangha’s Tree Bank / Hispaniola program, which is devoted to improving the incomes of small-holder farmers along the border, and restoring native forest on portions of their lands. “We want to put more money in our farmers’ pockets,” said Bright. “We also want to give them a stronger economic rationale for conserving and restoring forest. Coffee can help do both of those things.”

Endangered mahogany seedlings at the Earth Sangha's Tree Bank reforestation nursery, along the Dominican Republic – Haiti border. (Photo credit: Earth Sangha)

The Earth Sangha is a non-profit charity committed to a Buddhist ethic of caring for the environment and helping people. Founded in 1997, the organization has built a large native-plant nursery in the Washington, D.C. area, where more than 200 species of native plants are grown for ecological restoration projects. All of the nursery’s stock is “local ecotype”—grown from locally-collected, wild seed.

The Earth Sangha founded the Tree Bank in 2006. The project is a partnership with a local agroforestry association, and includes a community tree nursery, a farm micro-credit program, and the beginnings of a conservation easement system. “We offer our farmers very low-cost credit,” explained Bright. “In exchange, they have to set up forest easements on their lands. The credit is tied to the forest, and farmers can get more credit if they restore forest. It’s another way of making the forest valuable.” About 25 farms are currently participating but Bright expects membership to grow.

The coffee program has a similar goal. The coffee is shade-grown, so it’s another way of making native forest canopy pay for itself. The program buys only top-quality “Gold Selection” beans, and it guarantees farmers a price that is at least 10 percent higher than whatever the current Gold Selection price is. All profits are returned to the region, to support the Tree Bank program. According to Bright, “there are two keys to this system. One is the focus on Gold Selection, which allows us to create a specialty brand that will bring in more money. The other is the direct connection to the farmers. That’s very efficient. There are fewer people to pay, so we can pay our farmers more.”

“Rising Forests Coffee” can be purchased from the Earth Sangha’s website, earthsangha.org.

Isaac Hopkins is a research intern with the Nourishing the Planet project.

To purchase State of the World 2011: Innovations that Nourish the Planet please click HERE. And to watch the one minute book trailer, click HERE.

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De Schutter calls for local agroecology and accountability in food systems

By Isaac Hopkins

The Johns Hopkins Center for a Livable Future hosted the UN Special Rapporteur on the Right to Food, Professor Olivier de Schutter.

Olivier de Schutter has been the UN Special Rapporteur on the Right to Food since 2008 (Photo Credit: Penn State University)

De Schutter linked our current food system problems to the “green revolution” of the 1960’s, during which the focus of agriculture in countries like Mexico, China, and India was on sheer production and providing inexpensive food for urban areas. This had a catastrophic impact on the viability of small-holder farmers, dietary diversity, and the environmental conditions of the land. During the 1980s, governments began to pull away from agriculture, investing in industry, and leaving small-scale farmers to cope with market problems on their own.

Developing countries in particular are now suffering under a “triple burden,” says De Schutter, of under-fed people—malnourished people who get enough, but empty, calories; and over-fed individuals who suffer from weight-related diseases, such as diabetes and cardio-vascular disease. In Mexico, for example, 18 percent of people are food insecure and 70 percent of adults are overweight. De Schutter says that “we have no food crisis. We have a poverty crisis, we have an environmental crisis, and we have a nutrition crisis.”

De Schutter proposed a three-fold solution to these problems, calling for a reinvigoration of localized food systems to augment the global food system, a greater emphasis on agroecology, including agroforestry, and independent accountability that holds governments to specific objectives and strategies. He cautioned that as more countries progress through the “nutrition transition”—toward processed, cheap food and away from traditional diets and lifestyle—it will become increasingly difficult to reverse the process, but that we have the means to do so now.

When it comes to shaping our food system so that it is environmentally and socially sustainable, De Schutter says that we should embrace each step of the transition, rather than focusing only on the lofty final goal of universal access to high quality food. “It’s not,” he says, “about architecture; it’s about music, where every note counts.”

What do you think? How can we ensure that people have access to healthy and nutritious food? Tell us in the comments section!

Isaac Hopkins is a research intern with the Nourishing the Planet project.

To read more about food security, see: Ensuring Nutrition and Food Security in South Asia, World Health Organization launches new tool to help combat malnutrition, UN warns of 750,000 deaths in drought-affected Horn of Africa, and IFPRI Millions Fed Technical Compendium.

To purchase State of the World 2011: Innovations that Nourish the Planet please click HERE. And to watch the one minute book trailer, click HERE.

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A Bold Call To Action: The Dominican Republic’s Climate-Compatible Development Plan

On January 14th, at the National Palace in Santo Domingo, the National Council for Climate Change and Clean Development Mechanism of the Dominican Republic (CNCCMDL) released its long-awaited DR ClimateCompatibleDevPlan-Sep-2011 (CCDP). The plan outlines policies the Dominican Republic can enact to achieve great economic growth as well as substantive reductions in greenhouse gas emissions between now and 2030. The project was started after the 16th Conference of the Parties (COP 16) in Cancun, Mexico in 2010 and has moved forward with support from the International Climate Initiative (ICI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Coalition for Rainforest Nations (CfRN) and the McKinsey Company.

The Dominican Republic's Climate-Compatible Development Plan

The development plan is an important document that allows the government to set the tone regarding the future of sustainability in the Dominican Republic. The CCDP details the emissions reductions that can be made in four areas of the economy by pursuing low-emissions strategies rather than a business as usual (BAU) scenario through 2030. Its long time horizon and its intent to achieve strong economic growth while simultaneously curbing emissions make it an ambitious plan that other island countries in the Caribbean can emulate. But it won’t be easy. The development plan states that success will require successful coordination of five key factors: commitments and leadership, stakeholder engagement and mobilization, effective institutions and systems, comprehensive strengthening of government capacity, and smart financing.

The CNCCMDL took pains to ensure that the development plan avoided partiality toward any one sector or political group. In order to be comprehensive and maintain the current momentum of the renewable energy sector, the council sought input from the country’s government, private sector, local and international NGOs and academia. According to Zugeilly Coss, a member of the CNCCMDL who worked closely on this project, “This plan addresses both practical and political elements with a serious perspective of sustainable development.

The Climate-Compatible Development Plan is a clear signal from the government of the Dominican Republic that sustainability will not be an afterthought but a significant principle of the country’s future planning. The CCDP follows the lead set by the Dominican Republic’s new constitution, which is considered the first constitution to clearly state that adaptation and mitigation, with respect to climate change, are the responsibility of both government and the citizenry. Furthermore, the CCDP is exactly the kind of clear government signal that Worldwatch’s Low-Carbon Roadmap calls for in the Dominican Republic. In particular, our Roadmap advocates for “loud, long and legal” policy frameworks to ensure progress in creating a sustainable energy future. The CCDP meets all three criteria, proposing to simultaneously halve emissions while doubling GDP over the next two decades through an established law that will shape the Dominican Republic’s energy landscape.

The CCDP is also a very specific and targeted plan. It calculates that if the Dominican Republic’s economic growth were to continue its BAU path, greenhouse gas emissions would increase 40 percent from the current level of 36 megatons of carbon dioxide equivalent (MtCO2e), to more than 50 MtCO2e by 2030, equivalent to 4.3 tons of CO2e per capita by 2030. The CCDP identifies four parts of the economy that would be responsible for 70 percent of all emissions under the BAU scenario and therefore offer the greatest potential for abatement: energy, transport, forestry, and “quick wins,” a category including cement, waste and tourism.

The plan outlines abatement “levers” that can be employed to bring about significant reductions in these four sectors. In the energy sector, gains would come largely from energy efficiency measures, a larger reliance on natural gas instead of oil, and a larger presence of renewable energy. In fact, the plan projects that emissions could drop from 19 to 7 MtCO2e by 2030 if the plan’s recommendations are fully implemented. In the transportation sector, abatement options such as vehicle efficiency standards, biofuels and a modern public transportation system in the capital of Santo Domingo could result in a drop from 8 to approximately 6 MtCO2e by 2030 and a reduction of oil consumption by up to 9 million barrels of oil equivalent (mBOE) per year. In the forestry sector, the CCDP estimates that current emission levels are around 2 MtCO2e. BAU growth will see that number increase to 3 MtCO2e by 2030. However, should the Dominican Republic pursue abatement steps such as reducing deforestation and forest fires and encouraging afforestation and reforestation, emissions could drop to 1 MtCO2e. Furthermore, the report projects that the Dominican Republic could become a net carbon sink by 2030, sequestering almost 6 MtCO2e. Lastly, in the category of “quick wins,” the development plan predicts that a focus on energy efficiency in tourism, using more biofuels as a power source for the cement industry, and trapping methane gas from landfills while also increasing recycling by 50 percent can result in net emissions of 6 MtCO2e as opposed to BAU levels of 9.5 MtCO2e  by 2030.

The CCDP is a bold and important plan. Given its level of detail, it is also highly analytical and thorough. In the case of the Dominican Republic, and by extension other small islands developing states (SIDS), it is exactly the kind of signal the government should be sending to show a commitment to developing a sustainable energy future.

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Citywatch: The Taste of Cohesion

By Wayne Roberts

Citywatch: Whether it’s action or traction in the food world, cities are stepping up to the plate. The world is fast going urban, as are challenges of social, economic and environmental well-being. Citywatch is crucial to Worldwatch. Wayne Roberts, retired manager of the world-renowned Toronto Food Policy Council, has his eye out for the future of food in the city. 

My first memory is of Riverdale Park near downtown Toronto. My grandpa spent the day with me there on September 26 many years ago, while my parents were at the hospital bringing my new baby sister into the world.

Photo credit: www.wayneroberts.ca

Though the park was only a block away from our apartment, it was a big outing for me—a special treat that told me I was still special and that there was still more than enough love to go around for me, and plenty of people and places to share it.  I was only four years old, but how can anyone forget a whole day with a grandpa in a lovely little corner park that was part zoo and part farm, and had all sorts of animals to pet and snuggle up to. A kid’s version of a place of one’s own, evocative hideaway central to what Gary Paul Nabhan calls The Geography of Childhood.

I wonder if that glistening memory of special people and places that were there for me on a big day prepared me many decades later to hear a new word that may well freshen up our understanding of cities in this century – not just as centers of crowds, excitement, entertainment, or business opportunity, but centers of cohesion, perhaps environmental as well as social cohesion.

Food planning can play a lead role in ensuring that food provides what’s needed to stick to the ribs of city cohesion. The historic neighborhood surrounding Riverdale Park is known as Cabbagetown, a reminder that locals once used their backyards to grow their own food, and the park has blossomed into a food-centered place where organic farmers markets and open air baking ovens match the century-old farm theme. It’s become what planners call “a third place,” the runner up just behind home and workplace where people like to “hang” during some free time – a concept I usually explain as being something like the old hit TV series, Cheers.

Riverdale Park, along with a wide range of similarly-inspired places throughout the city, are high on the public mind these days because a new civic administration aims to cut the city budget down to size by chopping services  that are “nice to have,” but not “need to have.”  Defenders of these social services, mindful of Toronto’s reputation as “the city that works” — also the most multicultural city in the world, a transformation that has been managed without any bitter or polarizing clashes – have pinpointed cohesion as the invisible but “need to have” force that makes the city work.

Back in July, when the City Executive held its first all-nighter pajama party for hundreds of citizens who deputed against budget cuts, FoodShare head Debbie Field tossed off a line at 1:30 in the morning. One of a city’s core responsibilities is to maintain social cohesion, said Field, executive director of the largest citywide food security organization in North America.

I jotted her phrase down in my “mull it over” file, and it came rushing back to me a few weeks later when the ghettoes of southern England broke out in riot. Stores were looted for bling that is normally only accessible to people who believe they’ve earned their money the hard way, through real estate and stock market speculation. Suddenly the whole world saw the reality TV version of what happens to people who are deprived of many things, among them cohesion.

It suddenly became clear that cohesion is a lot more effective, safe and economical than the sheer force of law.  Cohesion has what might be called a “social system value” that adds a layer of worth to what economists are increasingly calling “ecosystem values.”

Champions of neighborhood parks and planted boulevards argue effectively that the “urban forest” has an invisible “ecosystem value” that more than pays for any costs through savings on home energy bills, because trees cool a street in summertime and absorb chilling winds in winter, thereby saving heating and cooling bills for nearby homes. Likewise, the sense of place, belonging, sharing and connection learned in neighborhood parks more than pays for any costs by savings on expenses of dealing with social breakdown.

My guess is that cohesion will become one of the watchwords of 21st century city planning. Now that most humans are urbanized, the very density of daily life means that good and bad “contagions” – from exciting new niche markets and social trends to worrisome bedbugs, germs and demoralization — travel very quickly, easily bypassing the flimsy barriers of gated communities based on racial and income exclusion.

I’m thinking of cohesion as the social force akin to “core strength” in the body —which protects the nervous system and spine while various limbs are stretched and extended beyond their comfort level.

Like the force behind gravity, cohesion is invisible, but unlike gravity it pulls up, down and sideways toward the centre —the countervailing and balancing force to all the centripetal pressures from pursuing individual, sectoral and class interests. It may be that cohesion is the social and cultural force that counters the effect of entropy, allowing human societies to move human energy toward organization, rather than giving in to disorganization — as heat, light and other forms of energy do when they inevitably lose force.  Hot baths eventually become cold, as do hot fires, but hot ideas and trends, not to mention the positive magnetic energy of certain people, can gather force as they go.

Food has always been the tie that binds and makes for human cohesion, since the days when humans hunted and gathered and shared whatever was caught and found, gathering around a fire to eat together and tell stories.

Cohesive forces used to operate for minimal cost in olden days when cities were smaller, more homogeneous and less complex. In those times, the pillars of cohesion were informal and formal institutions, such as family, neighborhood, church and workplace – all more fixed than anything that exists today.

Cities face a fiscal crisis because they’ve been left to pick up the costs of cohesion that were once performed informally and for free.

In today’s world, food projects remain the most economical and effective ways for cities to produce cohesion services. Community gardens, school gardens, and farmers markets are among the best community-building and capacity building sources around. My own favorite is the baking oven in neighborhood parks — what gathering in kitchens is to house parties, and what the barbeque is to extended family get-togethers, the baking oven is to hanging out in neighborhood parks.

The baking oven is one of the centerpieces of Riverdale Park, perhaps helping some young child and grandpa today see how the glow of an oven can shed light on the true richness of life.

To purchase State of the World 2011: Innovations that Nourish the Planet please click HERE. And to watch the one minute book trailer, click HERE.

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Nourishing the Planet TV: Fighting Global Malnutrition Locally

In this week’s episode, research intern Joseph Zaleski discusses the benefits of fighting malnutrition locally through the use of Ready to Use Therapeutic Foods (RUTFs).

Video: http://youtu.be/b6UWlDnXITE

To read more about RUTFs, see: Fighting Global Malnutrition Locally.

To purchase your own copy of State of the World 2011: Innovations that Nourish the Planet, please click HERE. And to watch the one minute book trailer, click HERE.

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Trouble on the Land

Tonight, check out this broadcast of “Dan Rather Reports”, where they travel to Tanzania to investigate the issue of land grabs.

Photo credit: HDNet

With global population set to rise to 9 billion by mid-century and an estimated 90 percent of the world’s arable land already being cultivated, scientists worry that we could be on the brink of a global food crisis. And with the land going for pennies on the dollar, big U.S. investors have started putting money into agriculture in Africa. But, they are not just buying commodities or stock – investors are buying the farmland directly.

These investments have posed the underlying question: Will these massive farms help feed the continent or are they just “land grabs”?

The broadcast will be at 8 PM on HDNet. Click here for more information on the program.

What do you think? Are large-scale land investments a problem or a solution to food insecurity in Africa?

To purchase your own copy of State of the World 2011: Innovations that Nourish the Planet, please click HERE. And to watch the one minute book trailer, click HERE.

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Ensuring Nutrition and Food Security in South Asia

By Supriya Kumar

At a recent World Bank event in Washington, D.C., policymakers and other stakeholders met to discuss the food challenges facing the South Asian region. There are 336 million people chronically hungry and 46 percent of children under the age of five suffer from malnutrition, much higher than sub-Saharan Africa’s 26 percent.

At this recent World Bank event, participants urged the need for food security to be top priority for South Asia. (Photo credit: Supriya Kumar)

According to World Bank Chief Economist for South Asia, Kalpana Kochhar , more than one-third of all child deaths in the region are due to malnutrition, mostly because malnutrition increases the likelihood of dying from other diseases. Economically, micronutrient deficiencies are estimated to put a strain on many South Asian countries—annually, Afghanistan is estimated to lose $235 million, Pakistan is estimated to lose $3 billion, and India is estimated to lose a whopping $12 billion in GDP.

But this was not a discussion focused solely on the problems. Also in attendance was Santiago Levy, Vice President for Sectors and Knowledge in the Inter-American Development Bank, who discussed the successes of a government-led program called Programa de Educación, Salud y Alimentación (PROGRESA), which was aimed to address poverty and food insecurity in Mexico. After Mexico’s economic downturn in the mid 1990s, when 30 percent of Mexicans were suffering from extreme poverty, Mexico’s finance ministers established the program as a means of addressing the problem. Through conditional cash transfer programs, where families received money if they fulfilled certain requirements – children attended sufficient amount of classes, women made sufficient number of trips to clinics, and other criteria – Mexico was able to reduce the number of people suffering from malnutrition.

Levy pointed out that because of the program food consumption rates had increased by 72 percent, calorie intake had increased by almost 8 percent, and infant mortality rates had significantly declined. The program also has a high rate of return – it relies on only 5 percent of the country’s GDP to function, but serves 20 percent of the country’s households.

Mehmood Khan, the CEO of Pepsico‘s Global Nutrition Group stated that because 95 percent of the world’s population purchases food from the private sector, it was important that business and corporations were also included in the conversation on food insecurity. With such a wide reach, they provide a great outlet for people around the world to access nutritious food, and there are already some examples of success. Under the direction of Khan, Pepsico conducted a pilot project in India, where they released an energy drink aimed to combat iron deficiency in young women. This product has already produced some promising results – 96 percent of the children introduced to the product are now aware about iron deficiency and ways that they can address it.

Notably missing from the meeting were finance and economic ministers of these South Asian countries who would play paramount roles in implementing any federal programs to address nutrition. But as malnutrition continues to hurt these growing economies (see GDP losses above), all the participants who attended hope and expect food security to become a central issue in South Asian government policy.

What do you think? How can we get countries to prioritize food security issues?

Supriya Kumar is a research fellow with Nourishing the Planet.

To purchase your own copy of State of the World 2011: Innovations that Nourish the Planet, please click HERE. And to watch the one minute book trailer, click HERE.

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Will China’s First Nationwide Feed-in-Tariff Become the Backbone of its Solar Industry?

Solar Panels installed on the roof of the 2010 World Expo Theme Pavilion in Shanghai

By Qiong Xie

China’s energy regulator, the National Development and Reform Commission (NDRC), announced its first nationwide feed-in-tariff (FiT) for solar photovoltaic (PV) installation projects on July 24th, 2011, in an effort that it would boost its domestic solar industry and increase the share of solar power in China’s energy portfolio. The unveiling of the feed-in-tariff policy has shed light on China’s goal to achieve 50 gigawatt (GW) of solar installation by 2020.

Before the first nationwide FiT for solar PV projects was announced this past July, the Chinese government had sponsored two rounds of public tender since 2009. The first public tender in 2009 ended with a single solar project: a 10 megawatt (MW) installed capacity solar power plant in Dun Huang, Gansu province. The Dun Huang tender provides the solar developers with a payment of RMB1.09 (RMB is the abbreviation of Chinese currency, RMB1.09 is equal to approximately US $0.170, including tax) per kilowatt-hour (kWh) for their solar power feed into the grid. Besides, China initiated its second round of public tender for concession solar power projects in 2010. At the end of this tender, 13 projects were announced with a total installed solar power capacity of 280 MW. To be more specific, it is reported that the winning bids ranged from RMB 0.728 per kWh (approximately $ 0.114, including tax) to RMB 0.991 (approximately $0.155, including tax). But the bid price was much lower than some of the solar industry participants expected as RMB 1.1 (approximately $ 0.172, including tax) thus it discouraged energy power companies and private solar equipment suppliers’ investment enthusiasm.

The proponents argue that the new FiT is expected to incentivize the healthy development of China’s solar power industry. According to the new scheme, A FiT of RMB 1.15 (approximately $0.179, including tax) per kWh would be applied to projects approved for construction by NDRC prior to July 1st, 2011. In addition, projects that have finished construction and are in the process of commencing generation prior to Dec 31st, 2011 would also be eligible for the FiT of RMB1.15.

The NDRC also has another category of FiT of RMB 1.0 (approximately US $0.156, including tax) per kWh for solar projects approved for construction by NRDC after July 1st, 2011. The FiT of RMB 1.0 will be given to projects approved for construction prior to July 1st, 2011, but that are unable to produce electricity by Dec 31st, 2011. However, exceptions have been given to projects located in Tibet, saying even if those projects that are approved for construction by NDRC prior to July 1st, 2011 cannot generate electricity by Dec 31st, 2011, they will still receive a FiT of RMB1.15.

China’s solar industry has experienced tremendous growth over the past decade. Detailed in a Worldwatch report, China has rich solar resources across most of its territory. According to a United Nations Environment Program’s (UNEP) global horizontal solar radiation study, the annual solar radiation for most regions of China is between 4.5 and 5.0 kWh per square meter per day (kWh/m2/day). In some of the western parts of China, such as the Qinghai, Yunnan and Tibet provinces, solar radiation reaches between 6.5 and 7.0 kWh/m2/ day, which are similar to the radiation rates seen in Phoenix, Arizona. Generally, the more intense solar radiation is, the more directly it strikes the solar panel, thus, the more electricity is generates. The Chinese government realizes that in order to fulfill its goal of generating 15 percent of its energy capacity from wind, solar and other non-fossil resources by 2020 while producing affordable electricity for residential, industrial and commercial customers, it needs to shift its attention to solar power development, especially given the fact that China has abundant solar resources.

According to National Renewable Energy Laboratory data, 3 percent of Chinese households, comprised of about 30 million people, do not have access to electricity. Additionally, most of these people live in the remote and rural areas of western China. In order to address this urgent problem, the Chinese government initiated the Township Electrification Program, implemented between 2002 and 2004.  As a result of this government initiative, 721 small-scale solar PV power stations have become operational in 1,065 villages and towns in 12 provinces that lacked access to electricity and the total installed solar PV capacity was 20 MW in June 2003. And because most of these small-scale solar power stations are not connected to the national grid, they do not require huge investments in grid construction. Thus, this program has been successful in China’s less developed western provinces, such as Xinjiang, Qinghai and Inner Mongolia.

The Township Electrification Program has stimulated China’s solar photovoltaic (PV) development and push solar developers to move toward large-scale on grid solar projects. According to Worldwatch Institute data, the solar PV industry has boomed, with solar cell production growing from less than 100 MW in 2005 to 2.6 GW in 2008, a 20-fold increase in just four years. Meanwhile, the Worldwatch Institute data indicates that even though China has become the largest solar PV producer in the world, it exports 98 percent of its solar PV products. So in order to grow the domestic solar PV market, China has increased its 2015 goal for installed solar PV power to 10 GW in its 12th Five-Year-Plan (2011-2015). To be more specific, China’s total installed solar PV capacity increased from only 19 MW in 2000 to 150MW in 2008. It then grew from 310 MW in 2009 to 893MW in 2010, and many optimists believe the first nationwide feed-in-tariff will ramp up the growth of China’s solar PV industry.

Whether the first national FiT will become the backbone of China’s solar industry is still unclear. But there is no doubt that the FiT policy will encourage solar developers to keep investing in western provinces which have rich solar resources, such as Xinjiang, Gansu, and Qinhai, but those locations are often far away from the eastern coastal cities  where the electricity is needed the most. So how to connect solar power from western China to the national grid might present a major challenge to solar developers. However, the FiT policy could offset the impact of the shrinking global solar PV market caused by the financial crisis, as Chinese domestic solar PV manufacturing companies may shift slightly from overseas markets to the domestic market to sustain profits. For instance, Yingli Green Energy, one of China’s solar giants, aims to sell one-fifth of its solar PV production in China this year, compared to fewer than 10 percent in 2010.

Nevertheless, as observed in a previous posting, the Chinese government needs to have robust policies to balance the relationship between its largest power companies (China’s top 5 power companies: China Huaneng Group, China Guodian Corp, China Datang Corp, China Huadian Group and China Power Investment Corp) and the monopolized grid sector. There is no doubt that the grid sector requires extensive market reform in the near future to attract more private capital investment into grid infrastructure. Otherwise, the solar market might get stuck with grid connection just like the case of China’s wind power: for instance, many wind farms in Inner Mongolia cannot be connected to the grid, partially due to the lack of transmission lines. Consequently, it makes a big waste of resources and hurts the wind industry. Thus, the State Grid Corp of China has outlined its plans for smart grid development in correspond with the 12th Five-Year Plan. Hopefully, with the comprehensive smart grid system and cutting-edge technology, China’s solar PV industry will not follow its wind industry path.

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