In China, Clean Energy Transition Brings Jobs and Lessons for the World

By Haibing Ma and Jiajing Bi

China is the World's No.1 wind power

As China accelerates its shift to a green economy, it is becoming a frontrunner in the clean energy field. In 2009, the country overtook the United States to become the global leader in clean energy investment, and in 2010 this Chinese investment reached US$54.4 billion, dwarfing the $34 billion from the U.S. With such impressive finance and investment, it’s no wonder that China’s clean energy sector has been growing so rapidly. By the end of 2010, China had installed a total of 44.7 gigawatts (GW) of wind capacity, surpassing the United States to become the world’s biggest wind power market. And China has been the world’s largest solar photovoltaic (PV) producer since 2008, with an annual production capacity of 20 GW at the end of 2010.

Chinese manufacturers of clean energy equipment account for more than half of the global supply. Even more impressive is the pace of growth in renewable energy: as recently as 2005, only about 1 GW of wind power capacity was installed across China, and solar cell production was less than 500 megawatts (MW).

China’s growing investment in clean energy reflects rising climate and energy concerns. With an average GDP growth rate of 10 percent for the past 30 years, China surpassed Japan during the second quarter of 2010 to become the world’s second largest economy. But Chinese greenhouse gas emissions have soared as well, and in 2006 China passed the United States to become the largest emitter of carbon dioxide.

Without major advances in decarbonizing its economy, China will account for an estimated 29 percent of global CO2 emissions by 2030. With as much as 80 percent of Chinese emissions coming from coal consumption, there is a urgent need to shift the country’s energy development to a low-carbon path.

According to the International Energy Agency (IEA), China may have passed the United States in 2009 to become the world’s biggest energy consumer. Although the Chinese government officially refutes the IEA claim, one Chinese energy expert estimates that the country will account for more than half of world energy consumption by 2020 if current coal-dependent patterns are sustained. So far, coal accounts for 70 percent of China’s total energy consumption., and it accounted for about 80 percent of the country’s power generation between 2002 and 2008.

Meanwhile, China boasts great renewable energy resources. The country’s land surface absorbs an estimated 1.7 trillion tons of coal equivalent (tce) of solar energy annually. According to the third National Wind Energy Resources Census, China’s total exploitable capacity for wind energy (both land-based and offshore) is around 700–1,200 GW. During the past few years, the country has begun taking advantage of its great renewables potential.

China is dedicated to decrease its reliance on coal

China’s fast-growing green energy development has generated positive social and economic influences, particular in the employment sphere. The country’s solar PV manufacturing industry employed some 83,000 people in 2007, more than double the 2006 level. Although China’s solar power sector has lagged behind manufacturing, Worldwatch estimates that solar generation created as many as 13,400 jobs during the 11th Five-Year Period (2006–10).

The outlook for wind power is even brighter, due to China’s rapid growth in both manufacturing and actual installations. A forthcoming Worldwatch report estimates that the country created some 50,000 wind turbine manufacturing jobs in 2010 alone, or more than 1.2 million such jobs between 2006 and 2010. China’s wind development over this period also may have created 61,000 to 81,400 new employment opportunities to operate the newly added wind capacity. By the end of 2010, an estimated 83,000 full-time employees were working in Chinese wind farms.

The Chinese government has given clear and consistent signals to enhance the nascent clean energy sector. The Renewable Energy Law of 1995 calls for 20 percent of the country’s electricity to come from renewable resources by 2020. China’s soon-to-be-released Development Plan for Emerging New Energy Industry indicates that as much as 5 trillion Yuan (US$770 billion) will be invested in new energy-related sectors between 2011 and 2020. Of this, some 1.5 trillion (US$79 billion) will be invested exclusively in wind power development.

The government has yet to confirm the 2020 goal for solar and wind power development, but according to the latest projection from the Chinese Renewable Energy Industries Association, China could achieve an total installed wind capacity of 230 GW by 2020. This means that within the next decade, the wind industry needs to install an additional 185.3 GW of generation capacity, which could create as many as 278,000 new jobs. To provide the generation equipment needed to achieve this 2020 goal, Worldwatch estimates that an average of 50,000 jobs would be created annually in China’s wind turbine manufacturing sector in the 2011–20 period.

But China’s clean energy development still faces challenges. A leading constraint, mentioned in a previous ReVolt blog, is the limited grid capacity. China’s solar PV manufacturing industry also faces tremendous uncertainties due to slow global market growth. Meanwhile, Chinese government officials and energy experts have raised concerns about the environmental pollution related to PV manufacturing, especially small-scale production.

Solar panels being installed at the site of World Expo 2010 in Shanghai

In 2009, China’s National Energy Administration announced a goal of 20 GW of installed solar PV generation capacity by 2020, but according to the newly released 12th Five-Year Plan, the goal for 2015 is only 5 GW, which makes the 2020 goal seem ambitious. In light of Japan’s nuclear crisis, it is rumored that Chinese government may double its 2015 solar energy goal to 10 GW but this has not been confirmed officially.

Despite the challenges and uncertainties, all signs indicate that China will continue its rapid growth in clean energy. Given its large land area, population, and economy, any substantial progress that China makes in pursuing greener development will necessarily push the world to a more sustainable future. And China’s experiences and lessons learned during this transition will be extremely valuable for other countries, particularly in the developing world.

This is the third in a series of blog posts that report on findings from a forthcoming Worldwatch Institute report on China’s green economy. Read the first blog on the forestry sector here and the second on the transportation sector here. Please stay tuned for the concluding post.

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