Can China Catch a Cool Breeze? (Page 3)

Research support for this article was provided by the Puffin Foundation Investigative Fund at The Nation Institute.

There are by one count about a dozen major wind turbine and generator manufacturers in China, two of which, Goldwind and Sinovel, are considered to be among the ten biggest in the world. Both are partly state-owned. In the case of Goldwind, the government owns 55 percent. Financing at every stage is marked by state subsidies and low-interest bank loans.

The strategic nature of energy, and perhaps the government's heavy involvement, gives the Chinese wind industry a surprisingly secretive, almost paranoid, culture. Touring wind turbine factories is nearly impossible, and even getting permission to visit wind farms is maddeningly difficult.

Another flow of subsidies comes from abroad through the Clean Development Mechanism (CDM) of the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The Kyoto Protocol famously set carbon reduction targets: most industrialized countries agreed to cut their greenhouse gas emissions 6 percent to 8 percent below 1990 levels by 2012. One of the ways rich economies can meet some of their reduction targets is by paying for green energy projects in poor economies. This North-to-South subsidy scheme is the CDM.

"In China about 100 percent of wind projects get CDM subsidies," says Joanna Lewis. With almost 300 CDM-registered projects, China accounts for about one-quarter of the program's total capacity, which transfers about $5 billion a year from wealthy industrialized economies to developing economies.

Critics of the Clean Development Mechanism charge that China likely would have developed many of these renewable energy projects even without the subsidy. But experts like Houser and Lewis say that CDM funding has been crucial to jump-starting Chinese wind power. They point to the fact that every major green energy project in China has involved such funding, and that without CDM money it is likely that other capital would be harder to raise.

China's fast-growing wind sector is not without serious problems. Most of the wind resources are in the north and northwest--places like the huge barren deserts of the Xinjiang Uyghur Autonomous Region. The steadily moving air of these far-off steppes needs to be harnessed, but most of the country's population and industrial base is concentrated in the east and southeast. And unfortunately, China's electrical grid is a mess: underdeveloped, overstressed and intentionally decentralized. In fact, China has a patchwork of regional grids that are not yet all connected. This means transmission and distribution--moving power from where it is generated to where it is needed--is inefficient and in some situations even impossible. (The United States faces similar problems: the need for new power lines and a badly fragmented system of ownership and jurisdictional management that makes large-scale, long-term planning difficult, expensive and plagued by litigation.)

In China two state companies own the electric arteries that connect the pieces. The larger of these is called, in the inimitably practical nomenclature of socialism, State Grid. Rebuilding and upgrading the grid has lagged far behind the country's runaway electricity demand and generation capacity. The weakness of the grid became painfully clear this past winter when heavy snows snapped crucial links and plunged much of the nation into freezing, chaotic darkness.

Yet China is stepping up to the challenge of fixing its rag-tag transmission network. State Grid has started building long, ultrahigh-voltage direct-current lines. By 2020 there should be fifteen of these massive corridors linking industrial and urban China to its various power sources.

"In the US one major transmission line could take ten years to build, between the financing and planning and legal challenges. But in a command economy like China, they'll do it very quickly," explains Houser.

China is also trying to ease demand. In 2006 it kicked off the world's most aggressive energy-efficiency program, and by 2010 China aims to cut its "energy intensity"--energy consumption per unit of GDP--by 20 percent. This would produce carbon dioxide emissions reduction almost five times greater than the entire European Union is committed to achieve under the Kyoto Protocol. Part of this program involves decommissioning hundreds of smaller, older coal-fired power plants.

Nonetheless, the story of China and climate change is pretty grim. The country is an economic, demographic and political giant that is in many ways falling forward. As long as it catches itself, this looks like progress, but as soon as it stumbles it faces a potentially catastrophic collapse.

The main problem is the dirty black rock. Coal provides about 80 percent of China's electricity, and the country is a net importer of it.

Two years ago, China was building two large coal-fired plants every week, a pace that has since slowed somewhat. One energy analyst explained it this way: "In a good year China adds as much coal-fired capacity as already exists in the whole of the UK. In a slow year they only add the equivalent of California's capacity." A recent Chinese government white paper acknowledged the crisis of climate change but also noted the limited possibilities for change: The "coal-dominated energy mix cannot be substantially changed in the near future, thus making the control of greenhouse gas emissions rather difficult."

The race to escape coal and to avert the worst impacts of carbon emissions is, as of now, feeble, even quixotic: renewable energy is simply not growing fast enough. "Beyond 2020 we could start to see a real paradigm shift; the energy mix could really move away from coal," says Houser, "but not before then." That, unfortunately, is not a time frame that will avert disaster--for China or the world.

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