New Energy Industry Set to Become New Economic Growth Engine      

The new energy sector is leading a new wave of industrial revolution, boasting a huge potential market. China is accelerating its strategic transformation in its energy industry, according to a new energy sector report published by the State Information Center.
   As both the world's second-largest energy producer and consumer, China mainly relies on coal and other fossil fuels. Those energy sources, such as wind and solar power which represent future energy trend, still play a supplementary role in its energy mix at present.
   Fossil fuels, typically not renewable and causing pollution, have become a bottleneck for China's sustainable economic growth. Therefore, to adjust energy use structure, and develop more cleaner-burning new energy has become an inevitable choice to balance between energy, economy and the environment. The current relatively easing energy supply situation is providing a good opportunity to drive that strategic transformation for energy mix.
   China should improve its energy utilization efficiency, reduce reliance on fossil fuels, especially the imports of crude oil, while pay greater attention on the development of new energy and increase spending on the research and applications of related technologies for alternative energies, the report said.
   Hit by the subprime mortgage crisis, China's energy companies have suffered severe loss in the second half of 2008. However, the report pointed out that the global financial crisis also creates a favorable condition for China to bring in advance energy technologies and equipment, and the sluggish domestic economy could also allow the government to advance its energy pricing reform. Also, the blind expansion in conventional energy sectors could also slow down given falling profit margins, and this would help push on industry consolidation and upgrade. All that said, the obstacles in front of energy mix adjustment have been largely removed.
   The domestic energy policy change will mainly be reflected by the adjustment in power structure, the report said. The country must develop the nuclear power with great exertion, and advance the hydroelectric sector actively. It must also quicken the pace in phasing out outdated coal-fired power generating capacity and accelerate construction of new and clean energy projects, including wind and solar power as well as power-heat co-generation plants, it said.
   As an emerging industry with strategic importance, the new energy sector is expected to become China's new economic growth driver in the future. China will push forward the wider applications of such new energies by supportive policies. The governmental attention will help lead to a substantial adjustment in China's energy mix.
   The Chinese government is working on a new energy development blueprint, which will attach strategic importance to the sector by boosting spending in technologies and facilities. The plan would involve the development targets and tasks for the new energy industry in the next three years (2009-2011). Total investment in renewable energy could exceed RMB3 trillion if China wants to achieve its earlier set 2020 target for renewable sources.
   The new energy rejuvenation plan would focus on nuclear, wind and solar energy. By 2020, China's operating installed nuclear capacity is set to reach 80 million kilowatts.
   The development of wind power is aiming to make the segment competitive in the market as soon as possible. According to state plan, China will build ten million kilowatt-level windmill farm bases, which are to be located in Gansu, Inner Mongolia, Hebei, Jiangsu, and northeastern China by 2020, with total installed capacity of 150 million kilowatts.
   And solar power capacity is set to reach 300 000 kilowatts by 2010 and 1.8 million kilowatts by 2020 in China. Independent and household-based solar stations will be built in remote regions, while grid-integrated solar power generation will be used in relatively wealthy areas. Also, large-scale solar power generation stations will be built in areas with plentiful sunshine.