Li Hejun: China as a model renewable energy economy
Li Hejun: China as a model renewable energy economy
The Financial Times published an article under the byline of Li Hejun, Chairman and CEO of Hanergy Holding Group.
Almost 200 governments met in Peru this month to hammer out a first draft of a global deal to cut emissions, ahead of a new round of climate talks next year in Paris. If the world is to arrest climate change, global economies need to embrace renewable energy. Those looking for a model of how this might be done should consider a possibly surprising source: China.
It has been little noticed by the outside world, but in China a technological revolution that will result in huge gains in efficiency and new applications for renewable energy has already begun.
Many in the West are sceptical of China’s commitment to renewable energy. This scepticism has been especially evident following the recent agreement by China and the United States to address climate change. As part of this agreement, the United States has promised that by 2025 its emissions will be at least 26 per cent lower than they were two decades earlier. Meanwhile, China has pledged to boost its share of renewable energy from the current 8 per cent to 20 per cent by 2030 in order to allow emissions to peak that same year. The agreement has been dismissed by critics as a “non-binding charade”. They point to the fact that China builds a new coal-fired power station every 10 days.
It is true that meeting China’s renewable-energy goals will not be easy. Over the next 15 years, the International Renewable Energy Association predicts that China will have to invest $145bn in zero-emissions energy each year to add the 800-1,000 GW of new generating capacity needed to meet its targets. That is nearly equivalent to all of its current coal-fired capacity and almost as much as total installed capacity in the US energy sector today.
But China’s renewable energy goals are not simply hot
air. The country’s leadership recognises that China must break its dependency
on coal if it is to satisfy the surging power demands of a growing middle class
and an expanding economy without blanketing the country in smog. China’s
renewable energy goals are also necessary for the country’s long-term energy
security. Neither coal, shale gas nor any other fossil fuel can secure our energy
future.
The sceptics have also missed the fact that China’s 2030 goals do not mark a radical departure from existing policy, but build on existing foundations. In 2013, China was the world’s top investor in renewable energy. It also leads the world in hydropower capacity, wind power capacity, and in 2013 it surpassed Germany to lead the world in new solar power installations.
The new goals will trigger a huge investment push towards renewables. The scale of the new generating capacity to be installed in the next decade will reshape China’s renewable energy market, weeding out weak companies as the government gradually phases out subsidies, and driving gains in efficiency and technological innovation as the remaining industry players compete for market share.
I believe that solar will be at the forefront of this technological advance. Solar energy is fast becoming more affordable. The cost for solar power generation is now 50 per cent lower than it was three years ago. China’s cost of solar power generation has fallen to below Rmb1 per kWh and if we continue that trend, I predict that within 3-5 years the generation cost of solar cells will approach that of coal-fired power.
Even more exciting than falling costs are the new ways in which China will use and transmit power. China is now intent on developing a distributed power grid that will rely on the interconnection of thousands of rooftop and building-integrated solar installations generating power close to the point of consumption. This is a drastic departure from the current centralised power system that relies on goliath, coal-burning power plants and costly, inefficient power transmission over hundreds, or even thousands of kilometres. This new, smart grid will help eliminate pollution, slash costs, and increase reliability.
In addition to making the distributed grid possible, new forms of solar technology are ushering in an era of mobile energy in which customers can take power with them wherever they go.
I believe that solar will be at the forefront of this technological advance. Solar energy is fast becoming more affordable. The cost for solar power generation is now 50 per cent lower than it was three years ago. China’s cost of solar power generation has fallen to below Rmb1 per kWh and if we continue that trend, I predict that within 3-5 years the generation cost of solar cells will approach that of coal-fired power.
At present, around 90 per cent of the world’s solar power output is geared towards first-generation crystalline silicon panels, which for a long time were the most efficient technology available. But traditional silicon panels are hard, opaque and heavy, while thin film solar technology can be can be lightweight, flexible, and translucent, making it ideal for a wide variety of applications, from curved automobile rooftops and building integration to consumer clothing and portable power stations.
In recent years, thin-film technology has caught up with, and even surpassed, crystalline silicon in terms of both conversion efficiency and cost. Furthermore, producing thin-film cells requires just a fraction of the material and energy necessary to make crystalline silicon, conserving resources, cutting costs, and reducing pollution.
In the coming years, technologies will continue to improve, and prices will continue to fall. Two of the most promising technologies now are solar cells made from CIGS (Copper, Indium, Gallium, Selenide) and those from GaAs (Gallium-Arsenide), with maximum conversion efficiencies topping 20 percent, and 30 percent, respectively. As these are further developed and brought to market on a mass scale, solar panels will transform into something capable of being integrated into nearly every fabric, product, and structure at a reasonable cost.
I believe that China will be the country that leads this technological revolution because China now has not only the production capacity, but the capital, talent, and political support to make it happen.
Over the past two years, Hanergy has acquired US and German companies with cutting edge thin-film technology and is now exploring the best ways to bring it to scale. There are hurdles to overcome. Building a sustainable production capacity will take a substantial upfront investment in core resources and manufacturing equipment but the investment will pay off. At Hanergy, American, European and Chinese scientists are working together to find imaginative ways to integrate and optimise solar technology from around the globe.
Every important industrial revolution has actually been an energy revolution or an energy substitution, first with coal for wood, then oil for coal, and now clean energy for traditional fossil fuels. This third revolution is not a competition for resources, but a race to master core technologies. I think that China will lead the world to a brighter, cleaner future.
Li Hejun is Director of the China New Energy Chamber of Commerce, and CEO of multinational clean energy company Hanergy Holding Group.
About Hanergy Thin Film
Hanergy Thin Film is the world’s leading thin-film solar technology enterprise. It is mainly engaged in the research and development and design of large-scale thin-film solar turnkey production lines, as well as the development and operation of downstream solar power projects and application products. On November 27, 2013, Hanergy Thin Film was included in Morgan Stanley Capital International (MSCI) China Index. The Company is the No.1 solar thin film turnkey line provider in the world by scale and by profitability, having delivered about 2,000MW production lines. In 2013, the Company recorded a net profit of HKD2.06 billion, enjoying a remarkable growth of 57.2% year-on-year. Hanergy Solar places technology advancement as its top priority and is equipped with strong R&D; capabilities, with a focus in advanced thin-film technology applied in flexible substrates. Hanergy Thin Film’s CIGS solar cells have reached a conversion efficiency of 20.5% under the guidance of a world-class thin-film solar energy expert team. In February 2014, Hanergy Thin Film acquired 100% interest of Hanergy UK and currently sells “Hanergy” branded thin-film solar photovoltaic equipment through IKEA UK directly. In May 2014, Hanergy Thin Film formed a strategic partnership with Tesla, a US electric vehicle maker, for the construction of PV Supercharger stations in China.
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