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Tuesday, January 21, 2014

Chinese Solar Mission

Chinese strategy in solar PV focussed on utilisation, manufacture and research with a synergistic policy. Interesting from Indian perspective as tend to see as all three components as mutually exclusive. Excerpts from UNU-MERIT working paper'  Diverse and uneven pathways towards transition to low carbon development: The case of diffusion of solar PV technology in China, Michiko Iizuka, (wp2014-002).
  • China (as of 2012) has the largest capacity for renewable power generation in the world, followed by the USA and Germany, and is one of the five largest countries in the world in terms of capacity for producing the following types of renewable energy: bio‐power (3rd), hydropower (1st), solar PV (4th), wind power (1st), solar water collection (1st), geothermal (2nd) in 2012 (REN21, 2013). 
  • As for manufacturing capacity, several Chinese firms, such as Goldwind, Sinovel and Migyang for wind energy and Yingli Green Energy and Trina Solar – to name a few – for solar PV, are considered the dominant players in the global export market for both wind turbine and solar PV respectively. The growing presence of China in terms of capacity to generate and manufacture renewable energy is accompanied by a growing capacity to innovate as the result of conscious efforts made by both private and public sectors.
  • The growing manufacturing capacity demonstrated by China’s export performance was accompanied by increasing technological efforts. Both government and firms attempted to close the technological gap with OECD countries. The results of these efforts can be observed from the rapid increase of indigenous R&D. Between 1996 and 2008, central government R&D appropriation for renewable energy increased from RMB 21.1 billion (US$2.5 billion) to RMB104.8 billion (US$15.2 billion), while expenditure by regional governments for the same purpose increased from RMB 7.8 billion (US$940 million) to RMB 105.7 billion (US$15.4billion) (Cao and Groba, 2013). 
  •  Parallel to such technological efforts, Chinese firms relied on the acquisition of foreign technologies using turnkey cell and module production lines and capital goods from the late 1990s to the early 2000s (de la Tour et al., 2011). During this time, the manufacturing activities of Chinese solar PV firms were concentrated on ‘easy‐to‐enter’ but ‘low‐profit‐margin’ activities of cell and module production. Subsequently, these firms’ cumulative efforts at in‐house R&D were complemented by strategies of joint R&D with universities and research institutes, as well as setting up overseas R&D facilities with government inducements for acquiring technology. Such R&D focused on crystalline silicon, which was the dominant technology at that time. Although the strongest presence of Chinese firms is still in downstream activities, i.e. cell and module production, firms have also invested in upstream activities such as the processing of silicon feedstock.
  • India adopted early- to- start and fast- to -vacate policy in solar PV too, established CEL in 1974, supported research regularly with small grants to IITs and increased utilisation of PV with Solar Mission.
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