China is full steam ahead on renewable energy

China’s spending to develop renewable energy may total 1.8 trillion yuan ($294 billion) in the five years through 2015 as part of the nation’s efforts to counter climate change, according to a government official.

China may invest an additional 2.3 trillion yuan in key energy-saving and emission-reducing projects, Xie Zhenhua, vice chairman of the National Development and Reform Commission, said yesterday at a conference in Beijing. China stands by its pledge to cut carbon emissions per unit of economic output by as much as 45 percent of 2005 levels by 2020, he said.

The increased reliance on renewable sources of energy fits with efforts by China, the world’s biggest carbon emitter, to help mitigate the effects of pollution blanketing its major cities. Along with renewables investments, the environment ministry is considering stricter controls on vehicle and industry pollution.

The government aims to have 100 gigawatts of wind-power installed capacity and more than 35 gigawatts of solar power by 2015, Xie reiterated today. China’s targets have encouraged companies including China Petrochemical Corp., also known as Sinopec Group, to strengthen their commitment to protect the environment.

Sinopec on Monday said it will invest 22.9 billion yuan on an environmental protection plan.

China asked seven cities and provinces last year to put in place regional caps and pilot programs for trading emission rights.

The country will gradually expand the regions falling under its carbon trading pilot program starting from 2015 in order to explore the potential for a national system, Xie said.

Meanwhile Europe’s decision to curb imports of Chinese solar panels threatens to limit the biggest projects using the technology in the 28-nation bloc while having little impact on the manufacturers accused of dumping their products.

The agreement to set a minimum price of 56 euro cents ($0.74) a watt for panels until the end of 2015, reached this weekend, will hurt developers of ground-mounted plants and reduce installations, said Bloomberg New Energy Finance, IHS Inc. and the U.K. Solar Trade Association. Developers were already buying Chinese panels cheaper, they said.

The EU Commission set preliminary tariffs on the 11 billion euros of imports on June 4, allowing time for a deal in its largest commercial dispute of this kind. The agreement will keep higher anti-dumping duties from starting Aug. 6, while preventing an escalation in the trade spat before a definitive decision on the case in December.

“The decision will clearly further reduce large ground installations,” said Stefan de Haan, a solar analyst for IHS in Munich. The floor proposed is “too high for ground projects,” which need to limit panel prices to about 50 cents a watt, he said. IHS estimates developers were paying 45 cents before the duties were announced.

Chinese companies such as Yingli Green Energy Holding Co., the biggest panel maker, have grabbed about 80 percent of the European solar panel market. Bloomberg