China’s renewables target to cost $60 billion

Foreign investment levels in doubt

A 10% target for renewable energy’s contribution to Chinese installed capacity is reportedly expected to cost of the order of $80 -$90 billion by 2010.

According to industry analysts, while the new renewable law passed last week is expected to encourage foreign investment in China, interest is likely to remain limited. Leading renewable energy technologies are coming from Europe and the US but foreign investment is mostly focused on coal and hydroelectric technology currently. Furthermore, Chinese grid companies still tightly control prices making it difficult for renewable generators to achieve sufficiently attractive prices.

At least a third of the 60 GW renewables target is expected to be achieved through wind capacity at a cost of some $11.5 billion. However, at the end of 2004 China’s wind power capacity stood at just 764 MW, compared with 567 MW in 2003.