Western wind turbine manufacturers are unlikely to benefit from Chinese wind turbine contracts, according to Reuters. There are reports of complaints about “localisation” rules and a Chinese preference for turbines with capacity of 1GW and above that has the effect of favouring Chinese companies.

In an economic downturn protectionist sentiment tends to rise, and the renewable industry is no exception. There are reports of industry concern that Chinese manufacturers will take an ever bigger role in supplying renewable equipment for the west, too.

While investment in renewable energy suffered in some of the world’s wealthiest countries last year, it is thriving in the BRICs. China is becoming a big consumer of renewable energy: last year it added more solar capacity than any other country bar the US, and it has overtaken Japan as the biggest manufacturer of PV components. It is also reportedly introducing a preferential tariff for utilities for power that comes from utilities. But it is also pursuing rapid growth in manufacturing capacity of solar panels and wind turbine components.

A subsidy for solar manufacturing was announced in March, aimed at jobs growth. And it’s this sort of effort that could be the problem for all those green stimulus measures in developed countries, with their attached hopes of green jobs.

A New Energy Finance/UN Environment Programme report demonstrates how renewable energy investment in developing countries grew last year even while it fell in wealthier countries. Developed country investments fell by 1.7 per cent, which the report attributed to difficult credit environment, while it grew 27 per cent in developing countries, to account for nearly a third of global investments:

On a regional basis, investment in Europe in 2008 was $49.7 billion, a rise of 2%, and in North America was $30.1 billion, a fall of 8%.

China led new investment in Asia, with an 18% increase over 2007 to $15.6 billion, mostly in new wind projects, and some biomass plants.

Investment in India grew 12% to $4.1 billion in 2008. Brazil accounted for almost all renewable energy investment in Latin America in 2008, with ethanol receiving $10.8 billion, up 76% from 2007. Africa achieved a modest increase by comparison, with investments up 10% to approximately $1.1 billion.

What does this mean for the countries such as Germany, whose subsidies of photovoltaic solar cells were at least partly aimed at creating jobs?

“The whole world has to some extent been producing for the German market,” a senior German politician told the FT. “We’re concerned that the German electricity consumer is subsidising foreign production.”

The inevitable next step for the debate must surely be rankles over whether the manufacturing or the importing country bears the burden of the carbon emissions created in manufacturing renewable energy components…

Related story:

Foreigners swept aside as wind power blows through China (Reuters, 04/06/09)
Feeling the heat (FT, 03/06/09)
Determining who pays for carbon emissions (FT Energy Source, 19/03/09)

June 4, 2009 3:25pm in Corporate news, Renewables | Comment