Energy Sector Trends in Diversification and Sectorificatio

Another trend experts predict is a move away from centralized plants to distributed generation systems because the shorter the transmission distance, the greater the efficiency. According to Steven Hauser, director of power systems programs at Pacific Northwest National Laboratory (PNNL), this will mean investments in an infrastructure that will "make the system smarter and more robust". Wind turbines can represent a large part of the generation capacity of this distributed energy system in the U.S., although at the present time, this is speculative.
 
GABRIEL - try to explain drivers unique to China, mention competitors in the market, and if you can, draw a picture of the flow of market players and how they influence each other, put unessential information in the appendix

China

In China, currently the second biggest global market for wind power, a number of Chinese companies already produce turbines.  A recent trend, however, has been for these Chinese companies to look to produce turbines under license in efforts to curb domestic R&D costs.  To promote the domestic turbine manufacturing sector, the Chinese government imposes local content requirements that call for at least 40% of all wind farms to be comprised of domestically produced components.  Coupled with an “already…thriving domestic industry of small wind turbine manufacturers,” China would be an ideal location to license the technology of the Wind Turbine Company.  Early adoption of this technology by the Chinese would give WTC immense credibility in the wind energy industry. 

According to the US National Renewable Energy Laboratory (NREL), China possesses “world-class wind resources.”  Indeed, NREL estimates that China has a wind energy potential of 3,226 GW with a “practical wind energy potential” of around 253 GW.  The country already had over 170,000 wind turbines installed, with most being small-scale installations, for a total generational capacity of around 345 mW (or roughly the same amount as a small gas or coal-fired plant) at the end of the year 2000.  China has formally recognized the need to develop their renewable energy resources, as evinced by the inclusion of renewable energy development and utilization strategies in the Tenth Five-Year Plan, which calls for “a nearly five-fold increase” in the Chinese wind power generational capacity by 2005 (to a total of 1.5 gigawatts).

Recent years have seen China rising as an economic power, and this has been complemented by dramatic increases in electricity use.  Energy consumption has been growing in China, a country traditionally reliant upon coal and hydropower for the vast majority of its power, at rates of around 10 percent annually.  This reliance has serious ongoing environmental, social, and economic effects that have, in recent years, been gaining a good deal of attention.  While natural gas has been considered as a replacement alternative, renewable energy sources are achieving notable growth and attention, a trend that appears likely to continue for the foreseeable future. 

Current Chinese policy encourages the use of “clean” and renewable energy resources.  This support has been enshrined in numerous documents, starting as early as the 1995 Electric Power Act, in which China emphasizes its desire to encourage and support “deployment of…wind…and other renewable energy resources,” and the Guidelines of the Ninth Five-Year Plan and 2010 Long-Term Objectives on Economic and Social Development in China, in which the government calls for emphasizing the importance of wind, among other renewable energy technologies, in adapting to local conditions and needs. 

China is presently the world’s “largest manufacturer of small turbines.”  Its power needs are divided into rural (isolated) and grid-connected users, providing a two main market segments for wind power generation.  To the present, wind power development in China has largely addressed the needs of the rural, isolated customers.  The US Department of Energy has surmised that Chinese development of “even one-half” of the estimated wind resources available would likely result in the generation of enough power to satisfy roughly one-fifth of China’s current demand, displacing at the same time an immense quantity of coal (approximately 125 million tons) and the negative emissions associated with coal (including approximately two million tons of sulfur dioxide and 65 million tons of carbon emissions).  

China has received assistance from numerous international entities for developing its renewable energy plans.  The US Department of Energy, NREL, and the EPA have undertaken fairly extensive studies of wind resources in China, and have determined some of the best wind resource locations.  They have determined both on-grid and off-grid potential applications, and are encouraging the growth of the Chinese power agency.  The US Department of Energy’s (DOE) Office of Technology Access (OTA) also attempts to assist China in the development of renewable energy technologies, specifically wind.  The OTA has held a number of workshops and has done a series of market assessments, as well as an assessment of the policy options in China and comparisons to US policy. 

With a US government push to help China develop its wind resources through the exchange of information, the training and demonstration of both technical and economic feasibility aspects of wind power generation, the market is open and awaiting a new technological focus.  The WTC could use its extant relationship with NREL to be an integral part of the US push to “enhance (wind’s) commercialization in China for the benefit of both countries.”  Already, NREL is training Chinese engineers, financiers, and policymakers in various aspects of the industry; should WTC be accepted as a promising, next-generation technology, myriad doors would be opened in the Chinese market.