Nation lifts target for renewable energy use
(Reuters)
Updated: 2005-11-07 15:50

BEIJING, Nov 7 (Reuters) - China on Monday raised its target for reliance on renewable energy but acknowledged that coal would remain its primary source for electricity for decades to come.

Renewable energy should account for 15 percent of the national energy supply by 2020, Vice Premier Zeng Peiyan said at an international conference on renewable energy in Beijing.

China had previously aimed to get 10 percent of its power from renewable sources by 2020, though the 15 percent figure had been mentioned as a possibility as Beijing has talked about getting away from polluting fossil fuels and soaring oil prices.

In February China's parliament passed a renewable energy law that will take effect in January and set tariffs in favour of non-fossil energy such as water, wind and solar power.

But Zeng said coal-based development would still be the main focus in China's power sector.

"At the same time, China will step up domestic oil and gas exploration and develop hydropower in an orderly way," he added.

China counts large hydropower plants as sources of renewable energy.

Abundant coal currently provides some 70 percent of electricity in China, the world's second-largest energy consumer and producer of greenhouse gases.

"Such a coal-based power structure will remain unchanged for a long time," said Zhou Dabing, president and chief executive of state electricity company China Guodian Corp., though he added China had only enough coal for another 100 years.

"The environmental situation is also very grim and emissions of carbon dioxide, sulphur dioxide and other greenhouse gases are very great," Zhou said.

Other officials stressed that the wide gap between the price of conventional power and green power would need to be closed before renewable electricity could become commonplace.

"Renewable energy is not so competitive on the market, in particular in developing countries," said Xu Dingning, head of the energy bureau at the powerful National Development and Reform Commission.

Last year Guangdong in far southern China became the first province to introduce fixed prices for wind energy.

The powerful National Development and Reform Commission has said that by 2010 wind power capacity could reach 6,000 megawatts of energy nationwide by 2010 -- about three times the output of a single large coal-fired power station.

Zhou called on local governments to implement pricing strategies to encourage use of renewable power and for more technologies to be produced on home ground.

"The high price at the beginning for research and development should be shouldered by society as as whole. Companies involved in research and development should be exempt from value-added tax," he said.

Guodian, one of China's "big five" generation groups, was ready to do its part by speeding up research and development of biomass and wind and solar energy, he added.