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6 White Paper on the Business Environment in China
energy projects in the next 15 years,” and that it expects merger The May 12, 2008 earthquake in Sichuan, however, high-
and acquisition activity in the field to show continuing growth12 lighted concerns about the stability of hydroelectric infrastruc-
ture. Minister of Water Resources Chen Lei announced two
Development of nuclear power is expected to proceed but days following the disaster that some 391 dams were believed
is unlikely to outstrip other sources in the clean energy mix. to be badly damaged—but even before the earthquake raised
Whereas in 2009 a State Nuclear Power Technology Corp doubts about the structural integrity of the more than 87,000
(CNPTC) analyst told China Daily that nuclear power genera- dams in China, Deputy Minister of Water Resources Jiao Yong
tion then accounted for less than 2 percent of the nation’s over- went on record saying that “roughly 37,000 dams across the
all capacity13, a reported government investment of 600 billion country are in a dangerous state.”21
yuan over 10 years14 may help to increase nuclear generation’s
role in satiating China’s increasing energy demands. Despite these concerns, plans exist to expand installed hy-
dropower capacity by an additional 140 million kilowatts by
By January 2011, there were 15 nuclear power reactors across 2015 and 450 million kilowatts by 2030.22
four sites in the PRC, and 26 additional reactors under construc-
tion;15 although historically nuclear sites have been built in coastal Work on these plans has already begun; Dezan Shira reports
regions, new plants are also planned for inland areas.16 that “Between the second half of 2010 and the first quarter of
2011, 10 new major hydropower stations were approved, with
According to Li Junfeng, Deputy Director-General of the 50 gigawatts of total installed capacity and investments of more
NDRC’s Energy Research Institute, “The move to further than RMB200 billion,” and that likely areas for foreign invest-
develop nuclear power is integral for China to achieve its goals ment include hydropower equipment manufacture, operational
in emission control”17 support services and technology upgrades.12
“Building more nuclear power stations is essential to China’s As of late 2013, “hydropower capacity [was] targeted to
endeavor to cope with energy shortage and pollution,” agreed grow about 6 percent a year to reach 290 gigawatts by 2015.”11
deputy director of the Science and Technology Committee of
the China National Nuclear Corporation (CNNC) Ye Qizhen: Solar power joins hydroelectric in being a “green” source of
“China’s installed capacity of nuclear power is expected to reach power generation, and there has been emphasis on developing
70 million kW by 2020, 200 million kilowatts by 2030 and 400 solar power with similar enthusiasm. A China Daily report in
million kW by 2050, [… which means that] nuclear power will December 2009 trumpeted the “official statistics” showing that
account for 7 percent of China’s overall power capacity in 2020, China consumes more hydroelectric- and solar-generated elec-
15 percent in 2030 and 22 percent in 2050.”18 The target for tricity than any other nation, although the report did not pro-
generation set in the 12th Five-Year Plan is to reach a capacity vide a reference to the statistics themselves and does not discuss
of 40 million kW.16 per-capita consumption.20 A Xinhua article from two months
prior reported that “more than 6,000 tonnes of polycrystalline
Externalities may play a long-lasting role in the development silicon (a key material in producing solar power) and 2 million
of the sector. “In the aftermath of the 2011 Fukushima nuclear kw of solar photovoltaic cells” were produced in 2008.23
crisis in Japan, Beijing cut its 2020 nuclear power capacity tar-
get to 58 gigawatt (GW) from 80-90 GW,” reports Reuters.19 The Wall Street Journal cites an estimate that the PRC will
account for 13 percent of global demand for solar generation
Problematically, “aggressive expansion of nuclear power is equipment by 2015, up from a current 7 percent in 2011.24
running into a major stumbling block—a breakdown of trust,
post-Fukushima, in official assurances of public safety.” In July A goal of 20 gigawatts of installed solar capacity by 2020
of 2013, for example, “a $6 billion uranium processing plant in had been published in mid-2010;25 meanwhile, the 2015 target
the southern province of Guangdong was canceled [after] about is 10 gigawatts.12 Reuters reports that by the end of 2010 there
a thousand people took to the streets demanding the project existed 900 megawatts of capacity in the country.26
was scrapped over public health and environmental fears.”19
To encourage the construction of more solar power plants,
“Industry insiders blamed the cancellation of the project on the PRC government initiated a program called the “Golden
poor communication and a lack of public education. They say if Sun” subsidy, which was announced in 2009 and includes a 50
things do not improve more protests could spring up elsewhere, percent subsidy of all grid-connected sola investments and 70
threatening those plans to build new reactors.”19 percent of off-grid photovoltaic investments.12 The nation re-
portedly hopes to surpass Germany as the world’s largest solar
Hydropower, a strong contributor to China’s power produc- energy market by 2013.27
tion, especially in central and western provinces, was attributed
approximately 7.8 percent of the national installed capacity in Inefficient transmission is said to be the biggest challenge
2008, up from one percent in 1949.20 to fully exploiting the benefits of “green” power generation,
however20 one project to address this concern is the State Grid
In 2010, the PRC owned the world’s largest installed hydro- Corporation of China’s plan to build a network of ultra-high-
power capacity (213 gigawatts), the majority of which is located voltage (UHV) transmission lines by 2020.28 The first part of
in southern and western provinces.12
130
energy projects in the next 15 years,” and that it expects merger The May 12, 2008 earthquake in Sichuan, however, high-
and acquisition activity in the field to show continuing growth12 lighted concerns about the stability of hydroelectric infrastruc-
ture. Minister of Water Resources Chen Lei announced two
Development of nuclear power is expected to proceed but days following the disaster that some 391 dams were believed
is unlikely to outstrip other sources in the clean energy mix. to be badly damaged—but even before the earthquake raised
Whereas in 2009 a State Nuclear Power Technology Corp doubts about the structural integrity of the more than 87,000
(CNPTC) analyst told China Daily that nuclear power genera- dams in China, Deputy Minister of Water Resources Jiao Yong
tion then accounted for less than 2 percent of the nation’s over- went on record saying that “roughly 37,000 dams across the
all capacity13, a reported government investment of 600 billion country are in a dangerous state.”21
yuan over 10 years14 may help to increase nuclear generation’s
role in satiating China’s increasing energy demands. Despite these concerns, plans exist to expand installed hy-
dropower capacity by an additional 140 million kilowatts by
By January 2011, there were 15 nuclear power reactors across 2015 and 450 million kilowatts by 2030.22
four sites in the PRC, and 26 additional reactors under construc-
tion;15 although historically nuclear sites have been built in coastal Work on these plans has already begun; Dezan Shira reports
regions, new plants are also planned for inland areas.16 that “Between the second half of 2010 and the first quarter of
2011, 10 new major hydropower stations were approved, with
According to Li Junfeng, Deputy Director-General of the 50 gigawatts of total installed capacity and investments of more
NDRC’s Energy Research Institute, “The move to further than RMB200 billion,” and that likely areas for foreign invest-
develop nuclear power is integral for China to achieve its goals ment include hydropower equipment manufacture, operational
in emission control”17 support services and technology upgrades.12
“Building more nuclear power stations is essential to China’s As of late 2013, “hydropower capacity [was] targeted to
endeavor to cope with energy shortage and pollution,” agreed grow about 6 percent a year to reach 290 gigawatts by 2015.”11
deputy director of the Science and Technology Committee of
the China National Nuclear Corporation (CNNC) Ye Qizhen: Solar power joins hydroelectric in being a “green” source of
“China’s installed capacity of nuclear power is expected to reach power generation, and there has been emphasis on developing
70 million kW by 2020, 200 million kilowatts by 2030 and 400 solar power with similar enthusiasm. A China Daily report in
million kW by 2050, [… which means that] nuclear power will December 2009 trumpeted the “official statistics” showing that
account for 7 percent of China’s overall power capacity in 2020, China consumes more hydroelectric- and solar-generated elec-
15 percent in 2030 and 22 percent in 2050.”18 The target for tricity than any other nation, although the report did not pro-
generation set in the 12th Five-Year Plan is to reach a capacity vide a reference to the statistics themselves and does not discuss
of 40 million kW.16 per-capita consumption.20 A Xinhua article from two months
prior reported that “more than 6,000 tonnes of polycrystalline
Externalities may play a long-lasting role in the development silicon (a key material in producing solar power) and 2 million
of the sector. “In the aftermath of the 2011 Fukushima nuclear kw of solar photovoltaic cells” were produced in 2008.23
crisis in Japan, Beijing cut its 2020 nuclear power capacity tar-
get to 58 gigawatt (GW) from 80-90 GW,” reports Reuters.19 The Wall Street Journal cites an estimate that the PRC will
account for 13 percent of global demand for solar generation
Problematically, “aggressive expansion of nuclear power is equipment by 2015, up from a current 7 percent in 2011.24
running into a major stumbling block—a breakdown of trust,
post-Fukushima, in official assurances of public safety.” In July A goal of 20 gigawatts of installed solar capacity by 2020
of 2013, for example, “a $6 billion uranium processing plant in had been published in mid-2010;25 meanwhile, the 2015 target
the southern province of Guangdong was canceled [after] about is 10 gigawatts.12 Reuters reports that by the end of 2010 there
a thousand people took to the streets demanding the project existed 900 megawatts of capacity in the country.26
was scrapped over public health and environmental fears.”19
To encourage the construction of more solar power plants,
“Industry insiders blamed the cancellation of the project on the PRC government initiated a program called the “Golden
poor communication and a lack of public education. They say if Sun” subsidy, which was announced in 2009 and includes a 50
things do not improve more protests could spring up elsewhere, percent subsidy of all grid-connected sola investments and 70
threatening those plans to build new reactors.”19 percent of off-grid photovoltaic investments.12 The nation re-
portedly hopes to surpass Germany as the world’s largest solar
Hydropower, a strong contributor to China’s power produc- energy market by 2013.27
tion, especially in central and western provinces, was attributed
approximately 7.8 percent of the national installed capacity in Inefficient transmission is said to be the biggest challenge
2008, up from one percent in 1949.20 to fully exploiting the benefits of “green” power generation,
however20 one project to address this concern is the State Grid
In 2010, the PRC owned the world’s largest installed hydro- Corporation of China’s plan to build a network of ultra-high-
power capacity (213 gigawatts), the majority of which is located voltage (UHV) transmission lines by 2020.28 The first part of
in southern and western provinces.12
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