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China dominates the green economy
Posted By Brandon Reid On August 31, 2011 @ 7:00 am In Renewable Energy | 1 Comment
By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association
Worldwatch report 185 focused on the green economy and green jobs in China. It addressed greening activities in energy, transportation and forestry. China has established a long-term green vision, and is likely to meet or exceed its goals.
The report points out that, in 2008, China became the world’s largest PV manufacturer with about 700 PV companies. By 2010, China had four of the top 10 solar PV cell manufacturers in the world. Employment in China increased from 13,800 workers in 2005 to 83,000 workers in 2007.
PV manufacturing increased a thousand-fold in China from 1990 through 2007, while installed capacity in the country only increased 39 times from a very small base.
With little local demand for PV equipment, China’s expanded manufacturing was targeted at the export market, creating a global glut in the PV marketplace.
The glut is undermining U.S. investments made in manufacturing facilities in the United States. In Massachusetts, Evergreen Solar, once the third-largest maker of solar panels in the United States, benefited from a $43 million incentive from the state government. Last January, it announced it would close its Massachusetts factory, laying off 800 workers and shift production to a joint venture with a Chinese company in central China.
According to Keith Bradsher in an article in The New York Times, the Evergreen CEO indicated Chinese state-owned banks and municipal governments provide large subsidies to their manufacturers, which preclude U.S. firms from building facilities in the U.S. Evergreen borrowed two-thirds of the cost of its new plant in China. No principal and interest payments are due until 2015. In Massachusetts, a state grant only covered 5 percent of the cost of the firm’s manufacturing plant. The remaining funds were sought from private United States banks, which were reluctant to provide the funds, even at interest rates more than double that to be paid in China.
Investment banker Henry C. K. Liu indicates that this form of unregulated global trade is pre-empting economic growth in market economies around the world. He sees it leading to long-term stagnation in domestic economies as wages paid by international capital are insufficient to support consumer demand.
With economic stagnation in the United States, demand for electricity has not kept up with the increased potential for electrical supply. Low natural gas prices stimulate private electrical production for internal use, undercutting demand for traditional utility power.
David Guitiani, of Sauk Valley Media, reports that three potential regional providers of electricity are unable to find buyers for their power. The three projects on hold include a biomass plant, a wind farm and the long-idled Invenergy facility in Nelson.
Given current economic conditions, downsizing the solar farm in Rockford to 3 MW from the original concept of 60 MW is not surprising. The size can be expanded as increased demand warrants. The continued support of the project by Winnebago County Board Chairman Scott Christiansen (R) is well timed. Secure, environmentally-friendly, long-term energy supplies at predictable prices contribute to a healthy business climate.
Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail firstname.lastname@example.org .
From the Aug. 31-Sept. 6, 2011, issue
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