Hearing a Voice at Beijing's 'Two Meetings'
Source:Chief Editor, CCEN   Date:2010-03-26   Author:Tom Pellman

It's no secret that China's annual "two meetings" of the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference is the government's big chance to show itself as a united whole. Even after five years in China, the sight of delegates sitting in uniform rows and voting unanimously is still jarring to this American, one who's used to the vitriol and polarization of American politics.

 

This year, the "two meetings" went off without a hitch – without any major visible fissures in the Party, that is. When it came to renewable energy, we learned little new about Beijing's commitment to green energy or its specific development plans.

 

As expected, the Work Report of the NPC Standing Committee revised the 2006 Renewable Energy Law, mandating grid companies buy renewable energy from producers. This law amendment had been announced months in advance. The Work Report as a whole is unremarkable in that it largely reiterates broad promises – to save energy, reduce emissions, preserve ecosystems and protect the environment – already in place.

 

The term "Low Carbon Economy" became a catch phrase at the meetings. CCTV reported that nearly 10% of all proposals raised by participants at the sessions involved the term. The congresses also vowed to make "structural adjustments" to promote "New Emerging Industries", which include new energy, new energy vehicles, new materials and others. Specific details were in short supply, as they always have been.

 

The most surprising new-energy-related news story to emerge from the "two meetings" came regarding Ministry of Industry and Information Technology (MIIT) deputy director Miao Wei. During discussions at the NPC meeting, he called most wind farms in China "vanity projects", built in the wrong places, such as near deserts where blowing sand causes damage. Miao didn't stop with a general denouncement. He called out the 10GW Jiuquan, Gansu-based wind farm in particular, labeling it a "typical vanity project."

 

Now that's a little more familiar, says the Yank.

 

At the risk of reading too much into an isolated episode, I think Miao may be onto something. His comments weren't the only bad news for wind to come out of Beijing in recent weeks.

 

On March 11, Bloomberg reported an interview with Lu Yachen, vice president of Shanghai Electric Group Corp, who claimed 40% of China's wind turbine output capacity was idle. Lu said China's wind industry is suffering from "too many" plants, an oversupply of turbines, over-investment and a grid that can't catch up in the near term. Unlike China's technologically competitive solar industry, wind companies can't simply export their overstocked wares overseas.

 

The result has been, well, "vanity projects" like the ones MIIT's Miao mentioned, which are eye-catching (10GW!) but problematic to get up and running. Yes, problems with sand and site selection are also not helping things. It's not necessarily the worst problem to have. Better zealous provincial leaders with turbine envy than, say, a race to see which province can put the most cars on the road.

 

But the uncomfortable truth is that government support for a chosen industry (such as wind for the past few years) can overheat things before they really get started. Combine this with the overall excitement surrounding green energy in China, and checks on reality are few and far between. Announce that you're going to build the biggest wind farm in the world, and someone (or some bank) will get on board as well.

 

The market will dispatch the ill-positioned and over-ambitious, but it is also the responsibility of the government to help control the monster it created. The mandarins undoubtedly are aware of these pressures, they just won't be published in a Work Report.

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