CHINA is drafting a stimulus package for the renewable energy industry that seeks to more than double the output from power sources such as solar and wind by 2020 compared with an earlier goalThe plan, which will join other industry-specific rejuvenation packages approved earlier by the State Council, is expected to be unveiled in the coming months, Shi Dinghuan, who serves on the council and is also president of the Chinese Renewable Energy Society, said at a solar energy conference yesterday in Shanghai.

Under the original plan, set in 2007, the government targeted 1,800 megawatts of solar capacity, 300,000MW of hydropower, 30,000MW each for wind and biomass and 40,000MW for nuclear energy by 2020, accounting for 15 percent of China’s overall energy mix.

Coal busting

The plan called for a 2 trillion yuan (US$293 billion) investment in the alternative energy sector by 2020 to reduce reliance on polluting fuels like oil and coal.

Since then, the government has already more than tripled the 2020 goal for wind power to at least 100,000MW and is expected to easily break the target for nuclear, although the majority of the renewable energy target is still focused on hydro.

The exact capacity goals under the new stimulus package and the amount of spending were not revealed.

For solar, however, a sector that is gaining attention after the government unveiled a generous subsidy program in late March, output by 2020 may grow tenfold from the original goal, Wang Zhongying, an official with the National Development and Reform Commission, said at the energy conference.

“The original goal is too low. Solar could reach 10,000MW in 2020 and possibly 20,000MW,” said Wang, director for renewable energy development at the NDRC’s Energy Research Institute.

Wang said the renewable energy stimulus plan may include an improved tariff mechanism that would help connect solar power to the nation’s electricity grids.

Meanwhile, Shi Zhengrong, chairman of Suntech Power Holding Co, voiced concern over the domestic solar cell manufacturing industry, which is the world’s largest and exports most of its products. He said too many companies are applying for projects under the March subsidy program, which will cover nearly half the costs of the technology.

“Quality could be a big problem with too many firms swarming into the program,” Shi said.

“The future is bright for the domestic solar market, but it’s not possible to have 100 or 1,000 players to share the cake,” he said. “In the long run, Chinese manufacturers must focus on quality, rather than price advantage.”

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