The popularity of renewable energy sources including wind, photovoltaic and biomass is growing dramatically in China. Beijing designated renewable energy as a strategic industry last year, and invested 34.6 billion U.S. dollars, twice as much as the U.S.
Despite the global financial crisis, the renewable energy industry knows no recession. Renewable energy sources accounted for 5.8 percent of the worlds electricity generation last year, or 4,700 gigawatts, and 40 percent of it was generated from wind. The core technology of wind energy is turbines. The wind turbine market in China last year was worth 23 trillion won (19.9 billion dollars), outpacing world No. 2 U.S. China supplies half of the wind turbines used by Germany, the first in the world to develop them. China is also closely chasing leaders in the photovoltaic market, which is nicknamed the second semiconductor. China has four of the worlds top 10 photovoltaic companies, including No. 2 Suntech. Though the Samsung and LG groups of Korea have announced their entry into the photovoltaic market, their decision seems late compared with Chinas.
Chinas rapid growth in renewable energy is largely due to the size of its huge domestic market and aggressive government support. Beijing will raise the share of renewable energy sources up to 15 percent of its electricity generation by 2020. It is fueling growth with domestic wind turbines and photovoltaic facilities as well as generous subsidies and tax benefits. Under Beijings Buy China policy that gives priority to Chinese companies in the selection of part suppliers, the share of foreign companies in the wind turbine market dropped from 70 percent in 2005 to 12 percent last year. The U.S. and Europe are criticizing this as protectionism.
As is seen in Geely Automobile of Chinas takeover of Volvo, the Middle Kingdom has shed its bad reputation of being a country of cheap labor and low quality manufacturing. It is seeing growth in all areas ranging from new products and services to high-tech. Renewable energy sources are one of them. At a time when Korea has not caught up with the advanced technologies of developed economies, it must now compete with China.
The renewable energy industry is a promising area that cannot be given up at a time of climate change and high oil prices. The sector is expected to grow 15.1 percent over the next decade and create many jobs. Companies cannot do it alone in this field, however. It requires huge investment in the initial stage and since it is still in its infancy, renewable energy cannot compete with fossil fuels or nuclear energy. The key is technological development. The Korean government must spare no policy and financial assistance to prepare for the future.