China Charges Ahead on Green Energy

Bloomberg New Energy Finance reported last week that China is charging ahead of the U.S. when it comes to spending on green energy. China upped its investment in low-carbon energy 30 percent last year, bringing the total to $51.1 billion. Its investment is already paying off, bumping the Asian country ahead of the United States on the Ernst & Young quarterly index of the most attractive countries for renewable energy projects.

According to Ed Lay of Emeritus National Group, China is spending $12 million per minute on some aspect of renewable energy.

China's commitment to clean energy did not materialize last year but has been ongoing since at least 2009. That was the year when China for the first time outspent its G-20 compatriots on clean energy development. China spent almost double the United States' investment in green energy that year.

Ironically, the autocratic nature of Chinese government has enabled China to surge ahead of the rest of the world in green energy investment. No regulations or parliamentary debate is necessary once the Chinese government sets a goal.

Of course, China also needs to accomplish more domestically with its green investments than other nations. China was accorded the dubious title of world's largest polluter back in 2008.

What does China have to show for its green energy investments?

China is leading the world when it comes to high speed trains: longest tracks, highest speeds, most ambitious expansion plans. By 2012, China will have more high speed rail than all the rest of the world combined. The high speed train network has knocked the airlines out of certain markets where the fast and relatively cheaper, environmentally friendlier trains appeal more to the public.

China has also invested heavily in urban subway systems. As part of its stimulus spending when the world economy went sour, China financed 60 subway projects in over 20 cities. The subway systems will connect up with high speed train for long distance travel.

By investing heavily in wind and solar power, China not only eyes increased domestic use of wind and solar power but has positioned itself as the world's major green technology exporter. That country is also leading the world in new wind power installations.

China captured 40 percent of the world solar panel market by 2009, 30 percent of the wind turbine market, and 77 percent of the solar hot water collectors.

China's use of the clean technology it develops is supported through government subsidies. Both national and provincial governments use incentives such as tax breaks and preferential pricing to encourage clean technology. China's "Big 5" power companies, all state-owned, are responsible for the lion's share of installed wind capacity.

When it comes to ultra high voltage transmission equipment, China is also poised to lead the pack. Its State Grid Corporation is investing in a smart grid and extensive UHV transmission lines.