New Law in China Bolsters Renewable Energy Industry

In late December China's legislative body, the National People's Congress, passed an amendment to the country's renewable energy law under which electricity grid companies, which are owned by the state, will be required to buy all renewable energy output generated in China.

State-owned grid companies that refuse to abide by the new law will be "fined up to an amount double that of the economic loss of the renewable energy company," the Xinhua News Agency reported ("China Amends Law to Boost Renewable Energy Law," Dec. 26, 2009). While in 2008 China generated the fourth largest amount of wind power in the world, about one-third of it never reached the grid, Xinhua reported.

"Renewable energy power in the country's resource rich, underdeveloped northwestern region must be sent to the resource-scarce, prosperous coastal area," Wang Zhongying, Energy Research Institute head of renewable energy development, told Xinhua.

Bearing this in mind, one of the major challenges facing China is the absence of a "smart grid" that could obviate some of the transmission issues associated with bringing more renewables to load centers. This observation has been made by many including, most recently, an article in The Wall Street Journal ("Chinese Law Aims to Increase the Use of Renewable Energy," Dec. 28, 2009), in which reporter Shai Oster writes, "China's electricity-grid operators need to develop a smarter network to handle how to dispatch electricity generated by wind or solar energy, which fluctuates widely depending on weather patterns, and to relate it to demand for power, which swings in different cycles."

The transmission issues sounds rather familiar, don't they. There is a great deal to be done -- whether in the China, the EU, or the U.S. -- to address the transmission issues.