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The Film “Under the Dome” Reflects New Opportunities in China’s Green Industries, Reports TrendForce

5 March 2015 LED / Energy TrendForce

Chai Jing’s documentary, “Under the Dome” has stirred up Chinese society’s deep concern about smog and other pollution problems that are widespread in the country. While China annual GDP on average has grown by about 10% over the last 20 years, the amount of GDP spent on addressing environmental issues during the same period has seen less than 1% growth. This indicates that economic development still takes precedence over environmental protection in the mindset of the Chinese government. By bringing together the results of their green energy research and observations on China’s long-term trends, analysts from both the green energy research division of TrendForce and Topology Research Institute have together created an outline of actions that China is going take in the near future. TrendForce forecasts that the Chinese government will aggressively pursue the following tasks, which involve all administration levels from the local to the central government. We can look forward to these upcoming policy actions leading to exciting prospects in the green industries. 

1. The Chinese government will likely increase the ratios of electricity generation by hydro, wind, and solar energy in order to reduce the reliance on coal and oil. 
The state is going to also become very active in the development of NEVs(New Energy Vehicles) since they are instrumental in reducing CO₂ emissions from automobiles. 
3. Public discourses on the environment will most likely to expand in scope and lead to actions in wastewater management and further reduction of industrial pollutions. 

The promotion of clean energies and LED lighting will reduce fossil fuel demands 

To reduce emissions from burning fossil fuels and produce more clean power, China’s National Energy Administration (NEA) attempts to increase the ratios of hydro, wind and solar power generation to the total electricity production. The administration’s goal is to install 100GW of PV systems and 200GW of wind systems by 2020. According to TrendForce, the average CO₂ emission factor for China’s regional grids is 0.7kg/kWh. If China did achieve the NEA’s solar energy goal and the PV systems could generate 1,200 hours of electricity on average per year nationwide, TrendForce estimates that by 2020 China’s PV power generation would reach 120 billion kWh, which equals to a reduction of CO₂ emissions in the amount of 84 million tons. 

It is expected that the reduction of standard coal consumption will lead to corresponding decrease in air pollution level and increase use of zero-carbon, renewable energies in place of fossil fuels. In recent years, China has taken many steps to build a concrete renewable energy policy framework and was the largest PV energy market worldwide in 2014. The NEA’s PV installation target for 2015 is 15GW, which means that China will account for about 27% of the world’s solar energy demand. Every part of the PV industry will benefit greatly from the demand-driven opportunities, from silicon wafers to PV systems. 

On the side of energy conservation, 17% to 20% of electricity is used for lighting in China. In 2014, China consumed 5.523 trillion kWh of electricity, of which 1.1 trillion kWh was for lighting. It is expected that once high-efficiency LED became common in China, the country will see its lighting power consumption reduced by half or more. This further translates to reduction of coal-use by 300 million tons. Presently, LED has yet to penetrate deeply in China’s market, so it still has a lot to contribute in the fight against smog. 

Active development in the NEVs sector will reduce CO₂ emissions from cars 

Air pollutions in China are mainly made of sulfur dioxide, nitrogen oxide, and dust particles (or fine soot). The primary source of these pollutants is industrial emissions, which account for 90.3% of the country’s sulfur dioxide emissions, 70.9% of nitrogen oxide, and 86.1% of dust particles. Mobile vehicle emissions are the second largest source of nitrogen oxide, taking up 27.4% of its total emissions. 

In response to this huge environmental challenge, China’s State Council issued “Action Plan for Air Pollution Prevention and Control” in 2013. This plan entails ten specific measures to progressively reduce multi-pollutant emissions and improve the country’s air quality in the next five years or longer. Mobile vehicles will be included in environmental regulatory scheme as a mobile source of emissions. The state also requires local authorities to reorganize their urban planning to include an expanded intelligence transportation system and other specific emission-reducing infrastructures or policies. 

According to Topology’s observations, the strong and concerted policy efforts to introduce new energy vehicles in China have led to strong sales with 74,800 NEVs units sold in 2014. Compared with the previous year, the NEVs sales growth multiplied 3.2 times. China is now the third largest NEVs market in the world, following the US as and Europe. 

Despite these impressive achievements, the number of NEVs possession in China from 2009 to 2014 amounted to 136,000 units, and this number is far short of the policy target of 500,000 units by 2015. The current predicament suggests that at least 364,000 more of them have to be on the road this year in order to meet the policy mandate. This figure represents almost the entire NEVs market worldwide in 2014, thus the potential for growth is enormous. 

Environmental discourses will also drive developments in wastewater solutions and further actions to reduce industrial pollutions 

Managing water pollutions is just as urgent for the Chinese government as reducing air contamination. The main sources of water pollutions in China are from industrial effluents, municipal wastewater discharges, and centralized waste-treatment facilities. Among them, the municipal source accounts for much of the water pollution’s growth. Studies have shown that China’s total volume of discharged wastewater reached 69.54 billion tons in 2013, a 1.5% growth compared with the prior year. Additionally, municipal wastewater made up of 69.8% of the total volume in 2013 with 48.51 billion tons. The amount of industrial effluents was 20.98 billion tons, or 30.2%. 

Topology’s observations show the pollutions of surface water, groundwater, and coastal water in China have reached a critical stage, and the state is still very far from establishing a comprehensive wastewater solution policy, which was a defined goal in the 12th Five-Year Plan. The current leadership in China’s national government have reduced the importance of GDP growth in their performance evaluation of local authorities while giving more weight to regional wastewater solution initiatives. In terms of controlling water pollutions, a great developmental and market gap exist between the major cities and the rest of the country made up of county-level cities, towns, and villages. As local authorities focus more on environmental issues, this vast part of the market will be gradually opened and drive relevant investments. Like controlling air pollutions, the proposed business opportunities in the area of wastewater solution are enormous.

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