Over the past five years, China’s Wind energy sector has experienced significant growth. According to the Global Wind Energy Council (GWEC), China’s annual wind energy capacity installation grew at the rate of 92% CAGR from 2005 to 2011, and in 2011, China’s cumulative capacity is at 63GW, which surpassed USA’s 47GW and made China become the world’s largest wind turbine market. In 2011, China has accounted for 44% of the new total global wind capacity installations. In only six years, China has become the most important country in the wind energy industry.
In my mind, the fundamental of the Chinese wind energy growth story was driven by the three following major reasons: 1) Policy toward renewable energy 2) Wind energy is the most cost-efficient, mature, and feasible renewable technology for policy makers. 3) Policies favorable to Chinese domestic wind energy players. Here, I would like to briefly discuss these reasons. Currently, Coal has accounted for 70% of China’s primary energy needs but is also the major sources of the pollutants and greenhouse gases. With the aim of improving the pollution status and the needs of diversification of energy usage, Chinese government has formed two important policies for renewable energy industry: 1) The Renewable Energy Law in January 2006 (amended in 2010), which created a clear framework and incentives for renewable energy stakeholders, and 2) The Medium and Long-term Plan for Renewable Energy Development in China in September 20007, which set a clear renewable energy target for China government with the aggressive target that expect renewable energy account for 10% of the primary energy needs in 2010, and 15% of the primary energy needs in 2020. Also, with the aim of building Chinese own wind energy supply chain, Chinese government created a domestic-favorable policy “Notice on Wind Power Generation Facility Construction and Management Requirements” in 2007, which requested that 70% of turbine must be domestically produced and thus cause the strong market share growth of domestic wind energy players in China, in contrast to the structural market share loss on the foreign wind energy players side.