Fast Company

China’s Clean-Energy Ambitions And The Role Of The U.S.

The West is moving toward more conscious consumption just as the East is stretching its influential mass consumption wings. In order to thrive, the established marketplaces must surely take on the entrepreneurial attitude of innovation we see in the developing nations as the balance of purchasing power shifts from West to East.

British filmmaker Caroline Harrison, founder of documentary production group Hive Studios, takes a close look at the energy race in China in her recent documentary Red Hot Green China. While filming, she uncovered all sorts of interesting nuggets about the energy business in China, such as that many of China’s key decision-makers were trained as engineers, and most attended school together. This small handful of people now hold massive influence over China’s clean-tech innovation boom; yet they are also often in competition with one another.

China is all about the deployment of pilot projects. These often come in the form of initial ‘football field’-sized testing grounds for whatever cutting edge technology is in question. If it works, then they move the lab up to a semi-industrial-sized model for further testing and then upward to a full industrial production model.  While we in the West are focused on innovative thinking, China is focused on innovative doing: they know that if they can make one, they can make a million; and in the energy field, this is increasingly becoming their edge.

China has studied the Western world intensively, really since the start of the industrial revolution. Now, they have determined that the clean energy industry is critical, and they are at the top of their game when it comes to designing through experimentation. China’s clean energy engineers believe that one day everyone will come to them for their innovations. While this may or may not be so, it is a focused goal within their industry. As Harrison says below, the opportunities for the Western world lie in working with China on their clean tech-driven goals, which brings its own set of complex variables, issues, and challenges.

Caroline Harrison on Clean Energy in China:

"I am not Chinese, and I don’t speak the language. I’m a British-born filmmaker. Yet after three years traversing the length and breadth of China filming, investigating and interviewing people within the Chinese clean energy sector, you start to pick up a thing or two.

I have come to realize that China’s development and deployment of clean energy technologies triggers one of the greatest dilemmas facing the U.S. By that, I mean it holds both immensely positive, and potentially catastrophic consequences.

In the past few years, China has catapulted itself into pole position as the world’s leading producer of wind turbines and solar modules. Their total installed renewable energy capacity (measured in MW) is now over half the world’s total of 193MW.

Wind and hydro take the lion’s share within China. Surprisingly, installed solar capacity within China is still very small, at only 800 MW.

What really holds the ‘holy s***’ factor for me though, is what’s coming. If modern man’s transition to sustainable energy is your thing, this is the decade to wake up. China’s 2020 targets have been set and the deployment of every technology across the ‘alternative energy board’ is set to grow. When it comes to solar and biomass, I think the better word is ‘explode.’

One thing you learn very quickly when you hang around in China is that most people don’t question national targets. “Oh, they’ll do it,” or “I think they’ll exceed their goals,” are common statements. But dig a little deeper and the challenge they’ve set for themselves becomes very interesting.

Today, coal is cheap in China, unsurprisingly, as it supplies about 80% of the nation’s energy demand. It is mined largely from the northwest of the country, then transported and burned almost everywhere else. They have an estimated 100 years of coal left. Whether they’ll ever get through this supply rests on two things, water and price. One fifth of China’s national water consumption is currently used in the mining, processing and consumption of coal. Dwindling water supplies are the number one threat to China’s stability right now. Add to this the fact that sooner or later, and some think within the next few years, the true cost of carbon release from burning coal will begin to trickle into it’s shelf price, causing ‘King Coal’ to slip into the shadow of alternatives such as nuclear. Yet today’s resistance to this is immense. For every forward-thinking technology pioneer in China, there are ten middle managers striving to maintain the status quo.

The growth of the wind-energy market has an enormous hurdle to overcome. China’s best wind energy resources are also found in the northwest, but there they stay because of a complex and outdated electric grid. As they expand their wind farms across Gansu, Inner Mongolia, and Hebei, China has to simultaneously rebuild its national grid in order to transport that energy to where it is needed. Smart grid technology holds the golden key, but a national smart grid is said to be at least a decade away.

Within the nuclear industry, expansion is massively hampered by a lack of the skilled workers needed to build and run these plants. The industry in China is also notoriously corrupt.

The growth of solar, biomass, and alternative fuels hangs on price, price often hangs on the pace of innovation. This is where America becomes important. Everywhere I have looked within China’s clean energy frontier, I have found stories that could hold immense consequence for the U.S.-China relationship. Step back from those individual stories, and I have to assume that something very fundamental is taking place.

Put simply, America is losing its manufacturing edge in the clean energy space as much as the mobile phone space. China is acquiring old factories, old machinery, and the contracts for the natural resources. But when it comes to innovation--the brightest ideas from the brightest minds, the battle is still playing out. This is about ‘he who shall own,’ not just ‘he who shall make.’

Chinese engineers and scientists are on the rise. Many who study in the West return to China. Chinese companies pay big bucks for the expertise of Western employees. Western corporations lured by entry into Chinese markets and an immediate profit surge, are forced to lay their technology bare and more often than not, soon find somebody selling it cheaper down the street.

Yet within this frenzy, some U.S. companies appear to be winning big. Business-to-business partnerships are being formed which appear to hold the promise of benefit to both sides in the long-term.

So what does all this mean for us living in the U.S. today, at the beginning of the clean energy decade? China is accelerating into the clean energy space much faster than us. They are taking the manufacturing jobs, they are battling for the R&D jobs, and they have their eyes firmly on Intellectual Property. As we hurtle into a period of global economic, environmental, and political disruption the fight for dwindling fossil fuels gets increasingly ugly and expensive. Ultimately the demand for clean energy alternatives will surge, at home and abroad. Where do we stand in all of this?

The transition to sustainable energy has to and is going to happen, and if China is going to lead the way, so be it. Why hold them back from testing these technologies and learning what we all need to learn? After all, it’s expensive and things can go wrong. Some U.S. companies stepping in alongside China in this effort are finding immense benefit. Are they showing us that we could actually become partners with the nation that Donald Trump so often refers to as ‘the enemy’?

Herein lies our dilemma. Do we help them? Do we race them? Or do we try to stop them?

I’m a filmmaker. My job is to reflect these situations back at you in a compelling way. Beyond that, the decision rests with you.”

(Red Hot Green China is a project being produced in partnership with The Environmental Media Fund, through which the project has nonprofit fiscal sponsorship and mentorship.)

[Image: Flickr user Slices of Light]

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