World Energy Outlook 2007

eturn to foreign investors on wind projects is around 2% to 4%, which
explains their lack of enthusiasm. Domestic investors earn much higher
returns, of at least 8%, depending on the particulars of the project.
Renewables
Renewable energy accounted for about 15% of China’s total primary energy
consumption in 2005. The main renewable energy source now is biomass,
mainly used for cooking and heating in rural households. In the electricity
sector, hydropower is the main renewable energy source, accounting for 16%
of total generation in 2005. Solar thermal heating is also well developed. The
Chinese government plans to significantly expand the use of renewable energy
in the future, for electricity and heat production and for making transport
fuels.
China’s biomass consumption, at 227 Mtoe in 2005, is the largest in the world.
It is almost entirely traditional biomass. Only 3.3 Mtoe were used in power
generation in 2005. China’s main biomass resources comprise agricultural
wastes, scraps from the forestry and forest product industries, and municipal
waste. Agricultural wastes are widely distributed across the country. Among
them, crop stalks suitable for energy production represent a potential of about
105 Mtoe yearly. In the mid to long term, the forestry sector could provide a
yearly potential of 210 Mtoe. Wastes from the processing of agricultural
products and manure from livestock farms could, theoretically, also contribute
another 80 billion cubic metres of biogas per year. Municipal waste could
provide some 16 billion cubic metres of landfill gas. The government
target calls for 5.5 GW of biomass-fired generating capacity by 2010 and
30 GW by 2020.
Non-food-grains biofuels are seen as an important means of helping to meet
fuel demand in the transport sector. China has so far established two ethanol
fuel production bases, with a total yearly production capacity of over 1 Mt.
Production of biofuel in China has reached about half a million tonnes yearly.
In the Reference Scenario, total biomass consumption remains broadly
unchanged through to 2030. However, the utilisation pattern changes
considerably. Traditional biomass consumption falls to 159 Mtoe by 2030. By
contrast, demand for electricity and heat from biomass, including industrial
on-site generation, is projected to increase, from 8 TWh in 2005 to 110 TWh
in 2030, requiring 3.3 Mtoe and 38 Mtoe of biomass fuel respectively.
Demand for biofuels reaches 8 Mtoe.
China’s economic hydropower potential – some 1 750 TWh – is the highest in
the world (WEC, 2007). The resources are located mainly on the Yangtze,
Lancang, Hongshui and Wujiang rivers. Further hydro development will be
354 World Energy Outlook 2007 - CHINA’S ENERGY PROSPECTS