New Energy Industry - A Big Winner in China's 5 Year Plan

China has just announced its next 5 year plan (its 12th) and one of the industries that will be a clear winner of the policies is New Energy. Now that the country has become the world's biggest producer and consumer of power, it's become a political imperative to develop clean and renewable sources of energy.

The plan is still in draft form so there is room for change but the headline figure is that by 2015 the country will develop 235 million Kilowatts of clean energy production. All renewable sectors have been singled out for specific developments in the plan too.

Hydropower

It may not be a favourite of environmentalists and the country may pay a high ecological price later on down the road, but there's no denying that hydropower is the most effective renewable energy source available today. 120 million Kilowatts is expected to be found from 3 major new hydro-electric projects on the Jinsha, Yalong and Dadu rivers.

Wind Farms

There will be a total of 8 new major wind projects, 6 on land and 2 to be built offshore in coastal areas. These projects are expected to enable another 70 million Kilowatts of power.

Solar

Solar is still an emerging technology and with typically poor returns compared to the energy collected and difficulty in storing that power for long-term use it's not surprising that it's the smallest part of the plan at the moment. In the future we'd expect a major increase in solar as it becomes more efficient and storage technologies improve. For the moment 5 million Kilowatts is expected to be produced by new solar farms in Tibet, Yunnan, Inner Mongolia, Gansu, Qinghai, Ningshia, and XinXiang.

It's not all good news though; there will still be a ramp up in gas and oil consumption and the plan also allows for nearly 150,000 kilometres of pipelines mainly to Asian republic states from the old Soviet Union to allow more efficient transportation and delivery.

With China already emerging as the world's biggest investor in New Energy it's not surprising that there is strong political will to begin implementing some of the world's largest investments in practical projects. For investors in the country this is a major opportunity to field these technologies and prove their effectiveness while gaining return on those investments to further research and development in the area. The best of the New Energy companies are looking at a very prosperous 5 years indeed.