three technologies as pivotal to its triple mandates of ensuring Japan’s industrial competitiveness, improving energy security through diversification, and tackling the problem of climate change. For each of these devices, new materials and fabrication techniques will be required to improve efficiency and reduce cost. “One day we will reach a point where all our electricity generation is renewables,” says Ueda.
Japanese companies are laboring methodically to realize this dream, but they are also counting on another METI assumption—that, as Ueda said, cutting emissions by 80 percent will be “almost impossible without those three technologies. The three denchi brothers are very important not only for Japan, but for the world.”25
GREEN DRAGON
China has over the last years embraced renewables with a fervor that has pushed it into the lead as a market, as a manufacturer—and as a competitor. In 1973 China had already introduced an agricultural law that called for solar and wind energy. In 1988 the first wind-power project was hooked up to the grid in the far west. Yet for many years renewables were largely considered antipoverty measures for the benefit of the rural poor. By the turn of the century, renewables were starting to get more serious attention. China also recognized that if it was going to be a player in renewables, it needed to put a priority on acquiring technology and know-how—and on supporting entrepreneurs.26
The decisive change came with the Renewable Energy Law of 2005, which jump-started renewables in China. A host of factors had suddenly raised the salience of renewables. Rapid economic growth, particularly for heavy industry, was leading to even more rapid growth in energy consumption. The country had been going through its internal energy crisis, with electricity demand outrunning the availability of coal and electricity, resulting in bottlenecks in supply and brownouts in power. Energy security had become an urgent issue for the top leadership because of growing oil imports and rising oil prices. China would soon start becoming an importer of coal as well. “Based on our current consumption, our fossil energy reserve could not support our economy,” said the chief engineer of China’s National Energy Administration. “We were too large now. So China made the decision to accelerate new and renewable technologies. We need to have the golden momentum of economic growth and the green momentum of clean energy.” The “clean” part was very important. Pollution was a pervasive problem throughout the country. Climate change, emissions from burning coal in particular, was becoming an ever more contentious international issue. And it looked as though renewables would become a global growth industry, and China wanted to be at the forefront.27
The 2005 Renewable Energy Law was followed in 2007 by the Medium- and Long-Term Development Plan for Renewable Energy, which set out specific targets and called for renewables to reach 15 percent of total energy by 2020. With these policies, bolstered by the government’s massive stimulus spending during the global financial crisis, China’s renewable energy moved into high gear. Wind capacity doubled each year between 2005 and 2009.28
China also used its renewables push to promote the cleantech industry, which it had identified as a key growth industry for the twenty-first century. “We will accelerate the development of a low-carbon economy and green economy so as to gain an advantageous position in the international industrial competition,” said China’s Premier Wen Jiabao. As low-cost manufacturers, and bolstered by strong national and local government support, including attractive financing from state-owned banks, Chinese companies have come to dominate the solar panel market and have made significant inroads into the wind-turbine industry. One reason for the latter was China’s decision to insist that 50 percent, and then 70 percent, of the components for domestic wind installations had to be made in China. Although the requirement ended in 2009, this policy gave Chinese wind-turbine suppliers time to expand the scale and sophistication of their operations and building on China’s comparative advantage in manufacturing costs, to be more competitive with foreign companies at home and abroad.29
Yet even with China’s strong support for its renewables industry, the country’s push to boost renewables faces challenges. Hydropower has by far the largest share of any of the renewables, and will likely continue to have such. Though wind and solar are growing at a much faster rate than hydropower, they may together account for just 5 percent of China’s total electricity generation in 2020. Even as China’s renewable generating capacity rapidly expands, so too does its fossil fuel capacity, for China must rapidly expand its electricity capacity