Road Runner

China's Wind Energy Development Hits a Road Block

Though APWR seems like a good investment, one I am looking at, there may be an opportunity in the next year to buy this stock at a lower price because of the real and/or perceived problem of building enough electrical transmission lines for all the wind generated. I'm not looking at the electrical grid bottleneck as a problem, but as a temporary (as in 2 to 3 years) buying opportunity. Once China “turns up the heat” on something it wants or needs it happens fast, as opposed to almost every other country in the world.

Also, I like PWR and ABB as grid infrastructure plays. I own PWR. I will buy ABB if there is a pullback. I’ll admit it – I missed out on buying it lower.

ABB is big into High Voltage Direct Current (HVDC) transmission lines which is a good fit for distant wind farms and undersea cables to offshore wind farms. China is also using HVDC to transmit power from the interior hydroelectric dams to the big cities on the coast.

China Kicks off Renewable Energy Drive with Wind Farms

johnqh said, "When you talk about "long term", it means 5 to 10 years for Americans. It means 50 years for Chinese. China will be the leader for clean and renewable energy. It won't happen overnight. However, that is a strategic goal and they will stick to it for decades.".

This is a very important point about culture differences between the US and China. Many naysayers of solar and wind say that these sources of energy are not big enough to greatly reduce use of oil and/or coal. This is true if you think in terms of 5 to 10 years. But, it is not true if you think in terms of 50 years. The multi-trillion dollar oil and coal infrastructure of the US took over 100 years to build. It’s not going to be replaced by anything in 5 to 10 years. It will take many decades. But, luckily we have several decades of oil, coal, and natural gas left to smooth the transition.

China is following the ancient Chinese proverb, “A Journey of a thousand miles, begins with a single step”. They are setting a long term goal and taking step-by-step action to accomplish that goal. In the US we have difficulty following that proverb because we are so short sighted. We wouldn’t bother starting the journey, or we would get distracted shortly after starting and start moving toward a different destination. It seems that the only way we could get to that original distant destination is if the proverb read, “A Journey of a thousand miles, begins with purchasing an airplane ticket online”. We always want instant results, the “silver bullet” solution.

Chinese Lawmakers' New Renewable Energy Policy Will Benefit Solar Companies

john s. gordon, China is a large country that includes many places that are very well suited for solar and wind farms. They have the Gobi desert which is equivalent to the Mojave desert in California for solar and wind generation.

A very powerful and established, but little talked about, power transmission technology can bring power from those remote places to the big cities a thousand miles away is high-voltage direct current (HVDC), en.wikipedia.org/wiki/.... This is the technology that can move the power of giant high-plains wind farms in the US to Midwest and west coast cities, if the politics can be worked out.

Also, the air pollution of the Chinese cities is all the more motive to implement roof-top solar. Shut off those coal fired plants and reduce the health problems of the Chinese people. Healthier people are happier people less apt to get angry at the government and threaten overthrow.

Chinese Lawmakers' New Renewable Energy Policy Will Benefit Solar Companies

Response to omooc. Here is what I said above, “Dictatorships usually lead to corruption, destruction of the middle-class, and poor economic growth.”

A dictatorship maintains power through a network of ruling people. This network extends all the way down to local governments. They maintain their loyalty to the ruling power usually by being paid and/or getting favoritism (corruption) that leads to their economic gain. Thus, there is a huge amount of funneling of wealth to this ruling class, leaving a poor underclass. Thus, a country of rich and poor is created, with few middle class.

The middle-class is where the wealth of a county is built. Usually the rich are too involved with maintaining their power and money, and it perusing pleasure to build things of value (like owning multiple homes). The poor are too involved with day-to-day survival to build things of value. The middle class is the group of people that work hard and have the spare time and faith in the future to invest in the future by improving the infrastructure of their local communities, etc. They invent things to make their lives better.

One way this “payola” dictatorship/ruling-cl... economy can still create a strong wealth-generating middle class is if the overall economy is growing fast. This may be the current situation in China.

Chinese Lawmakers' New Renewable Energy Policy Will Benefit Solar Companies

Sorry - accidentally reposted first post.

Chinese Lawmakers' New Renewable Energy Policy Will Benefit Solar Companies

Quiz. What is the best form or government? Answer. A benevolent dictatorship. No, not a democracy/republic - I will explain later. China is something like a benevolent dictatorship now because it is forced to be pro growth, plus, at the same time, take care of its people If it doesn’t, it will be overthrown by the masses - in China, the word “masses” takes on a whole new meaning.

The reason a benevolent dictatorship is better than a democracy/republic, like the US, is it can get things done that are in the best interest of the economy and people without being thwarted by special interests. This mainly entails funneling wealth into public works projects that have a high “multiplier”. Multiplier is the economic term that means the economic benefits of the project far outweigh the cost of the project. My favorite example is the Hoover damn. It cost 10s of millions to build, but it launched the multi billion dollar expansion of the Southwest US. Millions spent for billions returned, nice!

Please don’t misunderstand me. I am not saying to turn away from democracy. A benevolent dictatorship is almost impossible to actively implement. Dictatorships usually lead to corruption, destruction of the middle-class, and poor economic growth. I am only making a point about how, in this economic crisis, China has an advantage over the democracies of the world in being able to quickly, decisively, take action to promote alternate energy. They can build power lines wherever they want. They can spend 100s of billions building on electric and alternative energy infrastructure that will take decades to pay for itself, but reap huge long term (30 plus years) economic benefits. We, the US, are still getting the economic benefits of the Great Depression building projects (like the Hoover damn and damns of the Tennessee Valley Authority) 80 years later.

So, my point is, take China seriously when it comes to government action. If they get focused on alternate energy, which they should for multiple reasons (remember smog at the Olympics), it will take on the feel of a highly coordinated, powerful, military assault. It will not be the piece-meal, anemic, politically-driven, uneven, destructive (ethanol production from corn) effort that the US is putting forward in promoting alternate energy.

















One more point about China. China has a huge incentive to keep the economy growing at a high single digit rate, plus to keep its people employed. If it doesn't, it risks unrest and demands for government overthrow.

But, China growth was hugely dependant (by like 50%) on exports, and exports have collapsed without expectation of recovery because the US consumer will be in a coma for many years with high debt and low housing prices (no more using a second mortgage to buy a big screen TV).

The Chinese government must spend big to make up the gap in exports. One of the best places to spend is infrastructure because it improves productivity (has the multiplier effect as I mentioned above) and it puts home country people to work (hard to outsource construction). The downside for infrastructure spending is it often takes years to go from kick-off to fully employed job sites. Unlike in the US where infrastructure spending is not the best short term stimulus because of this huge delay in job creation, in China they can cut through the red tape to get projects going much faster. I’m not saying this is always good since things like the environment may suffer. I’m just saying it is something to understand about China and their “go go” economy and paranoid benevolent government.

Chinese Lawmakers' New Renewable Energy Policy Will Benefit Solar Companies

Quiz. What is the best form or government? Answer. A benevolent dictatorship. No, not a democracy/republic - I will explain later. China is something like a benevolent dictatorship now because it is forced to be pro growth, plus, at the same time, take care of its people If it doesn’t, it will be overthrown by the masses - in China, the word “masses” takes on a whole new meaning.

The reason a benevolent dictatorship is better than a democracy/republic, like the US, is it can get things done that are in the best interest of the economy and people without being thwarted by special interests. This mainly entails funneling wealth into public works projects that have a high “multiplier”. Multiplier is the economic term that means the economic benefits of the project far outweigh the cost of the project. My favorite example is the Hoover damn. It cost 10s of millions to build, but it launched the multi billion dollar expansion of the Southwest US. Millions spent for billions returned, nice!

Please don’t misunderstand me. I am not saying to turn away from democracy. A benevolent dictatorship is almost impossible to actively implement. Dictatorships usually lead to corruption, destruction of the middle-class, and poor economic growth. I am only making a point about how, in this economic crisis, China has an advantage over the democracies of the world in being able to quickly, decisively, take action to promote alternate energy. They can build power lines wherever they want. They can spend 100s of billions building on electric and alternative energy infrastructure that will take decades to pay for itself, but reap huge long term (30 plus years) economic benefits. We, the US, are still getting the economic benefits of the Great Depression building projects (like the Hoover damn and damns of the Tennessee Valley Authority) 80 years later.

So, my point is, take China seriously when it comes to government action. If they get focused on alternate energy, which they should for multiple reasons (remember smog at the Olympics), it will take on the feel of a highly coordinated, powerful, military assault. It will not be the piece-meal, anemic, politically-driven, uneven, destructive (ethanol production from corn) effort that the US is putting forward in promoting alternate energy.

Seven New Developments in Renewable Energy

Thanks for the good info. It's good to see that there is still activity in wind and solar after the double punch of lower oil prices and the credit crunch.

China: Wind Power for 1.3B People

Nice to-the-point article. Well written and good info. Thank you,