BEIJING--(BUSINESS WIRE)--The new energy industry was recognized as one of China’s leading industries as the State Council issued the Decision on the State Council on Accelerating the Fostering and Development of Strategic Emerging Industries in October 2010. During the 12th Five-Year Plan period (2011-2015), China’s new energy industry will embrace significant opportunities to accelerate its development and layout adjustment.
With policy and resources being the two major factors affecting industrial concentration, the industry features coordinated development in Eastern, Central and Western regions.
With regional policy and resources supports, China has formed multiple new energy industrial clusters in the Eastern coastal region centered on the Circum-Bohai-Sea Region and the Yangtze River Delta, while in the Central and Western regions, the industry is enjoying a rapid growth in Jiangxi, Henan and Sichuan provinces as well as Inner Mongolia and Xijiang autonomous regions.
The Yangtze River Delta and Circum-Bohai-Sea Region focus on R&D and high-end manufacturing; the Central region focuses on the R&D and manufacturing of core materials; while the Western region, with its rich natural resources, focuses on new energy power generation projects that serve the Northern, Central and Southern regions.
At present, solar energy, wind power, nuclear power and biomass energy are the four major types of new energy that have seen large-scale applications in China, each with its distinctive characteristics.
Solar PV Sector: with the Yangtze River Delta as its manufacturing base, and the Central and Western regions as its raw materials supply base. The Yangtze River Delta is China’s first photovoltaic industry base, and with the extension of the industrial chain, Jiangxi Province’s Xinyu City, Henan Province’s Luoyang City and Sichuan Province’s Leshan City have also become domestic wafer manufacturing and polysilicon bases.
Wind Power Sector: with the Circum-Bohai-Sea Region hosting multiple renowned domestic and foreign wind power equipment manufacturers, the Yangtze River Delta as home to various wind power equipment manufacturers and the Northwest region as a land of wind farms.
Nuclear Sector: with nuclear power plants mainly located in the coastal areas and equipment manufacturers in Southwest and Northeast regions. China’s four completed nuclear power plants and 13 others under construction are all located in the coastal areas, with major suppliers and manufacturing bases of conventional islands and nuclear islands in Sichuan and Heilongjiang provinces and coastal areas close to the nuclear power plants.
Biomass Energy Sector: with two-thirds of China’s biomass resources located in 12 provinces and autonomous regions represented by Inner Mongolia, Sichuan, Henan, Shandong, Anhui, Hebei and Jiangsu. Around 70% of China’s biomass power generation, biomass liquid and gas fuel capacities are located in these areas.
The industry tends to concentrate in the Yangtze River Delta, the Circum-Bohai-Sea Region and Northwest and Southwest regions.
The Yangtze River Delta is home to 60% of China’s photovoltaic enterprises and over 20% of wind power equipment manufacturers; the Circum-Bohai-Sea Region contains about 30% of China’s wind power equipment manufacturers; with abundant solar energy and wind power resources, the Northwest region gathers more than 90% of China’s wind power projects and solar photovoltaic projects, and three of the eight ten million-kilowatt wind power bases planned by the state are located in the region; the Southwest region is an important silicon materials supply base and nuclear power equipment manufacturing base.
The layout of China’s new energy industry will see the following trends:
1. The entire industry will continue to concentrate in policy-supported and resource-rich regions in the coming five years.
China’s new energy industry at a growth stage is being heavily influenced by regional policies and local resource conditions.
As the new energy industry is a typical policy-oriented industry in China, supporting local policies is key for investment attraction. Meanwhile, natural resources, mineral resources and human resources are also essential elements for new energy projects. In addition, in order to cut costs, the new energy enterprises would also take into consideration the distance from the market and the cost of raw materials.
2. Large-scale new energy equipment manufacturing facilities will move closer to the terminal market.
In order to avoid the high costs arising from long-distance transportation, as well as for the convenience of the operation and maintenance work, the large-scale new energy equipment manufacturing facilities will move closer to the terminal market, including the Northwest and Southwest regions where wind and solar energy resources abound.
3. R&D and sales capacities will concentrate in capital and talent-intensive regions.
The R&D of the new energy industry requires premium human resources, advanced experiment devices and massive capital investment. Therefore, many domestic new energy enterprises are locating their R&D centers in the regions with intensive human resources and developed infrastructures.
As for the marketing side, Beijing, Shanghai and other cities with strong international functions are attracting new energy enterprises targeting the overseas market.
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