VZCZCXRO2587
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1521/01 1582253
ZNR UUUUU ZZH
P 072253Z JUN 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 4358
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 BEIJING 001521 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM SFLATT/JHABJAN 
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, 
READE, 
VENKATARAMAN, KEMP, MILLER, MALMROSE 
DOC FOR MELCHER, SAUNDERS; LORENTZEN AND SHOWERS 
(5130); HEIZNEN(6510) 
 
E.O. 12958:  N/A 
TAGS: ECON EINV SENV CH
SUBJECT:  CHINA TO INTRODUCE GREEN ENERGY SUPPORT 
PLAN 
 
This cable is Sensitive but Unclassified (SBU) and 
for official use only.  Not for transmission outside 
USG channels. 
 
¶1. (SBU) Summary:  China's National Energy 
Administration (NEA) has announced it will soon 
submit a support plan for the alternate energy 
sector.  Although specific details have not yet been 
released, the plan will focus on more-efficient and 
alternative energies--particularly wind and solar-- 
and an Embassy contact estimated that investment in 
the new energy sector would reach RMB 4.5 trillion 
by 2020.  Although some industry experts predicted 
the plan will turn China into a key market for solar 
equipment, the plan appears to emphasize 
domestically-available technology.  End Summary. 
 
Emphasis on New Energy Technology 
--------------------------------- 
 
¶2. (U) At a June 1 press conference, Vice Chairman 
Liu Qi announced that NEA had completed a draft 
"Development Plan for New Energy" and would soon 
submit it to the National Development and Reform 
Commission (NDRC) and the State Council for 
approval.  Liu explained that the government 
considered development of "new energy" an important 
economic development strategy and would greatly 
increase government investment in the new energy 
sector.  Under the plan, improved technology would 
lower costs and help industrialize the new energy 
sector.  Liu also emphasized that NEA would proceed 
cautiously and consider possible risks in their 
pursuit of alternative energy. 
 
Plan to Focus on Wind, Solar, and Biomass 
----------------------------------------- 
 
¶3. (U) The plan outlines development goals for new 
alternative energies such as wind power, solar 
power, and biomass energy, as well as NEA's 
intention to improve efficiency and reduce emissions 
from traditional carbon-based energy sources through 
technologies such as clean coal plants and smart 
grid technology.  An NDRC official emphasized that 
wind power generation, in particular, would be a key 
area of development.  The draft plan calls for total 
wind power capacity to reach 150 GW by 2020, solar 
power to reach 20GW, and nuclear power to reach 
80GW.  The plan also addresses one of the main 
challenges for new energy development: connecting 
these alternative energy sources to the power 
grid.  According an industry expert, the plan could 
transform China into a key market for the solar 
photovoltaic industry; changing it from the "world's 
factory" for the solar photovoltaic industry into 
the "world's market." 
 
Investment at Home and Abroad 
----------------------------- 
 
¶4. (SBU) An NDRC official emphasized to us that 
China would increase new energy investments in China 
and overseas, thereby contributing to global energy 
production.  He estimated the total investment in 
the new energy sector would reach RMB 4.5 trillion 
(USD 660 billion) by 2020, much higher than the 
previously planned RMB 3 trillion. 
 
Comment:  A Market for U.S. Exports? 
------------------------------------ 
 
¶5. (SBU) China plans massive investments in 
alternative and clean energy.  While there are 
likely opportunities for foreign firms, the Chinese 
plans emphasize localization and improved domestic 
production.  In fact, part of the emphasis on solar 
and wind technology over other more capital- 
intensive solutions may be explained by the fact 
that these simpler technologies are more readily 
available in China, and have higher local content 
 
BEIJING 00001521  002 OF 002 
 
 
levels.  Most production in solar equipment 
production, for example, is dominated by local 
firms, with around 50 new Chinese companies 
expanding poly-silicon production lines with 
investment over RMB 100 billion (about USD 15 
billion).  Chinese government financing and 
purchasing regulations make it difficult for foreign 
producers to compete.  Foreign companies as a result 
are not competing directly with Chinese manufactures 
for photovoltaic products, focusing instead on high- 
end, more value-added sectors such as design, R&D, 
sales and third party service. 
 
PICCUTA