China Still Holds Commanding Lead in Global Clean Tech Race

China Still Holds Commanding Lead in Global Clean Tech Race

Wind turbines -- CC licensed by Flickr user Scott Ableman

China's production of scientific knowledge is now second only to the U.S. It is the top manufacturer of both solar PV and solar hot water heaters, and was also the largest installer of new wind farms in 2009. Over the next 10 years, China may dump a staggering $660 billion into its clean energy build-out.

But while China is leading the global clean tech race, the competition isn't over, according to research firm Clean Edge.

"It's too early to declare China the de facto winner," Clean Edge Co-Founder and Managing Director Ron Pernick said during a teleconference Tuesday launching the 2010 Clean Energy Trends report. (Full disclosure: GreenBiz.com Executive Editor Joel Makower is a co-founder of Clean Edge.)

The annual examination of the state of global clean energy found the U.S., Europe, Japan, China and other parts of Asia battling to dominate the various clean energy sectors, which are now considered to be among the leading forces driving a global economic recovery.

The solar photovoltaics (PV) and wind power industries employ more than 830,000 people worldwide directly and indirectly, and up to 3.3 million by 2019, the report found.

Worldwide revenue of (PV), wind power and biofuels expanded 11.4 percent in 2009 to $139.1 billion, despite the economic recession. A year ago, the firm estimated revenue would remain flat in 2009, or even decline. Clean Edge predicts revenue for PV, wind and biofuels will grow to $325.9 billion within 10 years.

Clean energy investments dipped in 2009, but were tempered by a variety of government-funded initiatives. In the U.S., all venture capital investment declined in 2009, and clean energy projects were no exception. Roughly $2.2 billion in venture capital was directed toward clean energy in 2009, down from $3.2 billion the year before. This represents 12.5 percent of all venture capital -- the largest percentage on record.

The report identified five trends that will most heavily influence clean energy markets in the years ahead:

1. The emergence of carbon as a feedstock used for a range of products, including cement, plastics, asphalt and algae for biofuels.

2. The falling price of solar PV technology, which promises to redefine the industry. For the first time, PV revenues dipped in 2009 because of the rapidly falling costs -- from $7 on average peak watt in 2008 to $5.12 peak watt last year.

3. Biomass as an energy source grows in prominence, but it comes with a slew of issues related to land-use, emissions and economics.

4. Clean tech megaprojects entering the pipeline, but not without significant challenges. Abu Dhabi's Masdar City is delayed, for example, while China's Dongtan eco-city appears to be scrapped. Other mega projects, however, are gaining steam in China.

5. High Speed Rail plans accelerate, with the U.S. and China leading the way in new development. China plans to spend $300 billion connecting all the countries major cities by 2020; the new high speed rail added in the country over the five years will exceed the rest of the world combined.

Despite China's aggressive clean energy push, it faces many hurdles, the report said. No one country will dominate all clean energy sectors, China must still contend with significant pollution and compliance issues, and there is no true free flow of information.

"China will likely address all, or many, of these issues, but it still faces significant obstacles to global domination," the report said. "In the meantime, other nations interested in leading the clean tech race, like Germany, Japan, and the U.S., will need to compete aggressively in the face of a rising China."

CC licensed by Flickr user Scott Ableman.