For the last seven years, the Chinese government has been working towards the promotion of low carbon energy technologies. In 2009, the government focused on the ‘indigenous innovation’ policy that was aimed at adopting and developing ultra-modern technologies in almost all its sectors. This paper seeks to discuss four managerial dilemmas that such technology standards have posed.
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Analysis of the Case
Competition by the US
China has been facing stiff competition from the United States of America. Having been confronted with an intense congressional criticism concerning solar subsidies, the US the administration headed by President Obama was worried about the China’s new energy policies (Vietor 1). In turn, the US government resorted to saving its energy competitiveness by upgrading its technology standards to be ahead of China (Urban and NordensvaÌˆrd 200). In 2011, the installation of the three wind turbines in Minnesota caused a 42% increase in the import of the Chinese solar cells by the United States with over 30 times exports of the US solar energy going to China (Lewis 78; Vietor 5). The situation forced China to develop low carbon sources within the country.
Poisonous Carbon Emissions
China needed a lot of energy because its population was growing faster year after another. For instance, the electric generation was powered by hydropower and coal. With coal production, 100 million tons were imported while 3.7 billion tons were obtained from within country. However, the country has worked hard to raise 4.1 billion tons. Ideally, this figure is closely four times the amount produced by the United States of America. China also burns natural gas that is mostly imported at an approximate rate of 8.6 billion barrels of petroleum in a single day. This amount has been more than half of what the country imports. Consequently, the situation has resulted in increased carbon dioxide emissions. Consequently, the ‘western’ countries have become much concerned about the issue of climate changes that have in turned pressed China to work on reducing its poisonous carbon emissions (Vietor 5).
Pressure by the International Atomic Energy Agency
In 2011, China had 14 operational nuclear reactors of about 11,000MW. About 25 of them were under construction while others had been planned to be executed later. The nuclear power was entirely under the watch of the China National Nuclear Corporation. Therefore, besides nuclear safety being regulated by the National Nuclear Safety Administration (NNSA), it was audited by the review teams of safety from the International Atomic Energy Agency or the World’s Association Nuclear Operators (Desai and Potter 67).
In 2011, an accident occurred that called for immediate safety checks on the construction reviews that were performed from time to time. As a result, new approvals were to be suspended pending review of the lessons learned during the incident. When assessing China’s nuclear policies, the Center for Strategic and the International Studies enforced four elements that were considered primary. First, it emphasized pressurized power reactors for future generation. Secondly, it pointed out the maximizing of domestic manufacture of the equipment and plants as other key aspects of nuclear energy. Finally, the element of becoming self-reliant in terms of design and project management was vital. However, based on the review, it was unreasonable to enlarge the mentioned observations to cover all the renewable energy policies in China.
Low Quality Production
In 2010, China suppressed the United States’ wind market since many Chinese companies were collectively involved with the manufacture of blades and turbines. However, many of the companies produced small and dubious quality turbines. The greatest challenge that was experienced during this period involved mass wind power production that led to low profitability because of the witnessed compromised quality of products. Additionally, the companies faced a problem in accessing the electrical grid.
The US was hesitant to buy the turbines from China, even though the prices were competitive. In addition, the EU was concerned about the low-ball bids and the negative profitability that disregarded the issue of maintenance, quality, and performance (Zhou 278). With the biggest challenge being access to electrical grid, China managed to raise the growth of the turbine installations annually at 60%. However, this situation caused a rapid drop of the electrical grids to a level that was below its ability to absorb the fluctuating output power. In places such as Inner Mongolia where wind power grew fast, the inadequacy of the grid left many turbines inoperative. The National Energy Bureau ended up burning wind construction, especially in regions, which had over 20% installed capacity not in use.
How China addressed the Dilemmas
China produced 3.7billion tons of coal. In turn, severe problems of air pollution resulted from carbon emissions. The government was quite aware of the situation. Therefore, it put in place major initiatives to lower the intensity of carbon and/or curb the issue of carbon emissions. Compared to the US and other European countries, China wanted to generate more power that was efficient to capture the released carbon dioxide. In accomplishing the plan, the country used super- efficient boilers, which deployed the gasification method that was combined with cycle generation technology whose goal was to reduce the emissions of Carbon Dioxide (Lewis 45). However, the expertise was expensive. Other engineering companies in China such as Siemens and Alstom companies worked towards capturing the emitted Carbon Dioxide by scientifically creating a fluid that could easily be injected into unfathomable underground wells.
In addition, in response to the competition posed by the US, the Chinese government placed two billion Yuan for research and advancement, as well as for establishing a 250MW IGCC Plant (Vietor 7). Later, another 3 billion Yuan was set aside to start a GreenGen Project whose goal was to carry out studies that could help to establish ultra-modern low-production coal-based energy creation (Urban 89). Besides, China has devoted all its abilities to promoting the development of the renewable source of energy technologies to cut down the costs it has been incurring in importing energy from countries such as the US. China targets to achieve a situation where it will domestically provide the main renewable energy equipment that is used in the country. However, it has to meet a set of goals by 2020 to acquire the home-based intellectual property privileges that are accorded to all local manufacturing plants.
The analysis of carbon innovation in China clearly brings out primary differences that are associated with low carbon technologies. The level to which the country’s companies are moving towards the international frontier largely varies. Clearly, the Chinese technological ability is strong in terms of market technologies such as the fired plants with wind technologies. Early stage technologies, including the electric vehicles and wind turbines, significantly point out some loopholes that have resulted in the discussed dilemmas that the country has faced. Despite China being the second largest economy in the world and the leading energy consumer, it suffers several development challenges, especially when it comes to addressing energy demands for its low-income population. However, as the paper has revealed, China has managed to address some of the dilemmas.
Desai, Vandana, and Robert Potter. The Companion to Development Studies, London: Routledge, 2008. Print.
Lewis, Joanna. China’s Wind Power Industry and the Global Transition to a Low-Carbon Economy, New York: Columbia University Press, 2013. Print.
Urban, Frauke, and Johan NordensvaÌˆrd. Low Carbon Development, London: Routledge, 2013. Print.
Urban, Frauke. Low Carbon Transitions for Developing Countries, London: Routledge, Taylor & Francis Group, 2014. Print.
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Vietor, Richard. Low-Carbon, Indigenous Innovation in China, Boston, MA: Harvard Business School. Print.
Zhou, Yu. China as an Innovation Nation, Oxford: Oxford University Press, 2016. Print.