The Chinese government has ordered over 2,087 firms in high-polluting and energy-intensive industries to shut down outdated plant by the end of September. Companies that fail to do so risk having bank loans frozen, approvals for new projects and land purchases refused and their electricity cut off.

Companies effected produce steel, coal, cement, aluminium, glass and other materials and include plants owned by China’s biggest steel maker, Hebei Iron and Steel Group, and  the nation’s biggest aluminium maker, Aluminum Corp of China.

The reason for the dramatic action is that China’s average energy consumption per unit of gross domestic product rose marginally (by 0.09%) in the six months to June. This is the first year-on-year increase since 2006 but the Chinese Government is concenrned that it will make it more difficult for the nation to meet its goal of cutting energy consumption by 20 percent per unit of GDP between 2006 and 2010.

China has signed an agreement with the California company, eSolar, to build a 2,000 megawatt solar thermal power plant in the Yulin Energy Park in the Mongolian desert in northern China.

Four months ago, an Arizona company, First Solar, secured a contract to build an equally large photovoltaic power plant just 80 kilometres south of the new location. Before these announcements, the largest solar electricity projects were a 550 megawatt plant to be built by First Solar in California and a 500 megawatt solar thermal plant being developed for the US Army in the Mojave Desert.

In addition to the planned solar power plants, wind farms with a total capacity of about 6,000 megawatts are planned for Inner Mongolia.

The new project will also include a biomass power plant to generate electricity when the sun is not shining. The biomass plant will use a local shub, the sand willow, which has been planted in the region to fight desertification. The solar and biomass plants will share turbines and other infrastructure, reducing the project’s cost and allowing around-the-clock electricity production.

China’s national assembly has signalled the country’s commitment to reducing greenhouse gas emissions by adopting a law supporting its renewable energy industry. The new law obliges electricity companies to buy all of the power produced by renewable sources.

The State Council’s energy department, the electricity regulatory agency and its finance departments will determine the amount of renewable energy available in the country’s overall power generating capacity. Power companies will be obliged to take up all of that capacity. Any company refusing to do so will be fined an amount up to double that of the economic loss of the renewable energy company.

A team of environmental scientists from Harvard and Tsinghua University have demonstrated the enormous potential for wind-generated electricity in China. Using extensive meteorological data, the researchers have estimated that wind alone has the potential to meet the country’s projected electricity demands for 2030.

While wind-generated energy currently accounts for only 0.4 percent of China’s total electricity supply, the country is rapidly becoming the world’s fastest growing market for wind power.

The researchers, led by Michael B. McElroy, Professor of Environmental Studies at Harvard’s School of Engineering and Applied Sciences, used meteorological data from the Goddard Earth Observing Data Assimilation System at NASA. They assumed the wind energy would be produced from a set of land-based, 1.5-megawatt turbines operating over non-forested, ice-free, rural areas with a slope no more than 20 percent.

The analysis found that a network of wind turbines operating at just 20 percent of their rated capacity could provide as much as 24.7 petawatt-hours of electricity annually – more than seven times China’s current consumption. This would meet the country’s entire projected demand for electricity for 2030.

To do this would require an investment of about $900 billion over twenty years. This is not considered an unreasonable sum considering that it would replace China’s investment in fossil fuel plants. China is currenly adding about one gigawatt of fossil-fuel generating capacity every week.

American solar photovoltaic panel manufacturer, First Solar, has signed a memorandum of understanding with China to partner on a 2,000-megawatt power plant in Ordos City, Inner Mongolia. This follows an agreement signed last month for Canadian Solar to develop a 500-megawatt solar power plant in Baotou, Inner Mongolia.

Before these announcements, the largest solar electricity projects were a 550 megawatt plant to be built by First Solar in California and a 500 megawatt solar thermal plant being developed for the US Army in the Mojave Desert.

In addition to the planned solar power plants, wind farms with a total capacity of about 6,000 megawatts are planned for Inner Mongolia.

The surge in Chinese power plant investment has come as a result of China’s $586 billion economic stimulus package which included an estimated $70 billion for improving the country’s electricity grid.

According to the market research company, The Information Network, the wholesale price of solar panels has dropped from $US4.05 per watt a year ago to $US1.85 today. The company predicts that the price could drop below $US1 per watt next year and be as low as $US0.50 per watt in 2011.

The main reason for the falling price is increased manufacturing capacity in China combined with decreased demand during the global financial downturn.

Not only has Chinese competition directly forced lower pices but European countries have begun scaling back their subsidies because the funds were increasingly going towards imports from China rather than supporting local manufacturers.

The Informatioin Network predicts that as many as half of the more than 200 solar manufacturers in the United States will not be able to survive if prices remain below $US2 per watt.

Car sales in China in April were 25 per cent higher than in the same month last year – and for the third month in a row, car sales in China exceeded those in the United States.

The sales boom has been attributed to the Government’s halving of sales tax on small, fuel efficient cars.

One of the beneficiencies of the sales boom has been General Motors’ Chinese subsidiary whose monthly sales were 50 percent higher than last year.

Results such as this have led to speculation that Chinese car companies are seeking to take over Western car manufacturers at current bargain prices. Chinese manufacturers have tried to dampen this speculation by issuing official denials that they are bidding to buy Ford’s Volvo and General Motor’s Saab divisions. However, Chinese companies have already purchaseed the Australian gearbox manufacturer, Drivetrain Systems, and the French diesel engine manufacturer, Moteurs Baudouin  Meanwhile, the Indian Tata Motors has acquired Jaguar and Land Rover.

The Chinese government has announced what observers are describing as the most generous and aggressive power subsidy in the world.

China is offerring 20 yuan (about $au4.30) per watt for solar voltaic installations greater than 50 kilowatts. This would amount to about half the cost of the installation.

China has built up a sizeable solar industry based almost entirely on exports but several large-scale domestic solar power projects have been announced in the past year – including a 1 gigawatt power plant in Qinghai’s Qaidam Basin that would be the world’s largest photovoltaic project.

The Chery Automobile Co., China’s largest maker of own-brand cars, has unveiled its first plug-in hybrid.

Chery claims that its S18 can travel 150 kilometres using just its batteries – compared with 64 kilometres claimed for General Motors’ Chevy Volt, due to go on sale next year.

The S18 can be fully charged in as little as four hours and be 80 percent powered via a quick charge at a specialist station in 30 minutes.

Chery will be China’s second mass manufacturer of plug-in hybrid cars, following BYD Electronics which already has a model on sale. BYD’s F3 DM can run for 100 kilometers using only batteries. It takes as little as seven hours to fully charge and can be 50 percent powered via a quick charge at a specialist station in just 10 minutes.

Two Chinese companies have announced plans to build a solar photovoltaic power plant in northwestern China that will eventually supply 1,000 megawatts of electric power.

China Technology Development Group Corp and Qinghai New Energy Group will begin building the first stage -  a 30 megawatt solar power station – in China’s Qaidam Basin this year with an initial investment of $150 million. No timeframe for completion of the full project has yet been announced.

The largest solar photovoltaic plants currently operating are the 60 megawatt Parque Fotovoltaico Olmedilla de Alarcon and the 30 megawatt Parque Solar Merida/Don Alvaro, both completed in September 2008 in Spain. American companies Optisolar and PG&E have announce plans to construct a 550 megawatt photovoltaic power station in California.