Image
Wind farms are increasingly common in Asian countries such as China and S Korea. Photo by Leong Chan Teik in S. Korea

SOME OFFICIALS with a UN program have suspected for some time now that something funny might be blowing in the wind in China’s alternative energy sector.

The Executive Board of Clean Development Mechanism, a UN body, has since this summer cancelled carbon credits for some 50 wind farm projects in China, Mandarin-language Caijing online reported.

This is due to allegations of possible manipulation of an “additionality” clause in the mechanism that allows funding from developed nations to so-called “developing nations” like China for alternative energy projects that would not ordinarily break ground if not for CDM aid.

With China’s economy one of the fastest growing in the world, and its leapfrogging of France, the UK and Germany in the past half decade, it seems that those controlling the purse strings of CDM money are starting to look a lot closer at recipient need.
Image
Singapore-listed solar firm Anwell may benefit from the recent halt in CDM project approvals for Chinese wind farms. Photo: Anwell

The PRC publication said as the upcoming climate conference in Copenhagen, the Executive Board has put in place a temporary halt in approvals for CDM-worthy wind farms in China due to suspicions of China’s industrial policy manipulations in winning the development aid targeting renewable energy sources.

“At least 50 wind farm projects have had their approval put on hold,” Caijing cited an industry insider as saying, with officials at other wind power firms in the country saying they were not surprised by the CDM decision.

The publication said that Executive Board head Lex de Jonge had confirmed that "a handful of (Chinese) projects" had been suspended, but declined to provide reasons.

The Board said that it was concerned subsidies from Beijing were being replaced by the CDM credits, and that most if not all of the wind farms on the drawing board would have been constructed in China, with or without the UN assistance.

However, another Chinese expert was cited as saying that if the Board made the most recent move in an attempt to set parameters for energy prices in developing nations, then leaders in these affected countries would no longer place as much importance on the benefits of CDM credits and the UN’s global emissions reduction campaign would suffer as a result.
Image
Sunny prospects? Chinese solar firms like Anwell could be the unintended beneficiaries of a recent freeze in CDM credits to the country's wind farms. Photo: Internet

Winds of change?

The jury remains out on whether China is manipulating the somewhat arcane and hard-to-prove (or disprove) “additionality” clause in order to amass as much “free money” from industrialized nations for its wind farms that it would ordinarily dip into its own domestic coffers and ballooning forex reserves to fund.

Over the past half-decade, China has been the biggest CDM recipient, a carbon trading scheme intended to siphon funds from the “rich” countries to “developing” states like China in order to reduce greenhouse gas emissions.

Wind farms only qualify for credits if the candidates can prove they would not have been constructed anyway, a condition known as "additionality."

The CDM monitors suspect that Beijing may be cancelling or reducing planned subsidies for wind farms in order to give the appearance of financial need, thus winning more approvals for CDM credits.

So far at least, wind farms have been in the crosshairs of CDM approvals, though the UN funds are earmarked for a variety of renewable energy projects.

Whatever the outcome of the accusations, next week’s UN climate conference in the Danish capital is likely to devote quite a bit of attention to the story, and may result in ramped up calls for the CDM project approval regime’s overhaul.

Several Chinese wind and solar firms are listed in Singapore and Hong Kong.

Related story: ANWELL: "My take on its solar biz prospects"


Share Prices

Counter NameLastChange
AEM Holdings1.1300.030
Alliance Mineral0.125-0.003
Anchor Resources0.014-
AusGroup0.027-
Avi-Tech Electronics0.2850.015
Best World Int.1.360-
China Sunsine1.1400.010
CSE Global0.480-0.005
Food Empire0.495-
Geo Energy0.157-
Golden Energy0.2050.005
GSS Energy0.0840.003
HMI0.715-
ISDN Holdings0.235-
KSH Holdings0.420-
Miyoshi0.043-
Moya Asia0.076-
Nordic Group0.2900.005
Oxley Holdings0.330-
REX International0.0680.001
Riverstone0.915-0.005
Roxy-Pacific0.390-0.005
Sing Holdings0.405-
SingMedical0.380-0.005
Sino Grandness0.0500.004
Straco Corp.0.755-0.005
Sunningdale Tech1.4000.010
Sunpower Group0.480-
The Trendlines0.078-0.002
Tiong Seng0.230-
Uni-Asia Group0.7550.010
XMH Holdings0.153-
Yangzijiang Shipbldg1.5200.010

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 2003 guests and no members online