Green energy indicates this kind of energy sources which have less negative impact to the environment than traditional energy sources like petroleum, natural gas and coal. The aim of green energy is creating power with less pollution. The demand and importance for green energy is increasing significantly as our traditional sources of energy is decreasing rapidly. So investment in green energy is a wise investment for the investors.
Investment in green energy
Before selecting the investable green energy project in china we must analyze the overall green energy market, demand and profit potentiality. The current situation and prospect of china green energy market are given below:
Since 2009 china has invested around U.S. $50 billion annually into its renewable energy sector. It has expected that china's environmental protection industry will be top U.S. $317 billion.
For the development of green energy practices and industry, china is planning to introduce a favorable tax and financial policies. It will build a fund raising environment for this purpose.
Chinese green energy companies are in difficulties regarding financing their profitable project for capital markets. They largely depend on the government fund and subsidy.
China set a target to get above 11% total energy production by 2015.
For foreign companies and investors merger and acquisition is a favorable way to do business in green energy sector in china. China are looking and at capitalization of foreign technology and expertise (Lee, Lee and Lee, 2009, Marney and Tarbert, 2009).
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The green energy industry in china is very profit potential...
So investor may invest in any of the following 4 major green energy sectors.
Wind power sector
Solar power
Hydro power sector
Biogas
Solar power
In china solar energy is accounted for less than .01% of total domestic production. China is the major player in the international solar power both in terms of consumption and solar power's absolute production. Under the golden sun program government of china provides subsidies on investment in this sector. China quadrupled a domestic installation goal for sun derived energy projects to 21 gigawatts by the year 2015 (Jeffs, 2010).
Wind power
China
wind power is becoming the single largest driver for global wind power development with a total install wind power capacity of 44.5 gigawatts..
in china it has been observed that from 2004 to 2010 the compound annual growth rate of the wind energy sector was 134% this is equal to 13.8 gigawatts additional energy.
China government special attention and favor on this sector. Along with all other tax incentives the china government announced a tax rebate of 50% on self-manufacture electric power generated from wind power. The tariffs are set at RMB 0.51, RMB .54, RMB .58, RMB .61 for per kilowatt hour. Because of regulation it is difficult for direct foreign investment. But growing competition is allowing many foreign investors to involve in this sector through M&A and JVs.
Hydropower
According to market research china has total 213 gigawatts install hydropower at the end of year 2010. It is expected that chin's installed hydropower capacity will reach at 380 gigawatts by the year of 2020. Foreign investors can invest in hydropower equipment production, construction material and operational support services, improvement of technology, and technology transmission (Jeffs, 2010).
Biogas
In china bio gas is considered to be an important source of renewable energy sources. China needs to build installed biogas digester for utilizing about 500 million of animal waste annually. State government of china has mandated the installation of biogas digester for farms with over 100 cattle, 10000 pigs, or 100000 chickens (Jeffs, 2010).
Geothermal
Investment in geothermal energy sector in china is also a lucrative for investors. China has huge geothermal resources. Recently 49.17 billion cubic meters of underground hot water resources have been identified in the central eastern china. In…
