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"Overcapacity" in new energy sector sparks controversy
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14:58, September 07, 2009

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New Energy Int'l Forum Chengdu with the theme "opportunity and challenge to solar photovoltaic industry" was held on September 4 and 5. New energy "overcapacity" in polysilicon and wind power turbine industries sparked controversy at the forum.

Zhu Hongren, chief engineer at the Ministry of Industry and Information Technology (MIIT) warned on August 26 that under the impact of the international financial crisis, repetitive construction and overcapacity in solar, wind energy and other emerging industries have become increasingly serious.

However, experts argued at the forum that overcapacity in the polysilicon sector only represents overcapacity in low-end products. There are also experts suggesting that there was and would be no overcapacity in China as long as energy and environmental problems are finally solved.

Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission (NDRC), said that development of new energy has been established as an important strategy for China to address climate change and develop a low carbon economy. "But the polysilicon industry should avoid repetitive construction in low-end projects."

Li noted that Vice Premier Li Keqiang had said that China should continue its industrial restructuring and develop new energy and environmentally-friendly products at a symposium on the financial support of the development of some new industries.

In recent years, excessive profits in polysilicon industry have attracted massive investment by a crowd of enterprises. China's State Council has warned of overcapacity in emerging sectors such as wind power and polysilicon, but this does not mean that the government will "restrain" the development of new energy sector. Li said that China produced 5,000 tons of silicon products in 2008, while consumption totaled 30,000 tons. "China's silicon output may reach 15,000 tons this year, and there is no overheating."

Overcapacity in new energy sector was a "pseudo proposition", said Zeng Shaojun, secretary-general of China New Energy Chamber of Commerce. Traditional energy supply is not sustainable and new energy only accounts for a very small portion in China. Meanwhile, environmental pressure is mounting.

China's polysilicon output would be far from sufficient if the country opened its power generation market to photovoltaic power plants, Zeng said. "New energy sector is just like a toddling baby and needs help, for example, finance subsidy."

By People's Daily Online

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