75% of survey participants are optimistic about greentech markets
Renewable energy, green building and clean water segments are favoured
A number of important opportunities in China’s cleantech scene have been identified in the just-released China Greentech Report 2012. The report cautions that given the rapid changes underway in the greentech sector, market conditions and opportunities can change quickly too.
In last year’s report, China Greentech Initiative (CGTI) – the body that produces the annual report now in its third edition – identified renewable energy, cleaner transportation and clean water as the most appealing subsectors from the overall perspective of government policy, openness and solution attractiveness.
These assessments were confirmed by trends visible in 2011, with the exception of high-speed rail, where growth and investment slowed significantly after a major accident in the middle of that year.
These are the opportunities that are most attractive for this year:
• Cleaner conventional energy: Natural gas infrastructure, distributed gas power, power plant mercury monitoring and control, coal-bed methane and advanced nuclear power.
• Renewable energy: Moving photovoltaic module production overseas, retrofitting wind turbines for higher output and biogas production.
• Electric power infrastructure: Intermittent power management, distributed energy management, energy storage, charging infrastructure and grid communication networks.
• Green buildings: Green building design, building energy retrofits, green building material supply, integrated energy-efficiency solutions and green building energy management.
• Cleaner transportation: Advanced drivetrains, battery raw material supply and commercial vehicle emission control systems.
• Clean water: Wastewater and sludge treatment, water-use efficiency equipment and water-quality monitoring technologies.
Which areas will oﬀer the highest investment returns over the next three years?
Source: CGTI analysis, China Greentech Report 2012
“Given the speed at which greentech markets are evolving, 2012 will undoubtedly be another period of surprises and setbacks. Yet it seems clear that despite challenges, China’s greentech market is healthy and developing rapidly, propelled by government policy and urgent needs,” the report says.
Importance of policy
An investment climate survey of 133 partners and members of CGTI – including investors, technology solution providers, technology buyers and other market participants – showed that they were very positive about greentech markets, with over 75% either optimistic or very optimistic about the near-term future.
Respondents were mainly business unit executives or other top-level managers – and a full 14% were company CEOs. By region, most responses came from mainland China (36%), the US (30%) and Europe (24%), with other regions accounting for the rest.
They favoured the renewable energy, green building and clean water segments of the market, and cited offshore wind and solar as the most attractive renewable fields.
Said the report: “The survey’s more important result was participants’ views on the nature of China’s greentech markets. Respondents overwhelmingly agreed that government support is the main factor driving greentech investment, and that obstacles related to government programmes were the main impediments. Resource scarcity, resource prices and energy security concerns were also major factors driving investment in greentech markets.”
Other findings on what the respondents felt were the most critical areas include the following:
• Industrial policies related to strategic emerging industries (SEIs)
• Targets in renewable energy, emissions and carbon intensity.
Policies on water, nuclear and oil were viewed as less important to respondents. On why the respondents viewed investing or doing business in China’s greentech markets as attractive, the main motivation is the high level of investment in the field, rather than the large market or prospects for good profit margins.
“Indeed, the importance of high investment levels to business interest in greentech underlines the potential for volatility in this field,” the report says.