The increasing amounts of Wind Energy and Solar Energy will require elements of a Smart Grid.China’s electricty capacity is going to double in the next 5 years to around 1500 GW from 850-900 GW at present.This will require a huge increase in transmission capacity creating a huge market for electricity equipment giants like Siemens,ABB,Areva and Alstom.China also has the opputunity of creating a a Smart Grid as it builds Transmission Capacity form Scratch.Almost $100 Billion is going to be spent over the next 5 years attracting even IT firms like IBM and Cisco.IBM has already tied up with Chinese cities to roll out a pilot program.Note Smart Grid Technologies are still in their infancy.Chinese investment in Smart Grid will allow development of these technologies giving a huge boost to companies winning Smart Grid Projects in China.The Chinese Market despite its size is a highly competitive market with local companies competing mainly on price.Local companies that are benefiting from the Grid Investment are
The Delhi Mumbai Industrial Corridor (DMIC) which is being jointly developed by India and Japan will also see the development of 24 Green Cities.The ambitious infrastructure project being built with $50-90 Billion will see a freight/railway/road transport corridor between India’s 2 most important cities of Delhi and Mumbai.The resulting development along this transport corridor which will be passing through 6 states will make use of Green Technologies.Japanese Conglomerates like Hitachi,Toshiba,Mitsubishi will be involved in the building of this massive projects and will use their advanced energy efficient technologies to develop these Green Cities.
China has the world’s largest hydro power capacity at 200 GW and it plans to double the capacity by 2020.China is mostly dependent on Coal Power and Hydro Power to meet the electricity demand from its fast growing economy.China has the world’s second largest electricity capacity at 850-900 GW second only to USA at ~1000 GW.This will be soon be overtaken as China continues to grow at 8-10% and its electricity per capita is still much below developed world standards.China is already the world’s biggest consumer of Energy and emitter of Greenhouse Gases.Despite rapidly investing in Nuclear and Renewable Energy,China’s voracious demand has made the growth of Fossil Fuel Energy unsustainable.It already consumes 3 Billion Tons of Coal per year and is already importing around 180 million tons per year.
Toshiba,the Japanese Conglomerate with diversified interests in Electronics,Nuclear Energy Equipment,NAND Memory is leading the Japanese Search for Rare Earth Minerals.Fears of Chinese monopoly over production of REE came true,when Exports to Japan were blocked over a shipping incident.EU and USA have long been concerned with the Chinese control of 95% of the global REE production with USA even thinking of taking China to the WTO.Japan has recently drastically increased its investment into finding new sources of Rare Earth with recent deals with Vietnam,India,Kazakhstan and others.Sojitz, a Trading Zaibatsu recently signed a long term supply deal with Lynas.Toshiba is the other Japanese firm actively scouting for Rare Earth Minerals looking for newer processes and geographies.
Wind Energy Companies are increasingly facing competition from a host of new entrants into the industry.The dominants firms Vestas,Gamesa and Suzlon have seen their stock prices fall steeply due to declining revenues and margins.A number of Giant Industrial Firms have entered the Wind Energy Industry to diversify from the slow growth in their own sectors.Korean Shipbuilders have invested heavily in the Wind Turbine Manufacturing en masse to take advantage of the secular growth of Wind Energy.Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.Companies like Sinovel,Goldwind,Mingyang Power are now trying to spread their wings outside of China.India’s Wind Energy Industry is comparatively small but it has also seen a number of wind power companies setting up facilities with technology licensed from the West.The slowdown in the Western Markets has led to huge problems for dominant Western firms like Gamesa and Vestas.It has led to painful restructuring for Vestas which has fired thousands of workers from its domestic manufacturing base in Denmark.Gamesa has also seen management and ownership turmoil as WTG Orders have evaporated and its competitive position has eroded.GE,Suzlon,Gamesa and Vestas are all investing in the Chinese market which has grown exponentially in recent times and which is expected to form 50% of the Wind Energy Demand till the next few years.
Australian Company Lynas Corporation is going to accelerate the production from its Mt. Weld Mining Project in Australia in order to meet increased demand from Japanese companies.Lynas is building a 20,000 tons rare earth mine in Australia with processing to be done in Malaysia.The company had raised around $500 million with strong institutional backing to boost the supply of non-Chinese Rare Earth Production.The Rare Earth Mineral Frenzy has cooled a bit but the supply picture is still in a constrained mode with Chinese exports of REE falling by 77% in the month of October.Japan is the most exposed to the Chinese slowdown of REE minerals with a large processing industry and consumption sector.Japan has been frantically looking towards the surrounding seas,Vietnam and Kazakhstan as China has used its monopoly position for political ends.