cuts to support mainly comes from reformist policy-makers themselves. Accelerated
depreciation covers other investments in addition to wind farms, but overall it is
responsible for almost half of India’s foregone tax revenue from the corporate sector
(Bandyopadhyay, 2013), and has come under increasing pressure from a government
interested in fiscal reform. In 2012, the allowance for wind investments was slashed
and the generation-based incentive was cut, leading to a sharp slowdown in new
investment.
3
If wind, and indeed large-scale solar PV investments grow on the scale envisaged
by national targets for renewables, a further negative feedback effect may arise
through competition for land. Early so-called solar ‘ultra-mega power plants’ are
being sited on government-owned land, but clashes over the siting of renewables
in farming communities are not unknown and informed observers argue that without
benefits for local communities this will be a potential problem for the growth of
renewables in future.
4
Against these negative feedback effects, positive effects are also likely to play
some role. India has favoured local turbine manufacturing through import duties,
although its industrial policy for wind has been nowhere nearly as active as China’s
(Lewis, 2011). The leading turbine manufacturer, Suzlon, estimates that the wind
industry is creating around 40,000 jobs a year. Also important, as in Germany, will
be popular ownership of, or participation in renewables, with a large increase in
solar PV on domestic roofs anticipated, partly financed and/or owned by energy
services companies.
China’s wind boom originates from 2003, when the government introduced a
policy of auctioning opportunities to build wind farms on pre-selected sites, with
preferential loans and tax conditions, grid access and other infrastructure provided,
while at the same time placing obligations on state-owned power generation
companies to generate a certain proportion of electricity from wind, and on stateowned supply companies to buy a certain proportion of electricity from renewable
sources (Lema and Ruby, 2007; Lewis, 2011). The approach has incentivized a
very rapid expansion of investment in wind capacity, with less attention to quality.
There have been problems with poor turbine performance, lack of grid access and
poor maintenance, and increasingly frequent incidents of turbine failure (Wang
et al., 2012; Zhang et al., 2013). From 2009, a feed-in tariff policy was introduced
to try to address some of these issues.
The key success of China’s policy has been in building up what is now a globally
successful wind industry through a highly active industrial policy (Lewis, 2011;
Wang et al., 2012; Lema et al., 2013). This has led to positive feedback effects both
through employment (in 2008 an estimated 1 million people were employed in
the Chinese renewables industry, mostly in wind (Li, 2010)) and export earnings.
These effects can be expected to grow further if the Chinese wind industry can
further develop its position and if global wind markets hold up.
As in India, much of the political dynamics of the wind energy boom in China
play out between large energy companies and policy-makers. At the national level,
the state has been keen to promote a wind industry that is now a major exporter.
Political dynamics of green transformations 95
depreciation covers other investments in addition to wind farms, but overall it is
responsible for almost half of India’s foregone tax revenue from the corporate sector
(Bandyopadhyay, 2013), and has come under increasing pressure from a government
interested in fiscal reform. In 2012, the allowance for wind investments was slashed
and the generation-based incentive was cut, leading to a sharp slowdown in new
investment.
3
If wind, and indeed large-scale solar PV investments grow on the scale envisaged
by national targets for renewables, a further negative feedback effect may arise
through competition for land. Early so-called solar ‘ultra-mega power plants’ are
being sited on government-owned land, but clashes over the siting of renewables
in farming communities are not unknown and informed observers argue that without
benefits for local communities this will be a potential problem for the growth of
renewables in future.
4
Against these negative feedback effects, positive effects are also likely to play
some role. India has favoured local turbine manufacturing through import duties,
although its industrial policy for wind has been nowhere nearly as active as China’s
(Lewis, 2011). The leading turbine manufacturer, Suzlon, estimates that the wind
industry is creating around 40,000 jobs a year. Also important, as in Germany, will
be popular ownership of, or participation in renewables, with a large increase in
solar PV on domestic roofs anticipated, partly financed and/or owned by energy
services companies.
China’s wind boom originates from 2003, when the government introduced a
policy of auctioning opportunities to build wind farms on pre-selected sites, with
preferential loans and tax conditions, grid access and other infrastructure provided,
while at the same time placing obligations on state-owned power generation
companies to generate a certain proportion of electricity from wind, and on stateowned supply companies to buy a certain proportion of electricity from renewable
sources (Lema and Ruby, 2007; Lewis, 2011). The approach has incentivized a
very rapid expansion of investment in wind capacity, with less attention to quality.
There have been problems with poor turbine performance, lack of grid access and
poor maintenance, and increasingly frequent incidents of turbine failure (Wang
et al., 2012; Zhang et al., 2013). From 2009, a feed-in tariff policy was introduced
to try to address some of these issues.
The key success of China’s policy has been in building up what is now a globally
successful wind industry through a highly active industrial policy (Lewis, 2011;
Wang et al., 2012; Lema et al., 2013). This has led to positive feedback effects both
through employment (in 2008 an estimated 1 million people were employed in
the Chinese renewables industry, mostly in wind (Li, 2010)) and export earnings.
These effects can be expected to grow further if the Chinese wind industry can
further develop its position and if global wind markets hold up.
As in India, much of the political dynamics of the wind energy boom in China
play out between large energy companies and policy-makers. At the national level,
the state has been keen to promote a wind industry that is now a major exporter.
Political dynamics of green transformations 95