Planning agency sets out investment scale for 15pc target on alternative energy The renewable energy sector needs investments of two trillion yuan for the mainland to reach its goal of having 'green power' comprise 15 per cent of total energy use by 2020, according to the top planning agency. The National Development and Reform Commission said in a report that the mainland planned to increase the use of renewable energy from the current 8 per cent to 10 per cent by 2010, reaching 15 per cent 10 years later. 'We will adopt measures to guide and encourage the development of renewable energy. We will come up with various taxation and fiscal incentives, including subsidies and tax breaks,' said Chen Deming, a deputy director of the NDRC. Developing renewable energy was also a way to provide electricity and fuel to people living in remote areas, Mr Chen said. Last year, coal accounted for 69 per cent of the total energy production on the mainland, the report said. The NDRC's power generation target for renewable energy, outlined in the report, is slightly lower than the original version discussed in June by the State Council. The old version expected renewable energy to account for 16 per cent of all energy consumption by 2020. The 2020 targets for electricity generated by hydropower and biomass were increased to 300 million kilowatts from 290 million KW and to 30 million KW from 20 million KW, respectively. The solar energy contribution was reduced to 1.8 million KW from two million KW, while wind power would contribute 30 million KW, the same as in the previous version. The commission estimated that hydropower would need investments of about 1.3 trillion yuan and biomass about 200 billion yuan. Wind power and solar energy would need 190 billion yuan and 130 billion yuan, respectively, the report said. An additional 190 billion yuan would be required for marsh gas generation in rural areas. Energy analysts see the commitment by the government as a key driver in the renewable energy sector. When the original targets were announced, China International Capital Corp estimated that hydro generation would see a compound annual growth rate of 6.2 per cent, while wind, biomass and solar power would expand between 16 per cent and 25 per cent annually. The commission said economic incentives and previous policies had been insufficient to promote the long-term development of renewable energy. 'Most of the renewable energy technologies involve higher costs, making the price of electricity generated uncompetitive,' the NDRC report said. 'They need support from policies and other encouragement.' Last month, Beijing issued a policy to regulate how power grid companies acquire electricity generated from renewable energy.