German energy firms try to benefit from China's green revolution

There's a green revolution going on in China. The biggest consumer of energy already invests more in renewable energies than the US and Europe put together and it is the fastest-growing market for hydropower and wind and solar energy.

Meanwhile, Germany is the world market leader for green technologies. At first glance, this would make the two nations ideal partners. However, they are also competitors – especially in the field of photovoltaics. Last year, China's market share grew by 40 percent whereas Germany’s decreased by 15 percent. This is because the quality of Chinese products has improved considerably.

Sven Krug is from the Stuttgart-based company Sinosol, which buys solar products in China and sells them in Europe. He says China is fast catching up, with every second solar panel now being installed on a German roof coming from the People's Republic.

He rejects the argument put forward by certain German manufacturers that Chinese firms have unfair advantages. "Take a look at the German map and where most of the solar companies are. They are in East Germany where there were massive state subsidies so as to attract the companies. Chinese companies today have the same advantages that these German companies had a few years ago."

German companies have some openings

However, this does not mean that German energy companies have no chance in China, he adds they can provide technology and they can get involved in the planning stages.

The planning of solar parks for instance. Daniela Bartscher-Herold, a consultant based in Munich, says there is one sector where German companies have a good opening: "In the field of technology-driven components and systems. This is true for wind and solar energy, as well as for hydropower too."

However, even if German companies might have innovative technologies, the likelihood of them being awarded a contract when there are public tenders in China is still limited, says lawyer Ji Hailong: "A foreign company can take part in tenders. But the reality is that Chinese state companies usually get the contracts. So joint ventures with a Chinese partner are imperative."

Cooperation is the way forward

Bartscher-Herold agrees that cooperation is the only way forward for German companies and that "teams made up of good Chinese networkers and good European or foreign experts who bring technical competence to the contract have to work together when they participate in tenders."

A recent German government study found that by 2020 the turnover from green technologies will have doubled worldwide.

This means that there could be enough for everybody in the end – benefitting not only Suntech, Yingli and Goldwind from dynamic China but also Solarworld, Nordex and Repower from strong, traditional Germany.

Author: Danhong Zhang
Editor: Arun Chowdhury