Sunday, August 19, 2018

Enter the Dragon:  China's Renewables Growth Goes Global - by Simon Nicholas

China is establishing itself as a renewables leader in richer nations but is still pushing polluting coal technology in Asia and Africa.

Employees work on the construction of blades at a plant manufacturing wind turbine equipment based in Lianyungang in the Jiangsu province of China. (Credit: Reuters) Click to enlarge.
While China added another 24.3GW of solar in the first half of 2018, equal to total solar installations in India to date where a new transformation is underway, the story of China’s overseas renewables investment, reaching beyond the formal Belt and Road Initiative, remains largely untold.

China’s investment in foreign wind-powered electricity markets has surpassed $12 billion in Europe and Australia alone as private and stated-owned Chinese companies move aggressively to capitalize on fast-growing renewable energy markets, as shown in our new research brief published today.  Most of the wind investment activity has been in Europe, which follows recent trends.

Chinese state-owned independent power producers have acquired big wind projects in nine European countries, aiming especially to diversify their foreign portfolios and gain expertise in offshore wind technology. 

The UK is Europe’s largest offshore wind market, which is set to double by 2030, providing up to a third of the country’s electricity.  Some of the top Chinese state-owned power companies, like State Development and Investment Corp (SDIC) and China Resource Power, are buying interests in wind projects off the eastern coasts of England and Scotland, reflecting a wider trend toward Chinese investment in the UK energy sector.

China is now a driver of the European energy transformation, and its international leadership in low emissions sectors of the future is entirely aligned with efforts to increase China’s global economic influence. 

While Chinese foreign renewable energy investments were boosted by the launch five years ago of its Belt and Road Initiative (BRI), its foreign renewable energy investment now extends well beyond that framework.

IEEFA has already shown that China’s 2017 investment in new energy technology and resources reached $44 billion, up from $32bn in 2016, with investment reaching beyond official BRI nations to include Europe and South America.  This is a superpower taking its energy policy global.

Coal for Developing Nations
There is a flipside.  China’s main misstep in its globalization of energy policy is continuing coal investment overseas despite its own long-term coal decline, which started in 2013, and its embrace of renewables.  While China is establishing itself as a renewables leader in richer nations, it is still pushing its polluting coal technology in developing nations of Asia and Africa.

It’s clear that renewables will be the dominant energy technology of the following decades.  Whether this happens fast enough to avoid the worst impacts of climate change is a separate question, but one which also has reliability of investment implications for the coal industry given that its out-dated technology drives emissions up more than any other sector, making it an increasingly risky bet.

The quicker China embraces the direction energy markets are moving in, the more it can ensure it is the global technology leader others follow. 

Read more at Enter the Dragon:  China's Renewables Growth Goes Global

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