- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.
In recent years China has become one of the world’s leaders both in clean energy investments and renewable energy. China’s dominance in renewable technology, investments, as well as in manufacturing, has expanded over the past decade, a fact addressed in U.K. accountancy firm Ernst & Young’s report in 2017. The report shows that China ranked top of the list in renewable energy investment in an annual ranking of top forty renewable markets, surpassing that of the U.S. as the previous leader worldwide.
To further push renewable investment in the country, China enacted the Renewable Energy Law back in 2005, which further improvements made in an amendment in 2009. The International Energy Agency’s 2016 figure shows that China holds 40 percent of wind, 36 percent of hydropower and 36 percent of solar PV capacity in the world. With the anticipated higher growth in the future, China’s role can potentially be at the forefront of development in the global renewable industry.
China’s governmental policy to support the development of renewable energy originates from its tenth five-year plan, which covered the period ranging from 2001 to 2005. This plan was a catalyst in initiating various renewable energy investment programs in China such as the Brightness Program, the goal of which was to bring electricity to rural areas, and the Ride the Wind Program, which aimed at supporting the manufacture of wind turbines in the country to create a modernized economy while providing employment and cleaner energy with lower energy import dependence.
Although the tenth five-year plan was vital for the greater role that renewable energy could play, no specific objectives were targeted, rather sustainable economic development with the support of clean energy and its promotion was highlighted.
In 2014, China invested approximately $90 billion for its renewable capacity - an increase of 32 percent from the previous year, surpassing the next largest investor - the U.S.’ renewable investment by 70 percent. In conjunction with ‘The Silk Road Economic Belt’ initiative, which aims at expanding trade and integrating infrastructure, $20 billion worth of renewable investment was initiated in 2015.
The trend towards stronger green energy can also be seen in its thirteenth five-year plan. The plan involves the acceleration of dispersed wind power and the distribution of solar PV in the country, as well as prioritizing the expansion of hydropower in the southeast of China by beginning the construction of 60 gigawatts (GW) of capacity.
Furthermore, China’s National Energy Administration’s thirteenth Renewable Energy Development Plan, covering 2016-2020, is worth considering, given its ambitious target of installing 210 GW in wind capacity, increasing overall renewable capacity up to 680 GW as well as increasing the share of renewables in primary energy consumption to 15 percent in 2020. Among various targets aimed at in the plan, some other objectives also cover the development of innovative technology and the promotion of offshore wind and ocean power development.
To build up a stronger renewable market in China, the government announced in 2017 that they would spend $360 billion over the next four years. As China moves steadily towards meeting the commitment of the Paris Agreement, the new wave of renewable energy investment in China added more generated capacity than fossil fuel-based energy generated for the first time in 2016. And currently, China’s total electricity generation capacity from various renewable sources - wind, hydro and solar - has increased from 21 percent to 31 percent in just a decade.
To further accelerate the development of renewable energy projects in the country, China will soon introduce a quota system, in which each province needs to ensure that a certain percentage of electricity comes from wind, solar or biomass. This initiative will strengthen China’s already well-settled grid system and encourages further efforts to build up non-hydro renewable energy capacity to meet the requirements set in the quota system.
The impressive growth achieved in the field of renewables in China has not only taken place domestically, but increasingly Chinese companies are looking overseas for opportunities. Particularly following the rapidly growing domestic renewable sector in China in the last decade, the market faces slower growth right now, which has forced Chinese companies to look abroad for opportunities to expand their market share. As a result, Chinese companies purchased and acquired big projects in various countries such as a 150 MW wind project in Texas and a wind energy project with a total capacity of 600 MW secured in Mexico.
With the undoubtedly vast potential for renewable energy production, China is turning to this mode of energy. China’s growing global leadership role in renewable energy is evident in its ambitious targets set in the Energy Development Programs and in investments made in the country. The new wave of investment plans will not only energize the global market by further cutting costs, but it will also set a benchmark for other countries around the world to transition towards clean energy.
As the largest energy user in the world, China’s choice will have a major influence on the rest of the world.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.