RenewEconomy
rss
3
China further cementing its clean energy dominance
By Simon Nicholas on 11 January 2018
Print Friendly, PDF & Email
IEEFA’s latest report finds that China continued to set itself up to dominate clean energy sectors during 2017. During the year, much attention has been paid to its record breaking domestic solar installation of at least 50 GW, reorganisation of its power utilities and carbon trading plans. However, China also has one eye on international power markets.
A key development during the year was the decision by President Trump to pull out of the Paris climate agreement. Given cover by the U.S. to reduce its own commitment to Paris if it wanted to, China was quick to reaffirm its emissions reduction pledge.
The withdrawal of the U.S. along with an increased U.S. government emphasis on coal and away from renewables is at odds with the direction being taken by China. Although China isn’t necessarily intending to fill the climate leadership void left by the U.S. withdrawal from Paris, it will certainly be very happy to dominate fast-growing sectors such as solar energy, electric vehicles and batteries.
The clean energy market is growing at a rapid pace globally and China is setting itself up to overshadow other nations whilst the U.S. government looks the other way. IEEFA has identified large (valued at US$1 billion or more) Chinese international clean energy projects and takeovers around the world totaling over US$44bn for 2017, higher than the US$32bn identified for 2016 which was itself a record year for Chinese low emissions sector investment overseas.
China is undoubtedly a major funder of coal-fired power projects around the world. Many large, state-owned corporations have seen opportunities for new, domestic coal-fired power stations dry up and are looking for projects abroad.
However, even the cautious International Energy Agency (IEA) is now clearly indicating that renewable technology will dominate global power capacity additions throughout the next couple of decades. With the capacity building and renewables industry growth now occurring in China, the nation is preparing to lead this new energy world. China is not going to buck the trend; it is embracing it.
China’s international presence in power transmission construction has also become highly significant led by State Grid Corporation – the world’s largest utility by revenue. State Grid’s overseas investments in power transmission fits well with China’s international renewable energy ambitions.
Grid operators and investors bring with them strong relationships with equipment suppliers and maintain an influential position in discussion of the future generation mix. Overseas investment in power grids is a natural facilitator for Chinese renewables technology which is becoming increasingly prevalent.
China dominates solar module manufacturing and 2017 saw this position cemented. Chinese solar manufacturers account for around 60% of global solar cell production. The nation’s presence in wind power globally is also on the rise led by the international activities of companies such as Goldwind and China Three Gorges’ diversification away from hydro-electricity.
Now, China is rapidly developing its domestic battery and electric vehicle capacity. Accompanying this, Chinese companies are looking to dominate new technology resources essential for battery production such as cobalt and lithium as China has done previously in the rare earths sector.
China is outmaneuvering other nations in securing supplies of these new energy commodities. Chinese companies are already in position to dominate the cobalt market with the majority of supply heading back to China. Chinese miners operating abroad are expected to have been responsible for 62% of global cobalt supply in 2017.
Bloomberg New Energy Finance sees Chinese companies collectively producing 121GWh of battery production capacity by 2020, dwarfing Tesla’s 35GWh. Chinese battery makers such as Contemporary Amperex Technology Ltd (CATL) and BYD are key to the nation’s intention to dominate battery supply to EV manufacturers.
Gaining a head start in the electric vehicle sector domestically will be a prelude to a push into international markets. Chinese manufacturers like BYD have ambitions to sell more EVs overseas than domestically in the future.
Growing Chinese global energy dominance is spearheaded by the Belt and Road Initiative (BRI) that is driving infrastructure investment along ancient trading routes. At the 2017 Communist Party Conference, the BRI was enshrined within the party constitution, giving the initiative even greater prominence.
Despite an overall slowdown in Chinese M&A activity abroad in 2017, activity in BRI countries increased during the year, defying a Chinese crackdown on domestic companies making overseas acquisitions in other sectors during 2017. Through the whole of 2016, Belt and Road-related acquisitions totaled US$31bn; this total had been surpassed in 2017 by August (US$33bn).
China also has the financial clout to back up its plans for international new energy expansion. Some of the largest banks in the world are Chinese and there are many other large state-owned financial institutions as well as the China-controlled Asian Infrastructure Investment Bank (AIIB) at its disposal. The AIIB will likely prove a key facilitator of Chinese-sponsored new energy infrastructure development.
China clearly has a long way to go in its plan to reduce domestic reliance on coal and oil imports. However, the nation’s long-term plan is increasingly clear. Despite not necessarily wanting to be seen as the world’s leader on driving reduced carbon emissions, it clearly sees that reducing reliance on fossil fuels and embracing new energy is in its own energy security interests.
This fits in well with its desire for increased international economic influence; the development of domestic new energy capacity will lead to a global roll out of Chinese energy technology.
Link to the full report – “China 2017 Review: World’s Second-Biggest Economy Continues to Drive Global Trends in Energy Investment”
Simon Nicholas, Energy Finance Analyst, Institute for Energy Economics and Financial Analysis (@simonjnicholas)
We Recommend
This is how coal dies — super cheap renewables...Battery storage,Climate,Coal,Other Good Stuff,Renewables,Solar
Eligibility of 10–100 kW solar PV systems under...Governments,Press Releases
“Einstein of the solar world”: Remembering UNSW...News & Commentary,Solar
Know your NEM: What to expect in 2018Energy Markets,News & Commentary
Northern Territory launches tender for up to 45MW...Battery storage,CleanTech Bites,Governments,Renewables,Solar
SolarReserve granted approval for 150MW solar...News & Commentary,Solar
Recommendations powered by plista
China • Governments • News & Commentary • Smart Energy China, clean energy
« Previous Post
Next Post »
RenewEconomy Free Daily Newsletter
Email Address
From Our Partners At SolarQuotes
Live Australia Electricity Generation Data
Upcoming Events
Sponsored Links
Renew Economy Jobs Board
Press Releases
Eligibility of 10–100 kW solar PV systems under the Renewable Energy Target
Yallourn coal mine licence extension poses unacceptable risk to our climate
Jerry Maycock announced as new Chair of TransGrid
Olam signs long term Renewable Corporate PPA with Flow Power
ARENA provides $29m funding boost for world-leading solar PV research
Follow Us
Popular Articles
Second Tesla "big battery" to power Victorian farm
SolarReserve granted approval for 150MW solar thermal project
China further cementing its clean energy dominance
Tesla big battery outsmarts lumbering coal units after Loy Yang trips
Popular Tags
AEMO ARENA Australia battery storage carbon emissions CEFC China clean energy climate climate change coal cop21 electricity electric vehicle electric vehicles emissions energy energy efficiency energy storage EV EVs fossil fuels Gas Germany global warming India NEM nuclear policy renewable energy renewable energy target renewables RET rooftop solar smart energy solar solar energy solar farm solar PV south australia Tesla United States wind wind energy wind farm
© Copyright RenewEconomy 2018. All rights reserved.
Privacy | Terms of Use | Contact | Login
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment