China Takes the International Lead on Clean Energy Investment
A PDF report by the Institute for Energy Economics and Financial Analysis (IEEFA) says Chinese firms and investors are fast becoming international leaders in the low-carbon cleantech projects globally.
“China continued to be a global leader of investment in clean energy projects in 2017, defying an overall slowdown in Chinese overseas investment as the country further positioned itself to dominate in new energy technologies such as batteries and electric vehicles.”
The report isn’t sugar-coated, it also points out that China invests a lot in coal abroad but it does also invest heavily internationally in renewable energy, energy efficiency, and electric cars.
China is hungry and it is doing anything it can to spruce up its international brand image. Part of that reason is to start exporting its cars globally. But in order to do that, it realizes it needs to remove the Made in China stigma and build a credible automotive brand recognition worldwide. In the meantime, it is setting itself up as the global technology investment leader.
Report co-author Tim Buckley said that IEEFA has identified large Chinese international clean-energy projects and takeovers totaling more than $44bn for 2017, compared to $32bn identified in 2016.
“2017 was a record-setting year for renewable installation in China while efforts to reduce renewable energy curtailment began to yield results. China is estimated to have installed at least 50 GW of solar-powered generation in 2017, and Bloomberg New Energy Finance now predicts a total of 54 GW — compared to the 34.5 GW it forecast in 2016. Going forward, according to the International Energy Agency (IEA), China will continue to lead the world in renewable energy development.”
Big Pollution, Big Coal Burner, But Big CleanTech Investor
It’s true that China is the biggest polluter and the biggest coal consumer. But it is also true that the country is still holding its Paris Agreement pledge. The country aims to source 20 percent of its energy in 2030 from low-carbon sources. So far, it was responsible for almost half of the global solar PV expansion in 2016, according to the International Energy Agency (IEA). It also released its Emissions Trading Scheme (ETS). We hope it will continue to meet all the eight sectors it stated originally instead of just energy.
The report is an excellent read and covers solar, wind, and hydro energy, as well as energy efficiency and electric vehicles (EV), which includes batteries and new energy materials.
So Where Does This Leave The West?
Most of the West is moving along, but trailing China’s juggernaut jumps. When it comes to Green Bond Issuance, 2017 saw the US$100 billion mark in November after the China Development Bank issued a US$1.5 billion bond and the Industrial and Commercial Bank of China issued its first climate bond, for US$2.1 billion, in October. These bonds support renewables, energy efficiency, low-carbon transport, and water management. China became the largest green bond issuance location in 2017 (US$16 billion), just ahead of France (US$15 billion).
Now some good news for the US, hopefully, perhaps? A recent non-commitment tweet from President Donald Trump stated that the United States “could conceivably go back in” to the Paris Agreement. This could reopen the door to the possibility of meeting the rest of the world in cleaning up our acts. The story was covered by Joshua Hill on CleanTechnica.
The report ends with a good conclusion explaining how China can achieve this international cleantech investment presence:
“China’s vast financial capacity allows it to support clean energy growth on its own terms rather than those of such institutions as the Green Climate Fund (GCF). China does not intend to fill the gap left in the GCF by the departure of the U.S. from the Paris agreement. Instead of taking an overt leadership position on climate finance action as the U.S. abdicates responsibility, it is adopting a more under-the-radar path that will attract praise for its effect on expanding new energy technology globally while perhaps drawing less criticism for its support of fossil-fuel projects than if it were to take a more high-profile leadership role.”