With a surge in investment in the renewable energy sector within and outside, China has clearly targeted to lead the world in promoting non-fossil fuel based power production. Because of this and a few other related developments, the world has added a record 138.5 gigawatts (GW) of renewable power capacity during 2016 with a total investment of $242 billion, the UN announced in early April.
The new investment, according to a joint announcement by UN Environment and Bloomberg New Energy Finance (BNEF), took place mostly in wind and solar installations while actual investment in fossil fuel-based energy dropped by nearly half of this amount during the same period. Interestingly, this welcome announcement came a day after the energy companies of Europe's 26 out of 28 countries pledged that no coal-fed power plant would be built after 2020.
This has coincided with the new US administration going back on the country's pledge to champion clean energy. President Trump had earlier announced with a gusto that the climate is a hoax created by China and threatened to formally withdraw United States from the Paris Agreement. He has not done it yet, but given the unpredictability of his mood, a total uncertainty rules.
Meanwhile, in contrast, a research report released by Reuters on April 10, China has pledged to increase non-fossil fuel based energy production at least by 20 per cent of the total capacity by the end of next decade, up from 12 per cent in 2015. To this end, Beijing has already worked out that it would need a total of 5.4 trillion yuan ($782 billion) by 2030.
CHINA'S 5-YR PLANS FOR RENEWABLE ENERGY: Good news is that wind and solar power could reduce fossil fuel consumption by nearly 300 million tones of standard coal a year by 2030. By comparison, this equals France's total primary energy consumption in 2015, the agency reported. China's National Development and Reform Commission (NDRC) announced that between 2016 and 2020, it plans to raise wind power generation capacity from 129 GW in 2015 to more than 210 GW in 2020 and solar power from 43.18 GW to 110 GW over the same period.
For this to achieve by 2020, it will need an investment of 2.5 trillion yuan (over $360 billion) for developing power plants for solar, wind and other renewable sources. However, NDRC's planners have pointed out a new problem that they are facing in the mismatch in the power distribution area which needs their attention in equal measure for a quick fix. The country's distribution system has not been able to become flexible enough to keep pace with the fast developing clean energy facilities and facing technological obstacles while connecting them to the national grid. This has resulted in the wastage of substantial amount of clean power.
French news agency AFP reported from Paris earlier in April that China is also putting its thrust to expand clean energy both nationally and globally. For example, it has poured more than $100 billion in renewable energy production sector in 2015. In a related report, Bloomberg New Energy Finance (BNEF) pointed out that this amount actually accounts for more than double of the US investment in this sector.
Both the agencies pointed out that on the domestic front, "world's second largest economy had already emerged as a renewable powerhouse, outstripping the United States. Last year (2016), China's overseas investment in renewable energy projects leaped to a record $32 billion - up 60 per cent from the year before, marking its leadership in the global market for clean energy."
JOB CREATION THROUGH CLEAN ENERGY PROJECTS: The Institute for Energy, Economics and Financial Analysis (IEEFA) in its latest report said in 2016, China finalised 11 foreign deals worth over a billion dollars each, and is expected to further pick up the pace this year. These deals were part of China's $32 billion clean energy project outside the country during the year. A Xinhua report quoting Li Yangzge, deputy head of China's National Energy Administration NEA) as saying: "Renewable energy will be the pillars for China's energy structure transition."
The transition to clean energy development has its own rewards. For example, as per International Energy Agency (IEA) estimate, compared to global renewable energy jobs of 8.1 million, China holds 3.5 million. The US holds less than 800,000 jobs. On top of it, the nation's renewable sector would "generate at least 13 million jobs by 2020."
Ulf Moslener, a professor at the Frankfurt School of Finance and Management has also agreed that China has emerged as "the world leader on renewable energy" with clear advantage over its rich nation competitors such as United States and Germany. He told the French news agency, "Standard solar modules are no longer rocket science … It will be really hard to compete with China on the cost side."
However, he pointed out that the US and European entrepreneurs still have an advantage when it comes to high-tech. For example, in the areas of thin film solar and cutting edge engineering services, they still dominate. But this is likely to end soon. But for now, China owns five of the six largest solar module manufacturing facilities in the world.
MOMENTUM FOR CLEAN ENERGY YESTERDAY & TODAY: Ironically, a recent New York Times front-page article recalled that at one stage, "for years, the Obama administration prodded, cajoled and beseeched China to make commitments to limit the use of fossil fuels to try to slow the global effect of climate change." This situation visibly turned in January this year when Chinese President Xi Jinping told the World Economic Forum in Davos, Switzerland that "the Paris Agreement (on climate) was hard won and should remain in force."
Meanwhile, the climate policy in the US turned around and the new President Donald Trump has signed executive order on March 28 aimed at undoing many of the Obama administration's climate policies.
Barbara Finamore, a senior lawyer and Asia Director at the National Resources Defense Council (NSDC), New York said (as quoted by a NYT article earlier in April), "It's clear, they (China) intend to double down on bringing down their reliance on coal and increasing their use of renewable energy." She further said, referring to the economic development blueprint drawn up by the Chinese government, "China wants to take over the role of the US as a climate leader and they've baked it into their five-year plans."
[email protected]
- Thursday, 21 November 2024 |
- Today's FE |
- e-Paper |
- Beta Website
