7 May 2017

In China Become the World’s Clean Energy Leader?

By 2015, China held a third of the global market share [PDF] for hydropower, wind power, and solar energy. The country’s private sector invested $32 billion in 2016 toward international clean energy projects, adding to the $102.9 billion invested a year prior by the government into domestic renewable energy. Many of these investments were made in major developing countries, including Brazil, Egypt, Vietnam, and Kenya. 

Investing in clean energy at home also creates opportunities for China to expand its marketing of products such as solar panels abroad, says Jennifer L. Turner, the director of the Wilson Center’s China Environment Forum. China seems poised to surpass the United States in leading clean energy innovation and efforts to mitigate the effects of climate change, but Beijing faces internal challenges to energy reform, she says. 

Why are China’s clean energy investments surging? 

The surge has been driven by two primary factors. The first is air pollution. This has become more salient lately, but China was trying to develop more alternatives to coal even before it signed the Paris Agreement. Since then, there’s also been a growing awareness that investing in clean energy development domestically is going to open up more opportunities for China to expand marketing for these products globally. It’s not surprising that China has already captured the global market on solar panels. 

“The Chinese investors have a different approach from traditional aid. Their approach is not aid—it is a business opportunity.” 

The second factor is energy security. Diversifying energy sources, especially building up clean energy, will be key for China’s energy security, but this has been met with many challenges. For example, Greenpeace released infographics earlier this year that show, by province, the current state of wasted wind power. The high rates of wind power curtailment, which occurs when turbines are shut down so as not to congest transmission lines, reflect a major need for grid reform and reform of the electricity market. Part of it is attributed to growing pains, but they’re also hitting a point where some provinces don’t want to import wind power because they give grid priority to their own local coal-fired power plants, which would generate more profit locally. 

Of course, technical problems in integrating more renewables with the grid and local protectionism have slowed actual use of renewables, but the government continues to increase investment. One solution the country has looked to is finding more ways to use solar panels on rooftops rather than rely on faraway solar farms. Additionally, there are efforts underway to encourage solar developments in poorer parts of China, which could help the country take care of its overproduction of solar panels. 

Where does the debate between areas that are heavily dependent on coal and more urban areas that want to see improved air quality stand? 

China’s Air Pollution Action Plan and revisions to the Air Pollution Prevention and Control Law settled this question for eastern China. The urbanites in these heavily populated east coast cities don’t want coal plants nearby and with new air pollution measures, the government is moving these plants out of the east and reducing coal production. The results of China’s coal use reduction have been striking, as coal-fired power production has dropped for the third year in a row. 

While it is encouraging to see coal-fired power is going down, there is another coal industry on the rise. A large number of local governments and provinces in China’s coal-rich western regions started to invest in various coal conversion industries in 2007 or 2008, because turning coal into gas, liquid fuel, and chemicals was more lucrative than coal-fired power. China’s western region will find any way it can to use the abundance of coal, because it is significantly poorer than the east coast. 

Some experts predict that coal use will continue to drop, but the speed will slow down at

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