As the US was withdrawing from the Paris Climate Agreement and trying to resuscitate its domestic coal industry, China has been busy accelerating its shift away from coal and enhanced its new energy technology capacity as a prelude to a global roll-out. Tim Buckley, Director of Energy Finance Studies, Australasia at the Institute of Energy Economics and Financial Analysis (IEEFA) reports.
In 2017, China has continued to be the world’s dominant force in the building and financing of clean energy technology globally, concludes a report published today.
— IEEFA.org (@ieefa_institute) January 9, 2018
Indications are that renewable energy will dominate global power capacity additions for at least the next two decades. China is preparing now to lead this new energy world.
The withdrawal of the U.S. from the Paris climate agreement along with an increased U.S. government emphasis on coal and away from renewables is at odds with the direction being taken by China.
“The clean energy market is growing at a rapid pace and China is setting itself up as a global technology leader whilst the U.S. government looks the other way.”
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 comfortable providing technology leadership and financial capacity so as to dominate fast-growing sectors such as solar energy, electric vehicles and batteries.
This report follows on from IEEFA’s previous summation of China’s expanding new energy capacity in 2016. In this new report, China’s further progress in clean energy sectors during 2017 is analysed, including advancements led by the nation’s large and influential state-owned utility, engineering and finance companies. Growing Chinese dominance is led by the Belt and Road Initiative (BRI) that is driving outbound infrastructure investment along ancient trading routes. 2017 saw the significance of the BRI further enhanced. Despite encountering some headwinds in 2017, it remains a central feature of China’s foreign and economic policy.
“It has become clear that renewables will be the
dominant energy technology of the following decades…”
Simon Nicholas, IEEFA’s Energy Finance Analyst said:
“It has become clear that renewables will be the dominant energy technology of the following decades with even the cautious International Energy Agency (IEA) accepting that renewables will receive the majority of energy investment going forward.”
China is not going to buck this trend; although it is still investing in some coal projects around the world, China will embrace the direction energy markets are moving in and is setting itself up as a global technology leader.
— Simon Nicholas (@simonjnicholas) January 10, 2018
India is now following China’s energy sector lead, adding its economic weight to further accelerate global renewable energy deployments at ever greater economies of scale, driving deflation.
You can follow Tim Buckley on Twitter @TimBuckleyIEEFA.