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China Leading on World's Clean Energy Investment, Says Report

2018.01.12     From: EcoWatch


China is by far the largest force in global clean energy development and its firms are increasingly looking abroad for opportunities, a new report says.


The report, released Tuesday by the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA), details the rising importance of China's firms and investors for low-carbon projects outside the country.


While it has been widely reported that China is investing in coal abroad, the new report highlights how the country is also investing abroad heavily in renewable energy, energy efficiency and electric cars.


Although China is still investing in some coal projects around the world, it has become clear that renewables will be the dominant energy technology in the coming decades, said report co-author Tim Buckley. China is setting itself up as a global technology leader and will embrace the direction energy markets are moving, he added.


IEEFA has identified large Chinese international clean-energy projects and takeovers totaling more than $44 billion for 2017, compared to $32 billion identified in 2016.


Domestic Rise


China is the world's largest emitter and remains heavily dependent on coal.


However, the country's plans to shift towards clean energy, led by concerns over the impacts of air pollution and climate change, as well as its keenness to expand in new markets, is also well underway.


In its pledge as part of the Paris agreement, China said it will aim to source 20 percent of its energy in 2030 from low-carbon sources. China accounted for almost half of the solar PV expansion in 2016, according to the International Energy Agency (IEA). China also announced its long-awaited Emissions Trading Scheme (ETS) in December, although this will initially cover only the power sector rather than the eight sectors originally proposed.


The report notes:


"Such is China's significance in energy markets on the world stage that its shift toward clean generation technology is driving the trend at the global level."


Leading companies are now increasingly looking for expansion opportunities abroad, according to the report.


Solar Reach


Factories in China now account for around 60 percent of global solar cell production. This includes companies headquartered elsewhere who base some or all of their manufacturing in China, such as Canadian Solar.


Among the firms working in this space is Tongwei, which in November announced a $1.8 billion investment to make its solar cell manufacturing capacity the largest in the world.


Another Chinese firm, Jinko Solar, maintained its world-leading solar module shipments position in 2017, at around 10 percent of global share. The firm ranks number one in the European market, two in the Chinese and Japanese markets, third in India and fourth in the U.S.


Chinese solar modules already dominate the market in India. Longi Solar, another large manufacturer, announced plans in December to set up a 500 megawatt (MW) module manufacturing plant in India. This comes in response to the combination of India's ambitious solar targets and proposals to use only locally manufactured solar equipment, the new report says.


China is leading in the expansion of solar energy capacity around the world. Only 70 percent of the solar capacity built by Chinese firms in 2017 was domestic, with Malaysia (8 percent) and Taiwan (7 percent) the next largest markets. Canadian Solar and solar firm Trina Solar were both successful bidders in Mexico's record-low tariff auction in November, the report says.


Meanwhile, Shanghai Electric, a subsidiary of State Power Investment Corporation (one of China's top five power generators), is set to build a $3.9 billion concentrating solar power (CSP) plant in Dubai in a partnership with Saudi Arabia's ACWA Power. The project will be the world's largest CSP project and have the world's tallest solar tower, at 260 meters (approximately 853 feet).


Chinese companies are also heavily involved in foreign acquisitions, such as the $232 million purchase of three Californian solar plants by Shenzhen Energy, announced in October. The firm has also opened offices in the U.S., Indonesia, Greece, Italy and Serbia.


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