China's shift to clean energies

05-05-2015

The Chinese government’s significant policy and financial support for the renewable energy sector confirmed China's world leadership in total installed renewable power capacity in 2013. For the first time China’s new renewable power capacity exceeded its new fossil fuel and nuclear capacity. In 2013, China attracted more green investment than the EU28. With the rebalancing of its overall economy from an export-led to a more consumption-based growth model, the Chinese renewable energy sector is redirecting its focus from exports towards greater domestic use. The adoption of the Renewable Energy Law (REL) in 2005 was an important turning point in China’s evolving renewable energy policy. China’s first regulatory framework for clean energy promotion laid the foundation for the provision of systematic support to the development of renewable energies. The 11th Five-Year Plan (2006-10) introduced a 10% target for non-fossil energy as a portion of total energy consumption for the first time. The 12th Five-Year Plan (2011-15) includes a non-fossil energy target of 11.4% and, more importantly, defines seven strategic emerging industries (SEIs) set to foster green growth and China’s worldwide leadership in these sectors. Despite this remarkably positive trend, the share of renewable energy in China’s energy mix remains low, as growth in fossil fuel use continues to spur the country’s plans for a high annual growth rate of about 7%. In 2011, fossil fuels and nuclear energy together still accounted for almost 93% of primary energy consumption, while renewable energies represented only around 7%. Although domestic deployment of renewable technologies is gaining momentum, over-capacity in the Chinese solar and wind industries, coupled with the slowdown in renewable energy investment in the EU and US, is pushing Chinese companies to venture into new markets.

The Chinese government’s significant policy and financial support for the renewable energy sector confirmed China's world leadership in total installed renewable power capacity in 2013. For the first time China’s new renewable power capacity exceeded its new fossil fuel and nuclear capacity. In 2013, China attracted more green investment than the EU28. With the rebalancing of its overall economy from an export-led to a more consumption-based growth model, the Chinese renewable energy sector is redirecting its focus from exports towards greater domestic use. The adoption of the Renewable Energy Law (REL) in 2005 was an important turning point in China’s evolving renewable energy policy. China’s first regulatory framework for clean energy promotion laid the foundation for the provision of systematic support to the development of renewable energies. The 11th Five-Year Plan (2006-10) introduced a 10% target for non-fossil energy as a portion of total energy consumption for the first time. The 12th Five-Year Plan (2011-15) includes a non-fossil energy target of 11.4% and, more importantly, defines seven strategic emerging industries (SEIs) set to foster green growth and China’s worldwide leadership in these sectors. Despite this remarkably positive trend, the share of renewable energy in China’s energy mix remains low, as growth in fossil fuel use continues to spur the country’s plans for a high annual growth rate of about 7%. In 2011, fossil fuels and nuclear energy together still accounted for almost 93% of primary energy consumption, while renewable energies represented only around 7%. Although domestic deployment of renewable technologies is gaining momentum, over-capacity in the Chinese solar and wind industries, coupled with the slowdown in renewable energy investment in the EU and US, is pushing Chinese companies to venture into new markets.