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Behind the dramatic surge in China’s clean energy investments

Wuxi, China. Photo: Wang Song
Wuxi, China. Photo: Wang Song

China’s emissions should fall from 2024 onwards thanks to the blistering rate it’s adding low-carbon energy facilities, a new analysis shows.

That’s good news for the fight against climate change, considering that China is the world’s biggest emitter of planet-warming gases like carbon dioxide.

The country previously pledged to ensure that its emissions would peak by 2030, although it now looks as though it’ll comfortably beat that target, because clean energy investments are outpacing the government’s own projections.

This year alone, China will add another 210GW of solar, 70GW of wind, 7GW of hydro, and 3GW of nuclear to its grid.

Those new facilities will generate enough energy each year to power France, according to the analysis by Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA).

Initially published in Carbon Brief, the study found that while China continues to build new coal-fired power plants, the nation’s emissions will likely enter a period of structural decline from next year.

Hydro generation is recovering following a historic drought, clean energy capacity continues to expand at a brisk pace, and the new coal plants will be operated at low utilisation rates.

Here’s how China got to this point, per the analysis:

  • About half of the 210GW worth of solar panels added this year will be installed on rooftops, largely thanks to the country’s ongoing ‘whole county rooftop solar’ programme. Large developers are tasked with focusing on particular cities or regions, and then work with networks of smaller local players whose job is to identify suitable rooftops and secure project development rights. The centralised approach allows for cheap financing and components, and fast deployment.
  • The announcement of China’s 2060 carbon neutrality target has provided political certainty to developers, and macroeconomic forces are helping as well.
  • With the highly indebted property sector in a state of crisis, local governments that rely on land sales for income have been searching for alternative opportunities. Since they’re indebted themselves, the state is encouraging local governments to restrict their investments to sectors such as cleantech. And now they’re competing to attract investment, often through generous subsidies to private developers.
  • The government has also made it easier for private companies to raise funding for low-carbon energy projects.
  • “As a result, much of the bank lending and investment that previously went into real estate is now flowing to manufacturing — largely cleantech manufacturing — as well as to cleantech deployment,” Myllyvirta writes.

Meanwhile, China’s electric vehicle market is also tracking well ahead of state targets.

EVs will account for 30% of all vehicles sold in China this year, according to Myllyvirta. The government was targeting just 20% by 2025.

The share of EVs in all vehicles sold in China is also on track to reach 30% in 2023.

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