China’s renewable energy challange: projects and businesses

China is both the most-polluting nation on Earth and, at the same time, its biggest producer of “clean” energy. That’s the paradox of this “factory of the world”, which decided several years ago to take on the energy challenge and gradually reduce its use of coal in favor of hydroelectric, wind, solar and nuclear power.

China’s Vice Premier Zhang Gaoli and International Energy Agency Executive Director Fatih Birol met in December, when Birol visited Beijing to discuss China’s energy transition plan. At the start of last year, China pledged to invest $367 billion by 2020 to meet a final goal in 2030 of producing 20% of its energy needs from renewable sources.

China steps up the pace for green energy

Although 1.1 million people continue to die in China each year from pollution-related causes, China’s renewables race is impressive.  The McKinsey Global Institute calculates that the country is the world’s largest producer of solar energy and that it doubled the amount of solar energy produced in 2016 alone. In 2015, it installed more wind capacity than the United States, Germany and India combined; and it is the country where more electric cars are sold than anywhere else in the world.

These facts and figures show just how hard the government in Beijing is pushing for an economic and cultural shift to energy transformation, which is having a significant impact on the labor market. According to the International Renewable Energy Agency, China employs 2.5 million people in the solar sector (out of 3.5 million workers in renewable energy) compared to the 260,000 solar energy workers in the United States. At the same time, the government forecasts that 1.3 million coal miners will lose their jobs in the near future. The $367 billion investment plan launched in 2017 will create 10 million new jobs, according to China’s National Energy Administration.

China’s energy plan is not just an illuminated move to reduce global pollution, but reflects the government’s determination to conquer the industrial leadership position in what it sees as one of the biggest businesses of the future. The country is already the major producer and exporter of renewable energy technology, producing two thirds of the world’s solar panels and nearly half of its wind turbines, according to the International Renewable Energy Agency. One of the most visible examples of this leadership position is the floating solar energy plant at Anhui, the world’s largest, where 100 square miles of solar panels float on the surface of a lake and produce energy for 15,000 homes.
Everything is enormous in China, including its effort to free itself from using coal and the consequential high cost in human lives in the name of economic development.  Its renewable energy push has become a global issue, prompting the United States to threaten the World Trade Organization with new tariffs on production in countries it alleges are producing on behalf of Chinese companies.

Chinese Hydroelectric leadership

Growth in hydroelectric power is one of the drivers of China’s energy transformation. China is currently the world’s largest hydroelectric power producer, and in 2016 alone increased its installed capacity from 11.74 to 330 GW, more than a quarter of the world’s total, according to the International Hydropower Association.

The trade groups points out that future capacity is set to grow further after three pumped storage projects were commissioned in 2016: Xianju (1,500 MW), Hongping (1,200 MW) and Qingyuan (960 MW).  But small hydroelectric power plants will play a role from here to 2030, according to China’s Ministry of Water Resources in its “Guidelines on promoting the development of small hydropower industry”, since they have less of an environmental impact and respect the international best practices in dam construction.

This is just another of the challenges China is ready to meet in order to achieve its goal of creating an economy powered by clean energy.