China’s renewable product exports have grown 35% between 2019 and 2023, while its Belt and Road Initiative has developed “more than a hundred wind and solar projects” internationally, according to a new report by Wood Mackenzie.
Battery power
The ‘Looking Overseas’ report finds that China’s main export in green technology is now batteries, overtaking solar energy modules over the previous four years. It also finds that Chinese firms are increasingly active in seeking opportunities for investment abroad in the sector, tending to invest in nations “with high power demand, stable business environments and predictable revenue streams”.
A combination of “integrated supply chains, rapidly declining prices and a high standard of performance” has allowed China to supply over 65% of the world’s renewable energy products, according the report, which forecasts a further increase in its share of the market.
‘Remains price-competitive’
Xiaoyang Li, director of APAC power and renewables research at Wood Mackenzie, said that “renewable energy is favoured by Chinese developers in near-term overseas investment compared to other conventional power generating technologies”.
Speaking on the country’s competitive advantage in green technology, he added:
“Benefitting from a robust domestic supply chain, equipment produced by Chinese manufacturers overseas remains price-competitive despite an uplift due to inflation uncertainty and higher production costs.”
Interest in investment by Chinese firms in overseas renewables projects is “increasing”, according to Wood Mackenzie, “but progress is slow due to high development risks and uncertain revenue flow”.
Sustainability slowdown
Another report, released on Tuesday (28 May) by the REN21 policy network, has found that governments “have basically stepped back from their ambitions” on green energy, according to the organisation’s executive director Rana Adib.
The Energy Demand Module of the Renewables 2024 Global Status Report states that there is demand for renewables but that adoption is slowing as a result of a “fragmented policy landscape” and cost pressures. In the EU, for instance, the cost of electricity for energy-intensive industries is almost double that of China and the US.
According to REN21, “a lack of strategic integrated planning, inconsistent policies, and a lack of structural reforms” have combined to impede the introduction of renewables at a faster rate. Sustained subsidies for fossil fuel industries have also meant that “energy-consuming sectors don't have the economic incentives” to make the move to clean energy.
This was exacerbated by falling prices in traditional energy sources, which also continue to better serve heavy industries such as “hard to abate” steel and cement manufacture, where firms argue that renewables cannot generate sufficient heat.