New energy ambitions underline China’s confidence

By Lin Boqiang Source:Global Times Published: 2017/12/28 20:43:39

Illustration: Peter C. Espina/GT


China is the world's fastest-growing country in terms of new energy development. It took less than a decade for it to become the world's leading installer of wind and solar power.

At present, China's wind power capacity is around 180 gigawatts, with about 120 gigawatts of solar power. In 2016, wind and solar power accounted for 5.1 percent of the country's total on-grid power generation.

Compared with other countries, there are several major difficulties facing China's new energy ambitions. This enthusiasm for new energy industry underlines China's confidence that it is moving in the right direction.

The absolute demand for energy is huge, and this level of new energy development and energy transformation is completely unprecedented. New energy development must address the conflict between a predominantly coal-based energy structure and environmental protection pressure, while supporting economic development.

Western economies are generally developing steadily with an already improved environment. For them, new energy is just an alternative to traditional sources. The Chinese case is entirely different. China's enormous economy is still advancing and new energy sources are essential, not only to replace traditional ones, but also to meet expanding energy demand and pressure on traditional sources.

However, the distribution of new energy power generation facilities is not compatible with the distribution of energy demand, making it hard for China to duplicate the strategy of developed countries in new energy development.

These difficulties mean that China must explore its own path through new energy development by studying the overseas experience and coming up with industrial policies that meet the needs of the actual situation on the ground.

This rapid new energy development comes in the face of three major challenges: costs, a shrinking overseas market and curtailment of wind and solar projects.

In order to lower costs, the government encouraged large-scale development of basic new-energy manufacturing industries with government support. Around 2012, the overseas market was shrinking and becoming more restricted. At that time, China began installing its own new capacity to avoid the collapse of the new energy manufacturing sector and to protect the development and integration of the domestic production chain. In comparison, foreign new energy players floundered at this time.

Curtailment of clean-energy projects is a common challenge facing new energy development. Since 2015, the Chinese government has been active in coordinating new energy, traditional power generation, the grid and major consumers to tackle the curtailment problem. The continuous expansion of new energy in an orderly manner demonstrates China's commitment and capability.

China's new energy development has made best use of its manufacturing advantages. Once lagging behind developed countries, the new energy sector took advantage of large-scale production costs to cultivate a domestic industry. The cost of photovoltaic modules dropped by 90 percent in China over the past decade. Such cost advantage brought talent and technological advantages, which finally became market advantages. None of this could have happened without the support of Chinese manufacturers.

Last but not least, China offers a path that other countries can follow. The success of the new energy sector shows that with proper social and policy support, developing countries facing great environmental protection pressure can develop new energy even faster than developed countries by making use of their latecomer advantages.

In the past few years, developed countries, especially European countries, have sent a one-sided message: New energy is a game for the rich, and society needs to fork out high subsidies in exchange. It is hard for developing countries to afford to develop new energy along that path.

Without overall planning relying on the market alone may leave the new energy sector troubled by short-term difficulties and slow progress.

The success of China has provided an example for the developing world, especially those who face resource constraints and daunting environmental challenges.

The author is dean of the China Institute for Studies in Energy Policy at Xiamen University.

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