More Investments in Renewables in China Than in US and Europe Combined
China attracted more asset financing in clean-energy technology in the second quarter than Europe and the U.S. combined, according to Bloomberg New Energy Finance. A clever piece of legislation created the renewable energy bonanza.
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Six months ago, China made it the law that all utilities have to buy any renewable power put on the grid or they get fined. Since then private investment in renewable sources in the country has surged past US and EU levels. Investors are betting on China.
In the second quarter, outside financing of wind turbines, solar panels and low-carbon technology in China soared 72% to $11.5 billion.
China’s renewable sector accounted for one third of renewable investment for the period for the entire world, which totaled $33.9 billion, including all share sales, venture capital, private equity and asset finance.
Of this amount, private investment in clean energy in the US rose to $4.9 billion for the quarter while in Europe it fell to $4.5 billion for the same time period.
Last year, China installed 14 GW of just wind power alone, far outpacing the power added from wind of any other country, mostly using stimulus funds. Here, the US is more competitive. The stimulus funds in the US, once spent, will have added 16 GW of all forms of renewable energy to the US grid.
Private investment, though, needs regulatory certainties. With the sudden death of the climate bill in the US last week, private investment here will likely slow.
But even in the absence of a big clean energy bill, some policies have real impact. Feed-in Tariffs in Spain and Germany shook the world by offering premium prices for renewable energy production. (Far too generous: you only need to offer two to three times retail to get action.)
The new law in China requiring that utilities have to buy any renewable power added to the grid, is essentially the (always popular) Electranet idea, that consumers can also be producers. It appeals to the universal desire to make money.
Finland passed the same legislation as China decades ago with the result that its paper mills now provide 30% of the electricity on the national grid, by tapping into their produced heat on-site to generate electricity.
Heavy industries like steel mills, paper mills and concrete producers could use Combined Heat & Power systems to use (now wasted) heat produced in the manufacturing process to sell the power to the grid. There is an estimated 7 quadrillion BTU of potential there.
Everyone from frugal homeowners to heavy industry could be earning money by adding power to the grid.
Susan Kraemer @Twitter
Image: China State Power
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In the interest of Balance, I’d like to add that There is also more investment in Nuclear Power in China than in US and EU combined.
China has (this Month) begun operating an advanced Generation Four Nuclear plant which burns 68-70 percent of the available Uranium fuel, and creates less waste, as opposed to the current nuclear plants which use only 1 percent of the Uranium fuel and wastes the rest as “Waste”.
http://sify.com/news/china-tests-first-fourth-generation-nuclear-reactor-successfully-news-international-khwoadeibhd.html
http://www.hindustantimes.com/China-develops-fuel-efficient-nuclear-reactor-report/Article1-576223.aspx
great post, Susan. it seems like every time i turn around China has done something else on this front. really moving things forward.
Susan:
Could it be China feels bold and inventive because their economy is still growing, they have loads of cash and almost no debt?? Most likely they will leverage this position into further growth and a lead in renewable production and expansion while still leading in the building of new coal plants and nuclear facilities. Even more interesting and you note it, the Chinese are stimulating private market forces to take the lead (i.e capitalism at its most forceful and useful strengths).
Tough to see how we can do as much with a government debt heading toward 20 trillion and policies like cap and trade that would have added to that debt on the public side. Couple market uncertainty based on government policies clearly NOT pro business (think additional health expense burdens, the clear hint of more taxes (both personal and business) and its a wonder more money is not sitting on the sidelines in this country. Now if we can incrementally stimulate the public market forces as you so example above, feed in tariffs, you must by renewables etc. we might just work back into our strengths (free market forces, out side of the box thinking etc.) and get where we need to be on both renewable production, environmental protection and possibly even lessening of foreign oil purchases.
@Roger, you have some errors in assumptions:Cap and trade costs polluters, not the government, so that would reduce the $11 trillion govt debt run up by Bush tax cuts for the wealthy and the unfunded two wars per old news from 2008.
http://www.cbsnews.com/8301-500803_162-4486228-500803.html
Now its up to $13 trillion so we’ve added 2 trillion trying to get out of the recession
http://www.treasurydirect.gov/NP/BPDLogin?application=np
The Congressional Budget Office (CBO) scored all three climate bills and all 3 reduce the govt debt (because some of the auction funds go to debt reduction) (while most of the funds pay for renewable investment and to reimburse consumers).
CBO: ACES reduced govt debt -$24 billion
http://www.grist.org/article/2009-06-08-cbo-climate-bill-score/
CBO: CEJAPA reduced govt debt -$21 billion
http://www.scientificamerican.com/article.cfm?id=cejapa-auction-revenues-would-creat-2009-12
CBO: APA reduced govt debt -$19 billion
http://www.cbo.gov/ftpdocs/115xx/doc11565/AmericanPowerActKerryLtr.pdf
By contrast, energy bills with no polluter-pays (cap and trade) must get paid by the taxpayer instead, so they get poor CBO scores, meaning they will cost ‘govt’ (us).
http://cleantechnica.com/2010/02/04/energy-only-bill-got-a-failing-score-from-cbo/
It’s beginning to sound like China’s efforts are creating competition with ours, which will be helpful to our own efforts. One of the things the Chinese seem to have realized and put into practice (and we haven’t) is that there’s money to be saved and made by implementing things like Combined Heat & Power systems. The battle for conservation needn’t be fought ideologically at all when everyone stands to benefit in concrete, material ways.
no
Yes, but we cant ask a nation that is in mid industrialization to cut down on contaminants. For the USA its very easy to do so as it is in its post industrial time.
Peak Oil is coming our way, with increase fuel costs.