Wednesday, May 31, 2006

Eye On China: China Now World's Largest Investor in Renewable Energy

According to a Xinhua News Agency article (reprinted here), China has become the world's largest invester in renewable energy. The news was announced by experts from the environmental watchdog, the WorldWatch Institute earlier this month at an ongoing forum for decentralized sustainable energy solutions in China.

Dr. Eric Martinot, a senior research fellow with the US-based Worldwatch Institute and senior visiting scholar of Tsinghua University, said that excluding large hydropower, China invested $6 billion (US) in renewable energy in 2005 out of a global total investment of $38 billion.

Soaring oil prices have made renewable energy a focus for world investors, Martinot told Xinhua.

Government support for renewable energy was reportedly $10 billion in 2004 for both the United States and Europe, including budget funding and policy support. The United States and Europe provide more than $700 million per year for research and development, said Martinot.

Moreover, large commercial banks are starting to notice renewable energy and several are adding renewable energy investments to their lending portfolios, he said.

And the renewable energy industry is booming. There are now more than 70 renewable energy companies worldwide with a market capitalization greater than $40 million each and their total market capitalization is over $30 billion, according to Xinhua.

Major investments and acquisitions have been made in recent years by leading global companies such as GE, Siemens, Shell, BP, Sanyo and Sharp and the industry could provide over 1.7 billion jobs worldwide, Martinot said. China's renewable energy market has huge potential and is a great market for world investors.

Among the US$6 billion investment in 2005, most was poured into small hydropower and solar hot water energy, with $600 million going towards wind power, Xinhua reports. China is already the world's leader in solar hot water use and, as reported previously, China has a huge untapped reserve of wind power potential they are just beginning to develop.

As we've discussed here before, the Chinese government has pledged strong policy support to the renewable energy industry in the past year. In January, China's new national renewable energy law came into effect [see previous post] which sets tariffs in place to foster renewable energy use. The announcement last November that I reported on here siad that China's goal is to double their current use of renewable energy to 15 percent of the rapidly developing nation's energy mix by the year 2020. Xinhua reports that China has announced plans to increase its installed electricity capacity for renewable energy to 10 percent of its total power capacity by 2010 and 20 percent by 2020.

Either way, China clearly has made renewable energy a strong priority for both policy and investment.

By 2010, Xinhua reports that renewable energy excluding large hydropower will account for five percent of China's total primary energy consumption and the percentage is planned to rise to 10 percent by 2020.

Speaking at a meeting on energy development on the last month, Chinese Premier Wen Jiabao called for effective measures to ensure the implementation of the government's energy saving and renewable development policies and emphasized that renewable energy is an important strategic alternative to coal and oil.

Is this a continued sign that Red China may be going green?

If you'd like to read about five praiseworthy and inspirational individuals who have been striving to make a green China a reality, check out China.org's 2005 Green China Award winners...

[A hat tip to RenewableEnergyAccess]

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