China has never been the most enthusiastic party to international climate accords, but Beijing might end up saving the planet anyway. In little more than a decade, China has made itself a world leader in electric vehicles, renewable energy, and energy storage. In response to its own environment, shrinking workforce, and security fears about foreign dependence, the country has incubated a green industrial policy that is both generous and ruthless.
According to a forecast by the China Electricity Council, China likely had a total installed capacity of 200 GW of solar and 210 GW of wind by the end of 2019 – a 15% and 14% increase from 2018, respectively.
In 2019, more electric vehicles were sold in China than the rest of the world combined. EVs now represent more than 6% of car sales in China, up from 1% in 2016. China has upped its goal for NEVs to 25% of new car sales by 2025.
This year will be critical for China. The country will enter into its 14th Five-Year Plan (FYP) for National Economic and Social Development in 2021. A series of policies and plans will be drafted in the coming year, setting targets covering the years 2021 through 2025, which will provide strategic directions for industrial development.
In the coming 14th Five-Year Plan (2021-25) period, wind and photovoltaic power across China are to fully achieve power grid parity, or the tipping point at which their generation costs are the same or less as electricity from the power grid, thanks to the country’s efforts to reach a greener energy mix, industry experts said.
Considering China’s determination and efforts to accelerate the energy transition, renewable energy will continuously be the focus of new demand growth in the upcoming 14th FYP. However, with renewable subsidies gradually being phased out in the next few years, it is becoming extremely important to install effective incentives to drive long-term development, and to stay on track to reach China’s Paris Agreement target.
Learn more about our Climate Impact Asia Fund, investing in the leading Asian-listed companies making a positive impact against climate change. These are companies focused on delivering sustainable long-term returns and which provide a positive impact against climate change through specific solutions including but not limited to renewable energy, environmental services, water treatment and distribution, low-carbon transportation and energy management services.
Contact: [email protected]
Sources: www.foreignaffairs.com, www.pv-magazine.com, www.china.org.cn, www.impactalpha.com
