China leading world in renewable energy investments
China will lead the world in renewable energy investments in the years to 2020 but slow progress of commercial projects and red tape threaten to curb spending growth.
Investment in new renewable power capacity is seen averaging at more than US$230 billion annually worldwide in the run-up to 2020, compared with US$250 billion last year, according to the International Energy Agency's annual medium-term renewable energy market report released yesterday.
The report links the decline to expectations of unit investment costs for some technologies as well as a likely slowdown in global capacity growth.
Expansion of renewables such as wind, solar and hydro projects will slow down unless policy uncertainty is diminished, the report says. The policy uncertainties stem mainly from concerns about costs of deploying renewables, according to the IEA.
"Just when renewables are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets," said IEA executive director Maria van der Hoeven.
However, China's policy on renewables had been clear and the government's support strong, said Louis Sun, a Shanghai-based analyst at Bocom International.
"Beijing is firmly supporting new energy development," Sun said. "One of the main reasons, especially in northern China, is to fight pollution."
The share of renewables in the country's total power generation was bound to increase in the long term, he said. "In the short term, I also see no economic pressure to slow down investment - the government has promised subsidy to renewables until 2020."
According to the National Energy Administration, China's power consumption grew about 5.5 per cent in the first quarter amid an economic slowdown. Last year, the country's power demand grew 8.2 per cent.
China and other non-member countries of the Organisation for Economic Cooperation and Development account for almost 70 per cent of the world renewables growth, the IEA report shows. China alone accounts for about 56 per cent of that portion.
Renewable energy made up 22 per cent of global generation last year and is expected to rise to nearly 26 per cent by 2020, the report says.