(Bloomberg) -- After 10 years of helping other countries develop massive amounts of power generation, China’s Belt and Road initiative is pivoting more toward renewable energy, according to a new study from Wood Mackenzie Ltd.
Renewables account for 57% of overseas development projects that are currently planned or in construction, compared to 37% of the capacity built over the last decade, the report said. The shift has come as the price of wind turbines and solar panels has fallen, and as governments amp up pressure to move away from polluting fossil fuels.
“China is changing its overall strategy, so we expect to see more focus on renewables, and more direct investment than the bilateral lending that was more common in the early years of the BRI,” said Alex Whitworth, the consultancy’s head of Asia-Pacific power and renewables research.
Beijing’s domestic ramp-up of clean energy continues apace, and installations of solar, wind, nuclear and hydro this year should generate enough electricity to power all of France, according to a report last week from the Centre for Research on Energy and Clean Air.
Wood Mackenzie identified 128 gigawatts of generating capacity, accounting for about $200 billion of investment, that had been completed by 2023 through the BRI, which was announced by President Xi Jinping in 2013. A further 80 gigawatts of projects are currently planned or being built, according to the firm, mostly in Asia.
Another 54 gigawatts have been suspended or canceled, either because of policy changes or commercial risks like cost inflation or over-optimistic financial assumptions. About 61% of the canceled projects involved coal, after Xi in 2021 announced a ban on new overseas projects using the fossil fuel.
Still, Xi didn’t force companies or banks to cancel existing projects, and there are 21 coal and 12 natural gas developments in planning or construction phases, according to Wood Mackenzie.
The Week’s Diary
(All times Beijing unless noted.)
Monday, Nov. 20:
- China sets monthly loan prime rates, 09:15
- Natural resources ministry briefing in Beijing, 10:00
- China’s 3rd batch of October trade data, including country breakdowns for energy and commodities
- AIIB seminar in Beijing on climate-friendly smart infrastructure in China, 15:00
Tuesday, Nov. 21:
- Chinese Academy of Social Sciences releases China energy development blueprint, Beijing, 13:30
Wednesday, Nov. 22:
- CCTD’s weekly online briefing on Chinese coal, 15:00
Thursday, Nov. 23:
- EARNINGS: Chow Tai Fook
Friday, Nov. 24:
- China Energy Research Society hosts seminar in Beijing on China’s green transition, 09:00
- China weekly iron ore port stockpiles
- Shanghai exchange weekly commodities inventory, ~15:30
On the Wire
Iron ore resumed gains — after falling for the first time in eight sessions on Friday — on expectations for more Chinese stimulus and that previously announced measures will start filtering through.
China may be done with rate cuts for now as policymakers turn to other means to support the economy and stabilize credit growth headed into the new year.
China shipped less gasoline and diesel overseas last month as export margins fell and refiners skimped on using up their quotas.
A Chinese firm has announced it will build a renewable energy project with more generating capacity than New Zealand in a vast inland desert province.
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