Despite the phasing out of renewable subsidies and the country’s significant reliance on coal, which analysts predict will stay unchanged in 2022, China is going to continue to be the worldwide leader in the renewable energy capacity expansion over the next five years.
As per the International Energy Agency (IEA), the worldwide renewable energy sector has seen strong growth in the last 2 years, with new generation capability reaching approximately 280 gigawatts (GW) in 2020, up about 45 percent from 2019. This is the greatest year-over-year rise since 1999.
Worldwide renewable electricity capacity is expected to grow by more than 60% between 2020 and 2026, totaling more than 4,800GW, thanks to improved policy support and aggressive climate targets agreed during the COP26 climate negotiations in November. According to the IEA, the addition of extremely high capacity is going to become the “new normal” in 2022, with renewables contributing to 90% of the new power capacity increase.
Yearly additions to photovoltaic solar technology are going to also exceed records, with yearly additions hitting 162GW by 2022 – about 50% greater than pre-pandemic growth in 2019.
As per the IEA, after expanding by more than 90% in 2020 to reach 114GW, increased wind capacity will halt in 2022. However, it will still be 50% more than growth from the year 2017 to the year 2019.
China has been at the forefront of global renewable energy supply and demand for several years, accounting for roughly 40% of capacity increase from 2015 to 2020. Europe, the United States, and India were the next to arrive. Between 2021 and 2026, the four markets are expected to account for 87 percent of worldwide capacity expansion, up from 80 percent in the previous period.
In 2020, China’s share of the market reached 50% for the first time, owing to a rush to complete projects before administration subsidies were taken out. China’s strong development is likely to slow in 2022 after a two-year period of exceptional expansion. Despite this, the IEA predicts that China will continue to lead the market for the next 5 years, accounting for 43% of worldwide renewable capacity growth.
“The main state-owned utilities have all pledged to spend extensively in the wind and solar power in the 14th five-year program period to fulfill China’s carbon peak and neutrality goal, so economic motivation is not the key deciding factor,” said Qin Yan, chief carbon analyst at the data provider Refinitiv.
The People’s Bank of China (PBOC), the country’s central bank, launched a new lending facility in November to provide banks with low-cost money to subsidize lending to green initiatives, such as renewable energy, energy-saving, as well as carbon-reduction technology.