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China’s Dominance in the Renewable Energy Sector

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Since the Industrial Revolution, production realized with the intensive use of fossil fuels as energy sources has played an important role in the emergence of problems such as environmental degradation and climate change. In addition, the fact that fossil fuels are at risk of depletion has emerged as a separate problem for the continuity of industrial production. Therefore, sustainable development discussions have included the development of clean energy use along with the fight against many other problems such as hunger, poverty and inequalities. Thus, the efforts of countries to develop renewable energy sectors have accelerated.

China, which has increased its power at the global and regional level by achieving economic success with the reforms it has realized since the end of the 1970s, has also performed quite well in the renewable energy sector. As one of the world’s largest energy importers, China attaches importance to the development of environmental and energy-related sectors in the context of energy security. In addition, these sectors are among China’s developing strategic sectors. Especially since the global financial crisis in 2008, China has been taking a series of moves in addition to legal regulations in the sectors it has identified as strategic. As a result of this review, which questions whether there is a similar approach in the renewable energy sector, which is seen as an emerging strategic sector, it is seen that China has made significant investments in this sector as well.

China’s installed electricity capacity reached 2,920 gigawatts in 2023, an increase of approximately 360 gigawatts. While investments in thermal power plants, which account for about half of the installed capacity in the country’s electricity supply portfolio, continued to increase, albeit limited, the increase in renewable energy resources in capacity investments attracted attention. While China attaches importance to gradual transitions in a rational manner in this regard, it has also shown that it maintains supply-demand security, an indispensable building block of energy security, with the base power plant center.

Cost-effective manufacturing of equipment used in electricity generation from renewable energy sources plays an important role in domestic investments and global renewable energy investments. According to reports by China’s National Energy Administration, China added about 360 gigawatts to its electricity installed capacity last year. In 2023, solar power plants (SPP) led the capacity increase with 217 gigawatts, followed by 76 gigawatts in wind power plants (WPP), 58 gigawatts in thermal power plants, 8 gigawatts in hydropower and 1.4 gigawatts in nuclear power plants. Thus, the total installed capacity reached 2,920 gigawatts by the end of 2023.

Investment and Support Policies: The Chinese Government has invested heavily in renewable energy technologies. Government-backed incentives and subsidies have encouraged local production and made renewable energy more attractive.

Large Market and Demand: China is one of the world’s largest energy consumers and its energy demand is constantly increasing. Therefore, the demand for renewable energy is also high. To meet this demand, investments in renewable energy sources have also increased.

Production Capacity: China is a leader in the production of renewable energy technologies. It has a large share worldwide in the production of key components such as solar panels, wind turbines and lithium-ion batteries.

While the total installed capacity in the country will increase by 13.9 percent in 2023, this increase is calculated as 55.2 percent in SPP capacity, 20.7 percent in WPP capacity, 4.1percent in thermal power plants and 1.8 percent in nuclear power plants. Looking at the distribution of resources in the energy portfolio, thermal power plants ranked first with 1390 gigawatts of installed capacity. This was followed by solar power plants with 609 gigawatts, wind power plants with 441.3 gigawatts, hydroelectric power plants with 421.5 gigawatts and nuclear power plants with 57 gigawatts.

The rise in energy storage capacities is also noteworthy in China’s 2023 energy investments. Storage capacity in 11 provinces or regions of the country exceeded 1 gigawatt, while total capacity reached 31.4 gigawatts by the end of last year. New types of energy storage projects are particularly concentrated in Shandong, Gansu and Hunan provinces. Lithium-ion battery technology stands out in storage technologies. According to the International Energy Agency’s (IEA) Renewable 2024 Report, global renewable energy capacity is expected to increase by 3,700 gigawatts to 7,300 gigawatts by 2028. China’s renewable energy portfolio is expected to account for 46 percent of the global renewable energy share. China, which is rapidly making the investments it needs, exports wind and solar energy equipment to more than 200 countries around the world. Beijing’s exports last year amounted to 245.3 billion dollars in solar energy technologies and 33.4 billion dollars in wind energy technologies. [1]

China is the leading country in the field of renewable energy and energy storage systems. When we examine the reasons in detail, it is useful to make an assessment on five main factors. Technology Development and R&D: China continuously conducts R&D studies on renewable energy technologies. They have made significant progress especially in solar and wind energy technologies.

Transportation and Industrial Transformation: China is also adopting renewable energy in the industrial and transportation sectors and moving away from fossil fuels. This encourages a wider use of renewable energy.

In addition to the above, China has the world’s largest reserves of rare earth elements (REEs).  Compared to countries that have completed their own technology development and produced unique technologies, China is using its leadership in the field of rare earths to significantly regulate renewable energy.

Rare earths are a group of 17 elements and play an important role in many high-tech products and industries. China’s reserves of rare earths account for a large share of the total reserves worldwide. According to 2019 data, China’s reserves of rare earth elements are around 44 million metric tons. This is equivalent to about 40% of the world’s reserves. These reserves are considered an important source used to supply most of the rare earth elements worldwide.

China’s dominance of these reserves and its large share of the world market has caused some concern. This is because this could increase dependence on rare earths across the globe and threaten security of supply. Therefore, other countries are also making efforts to search for and produce rare earth elements. [2]


[1] “Çin’in Elektrik Kurulu Gücü 2023’te Yaklaşık 360 Gigavat Artışla 2 Bin 920 Gigavata Ulaştı.”, İstanbul Ticaret Gazetesi, https://istanbulticaretgazetesi.com/tr/cin-2023te-elektrik-kurulu-gucune-360-gigavat-kapasite-ekledi, (Date of Access: 02.02.2024).

[2] “Dünyada ve Türkiye`de NTE”, TENMAK, https://naten.tenmak.gov.tr/tr/nte-hakkinda/dunyada-ve-turkiye-de-nte.html, (Date of Access: 02.02.2024).

Ömer Faruk PEKGÖZ
Ömer Faruk PEKGÖZ
Gazi Üniversitesi-Enerji Sistemleri Mühendisliği