What China鈥檚 renewable energy boom means for the world
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Ann Scott Tyson Staff writer
| Hefei, China
At a sprawling facility in eastern China, engineers and quality control workers in blue and pink uniforms monitor the heavily robotic assembly line for Sungrow Power Supply Co. Ltd.
The firm is one of the world鈥檚 biggest producers of solar inverters 鈥� equipment critical to making electricity from solar panels usable in grids. And its products are now sold in 170 countries, part of the explosion of China鈥檚 renewable energy industry that is fueling trade tension but also facilitating the shift to green power, here and overseas.
Flanked by ceiling-high video screens showcasing Sungrow鈥檚 clean energy capabilities, Senior Vice President David Zhao boasts that the company鈥檚 total installed capacity has exceeded 500 gigawatts globally. 鈥淭his is a very great contribution鈥� to the green energy transition, he says at the company鈥檚 headquarters in Hefei, China.
Why We Wrote This
China鈥檚 booming renewable energy industry may be stirring trade tensions, but it could also accelerate a green transition 鈥� in China and elsewhere.
Experts say China鈥檚 rapid adoption of renewable energy is helping move the country toward its climate goals faster than expected. Last year, China made historic increases in installations of solar, wind, and other renewable energy, including adding 216 gigawatts of solar capacity 鈥� more than what exists in the United States.
China 鈥� the world鈥檚 biggest emitter of heat-trapping gases, accounting for 35% of carbon emissions in 2023 鈥� has committed to reaching its carbon peak by 2030 and carbon neutrality by 2060. But some analysts say its emissions could peak as early as this year, and then start declining. This also hinges partly on China鈥檚 ability to stabilize the country鈥檚 surging energy demand, a significant portion of which is still being met by coal.
鈥淚f the energy demand growth rates normalize and the green energy additions continue, then the first half of this year 鈥� so essentially right now 鈥� would be the peak,鈥� says Lauri Myllyvirta, senior fellow at the China Climate Hub of the Asia Society Policy Institute. 鈥淭here is no way to reach the global goals without a much faster peak in emissions in China,鈥� he says. 鈥淚t鈥檚 basically our only hope.鈥�
An energy 鈥渢ug of war鈥�
While the expansion of renewables is promising, China鈥檚 overall climate trajectory remains uncertain. The country remains highly dependent on coal and continues to open new coal-fired plants.
鈥淲hat has been happening in China is a tug of war between expanding renewables and growing overall power demand,鈥� says Jan Ivar Korsbakken, senior researcher at the CICERO Center for International Climate Research in Oslo, Norway. 鈥淐hina has built out renewables, solar, and wind power generation at just an incredible pace, quite unprecedented.鈥�
But electricity demand has also gone up, driven in part by new high-tech industries such as batteries, he says, illustrating the 鈥渧ery strong forces pulling in different directions.鈥�
This tension could mean that even if China鈥檚 emissions do peak early, they are unlikely to drop steeply, and could plateau, Mr. Korsbakken says.
Meanwhile, China鈥檚 government-backed dominance of the international market for solar panels, batteries, electric vehicles, and other green energy technologies is sparking trade retaliation. The U.S., Europe, and other advanced economies are concerned that a flood of cheap imports will undermine domestic producers, and possibly create national security risks.
On Tuesday, the Biden administration announced it will double U.S. tariffs on Chinese solar panels to 50% and quadruple those on Chinese electric vehicles to 100%, effectively barring them from the U.S. market.
鈥淐hina is determined to dominate these industries. I鈥檓 determined to ensure America leads the world in them,鈥澛燩resident Joe Biden said on X. He also raised tariffs to 25% on Chinese steel and aluminum, and to 50% on Chinese EV batteries and semiconductors.
Beijing responded to the new聽tariffs by calling the move protectionist and hypocritical, hinting at possible retaliation. The Ministry of Commerce called the tariffs politically motivated and said they violate international trade rules, according to the state-run Xinhua News Agency.
China 鈥渨ill take all measures necessary to defend our legitimate rights and interests,鈥� Foreign Ministry Spokesperson Wang Wenbin said at a press briefing Tuesday. 鈥淭he fast-growing Chinese new energy industries are what the world economy needs for green transition.鈥�
Green transition roadblocks
Indeed, experts say Beijing鈥檚 investments in renewable energy technologies and manufacturing benefit many countries that lack such industries, especially in the developing world. The trade barriers imposed by the U.S. and other developed countries will create inefficiencies and increase costs, at least in the short-to-medium term, says Mr. Korsbakken.
鈥淚n the long term, it [the tariffs] could be somewhat positive because you get more distributed production, which might be more stable and lend itself to faster expansion of renewables,鈥� he says. 鈥淭he issue, of course, is that we don鈥檛 have a lot of time.鈥�
One problem with China鈥檚 dominance of renewable energy industries is the relatively high level of coal in its electricity mix 鈥� meaning its production of solar panels and other clean energy equipment creates more emissions than it would in the U.S. or Europe.聽
Even as China has outpaced the world in its use of renewable energy, it remains the globe鈥檚 biggest producer and consumer of coal, and has undergone a surge in coal consumption since 2020.
And China continues to build more coal-fired power plants, in part to help fill gaps in electricity supply when solar, wind, and hydropower are unavailable. Some Chinese provincial officials favor building coal-fired plants locally to ensure a steady electricity supply and boost gross domestic product for their province, as well as for coal mining as a source of local jobs.
鈥淭he biggest challenge for China at the moment is to stop creating more jobs, capacity, and capital tied to coal mining and coal-fired power plants and coal-based steel mills,鈥� says Mr. Myllyvirta. Such expanded coal use, he says, will only 鈥渕ake the transition harder than it needs to be.鈥�
