Recommendations for improving the effectiveness of renewable energy policies in China

Oct 2009

Growing recognition of the important role that renewable energy can play in tackling climate change and ensuring energy security has led to a rapid boom in the industry over the last five years. According to the Renewables Global Status Report 2009 Update, annual renewable energy investment has increased fourfold since 2004 to reach USD120 billion in 2008. This was the first year that new power generation investment in renewables was greater than investment in fossil fuel technologies. Solar heating capacity doubled to 145 gigawatts-thermal (GWth), while biodiesel production increased sixfold to 12 billion liters per year and ethanol production doubled to 67 billion liters per year.
Grid-connected solar PV continued to be the fastest growing power generation technology and other sources of renewable energy, such as biofuels, biomass power, and solar thermal, also showed strong growth.
Although policies supporting renewable energy development continue to expand worldwide, the effect of the financial upheaval on both banks and businesses has had a negative impact on the industry. Many construction projects have been delayed, orders have been postponed, and prices have dropped rapidly. Generally speaking, the influence of the global financial crisis and the resulting economic recession is expected to bring challenges to the renewable energy industry, but it has not been as severe as in other industries, and even less so in China.
To deal with the crisis, many countries are embracing renewable energy as an essential economic recovery measure. The EU reconfirmed its target of achieving a 20 percent share of renewables in the regionā€˜s energy mix by 2020. The United States is turning to renewable energy as the foundation for reinvigorating its large economy and creating jobs. In early 2009, the government allocated USD150 billion from its USD800 billion stimulus package over 10 years to create incentives for new energy and energy efficiency sectors. The United States House of Representatives also approved a bill in June 2009 meant to address climate change and transform the way the nation produces and uses energy. In addition, Japan announced a 1 trillion yen investment over five years, South Korea launched a USD36 billion package over four years, and Australia was to accelerate an existing AUD500 million renewable energy fund from the original six years to just 18 months.
China has announced a stimulus package of RMB4 trillion (USD586 billion) to help the economy recover, in which clean energy is one of the main supporting areas.

By: REN21

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