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Source: Wikipedia

Context

China has recently received prominence for spending heavily in and leading the global green energy market.

Why is China a Global Leader in Renewable Energy?

Largest Installed Capacity

• China has the world’s biggest solar and wind energy base.
  
  
• By 2024, China added 300 GW of solar power, more than the rest of the world combined.
  
  
• This rapid capacity expansion gives China a dominant position in global clean energy production.
  
  

Control Over Renewable Energy Supply Chain

• China dominates the full supply chain, from raw materials to manufacturing finished products.
  
  
• It produces over 80% of global solar panels.
  
  
• Controls major portions of battery components like lithium and cobalt, crucial for electric vehicles and storage systems.
  
  

Massive Green Investments

• China is the top investor in clean energy.
  
  
• In 2024, it invested $940 billion in renewable energy, nearly three times the U.S. investment.
  
  
• These investments are backed by government incentives and green bonds, encouraging large-scale renewable adoption.
  
  

State-Led Policies and Enterprises

• The Chinese government drives green growth using State-Owned Enterprises (SOEs) and policy mandates.
  
  
• Major SOEs like Huaneng and State Grid have built extensive wind and solar farms across the country.
  
  
• Government planning ensures faster project approvals and funding.
  
  

Global Export of Green Technology

• Through the Belt and Road Initiative (BRI), China exports renewable energy infrastructure worldwide.
  
  
• Chinese firms set up solar projects in Africa and wind parks in Latin America, strengthening China’s global influence in green technology.
  

Strategic Foundations of China’s Green Push

• Planned Transition through Policy and Investment: China's transition to green energy began in the early 2000s with tiny pilot projects. The shift gained traction with the Renewable Energy Law (2005) and the 11th Five-Year Plan (2006-2010), which made clean energy a national priority. Producers received massive subsidies, guaranteed grid access, and regulatory incentives.
• Massive Financial Commitments: Investment increased from $10.7 billion in 2006 to $940 billion in 2024, according to Carbon Brief. In contrast, India received only $3.4 billion in 2024-25, demonstrating China's unprecedented commitment.
• Tackling Pollution and Energy Insecurity: In Beijing and Shanghai, air pollution reached crisis levels, prompting popular outrage and urgent government intervention.  Simultaneously, energy insecurity caused by increased electricity demand and reliance on oil imports prompted China to diversify energy sources.

Green Energy and Its Global Significance

What is Green Energy?

• Green Energy is a key driver of sustainable development as the world faces the climate crisis.
  
  
• It refers to energy produced from natural, renewable sources that cause minimal environmental impact and emit little to no greenhouse gases.
  
  
• Major sources: Solar, Wind, Hydropower, Biomass, and Geothermal energy.

Global Green Energy Landscape (2024)

• Renewables provided 40.9% of global electricity, the highest share since the 1940s.
  
  
• Solar energy contributed 474 TWh, remaining the fastest-growing energy source for the 20th consecutive year.
  

Regional Developments

• United States and European Union: Investing billions to reshore and strengthen clean energy industries.
  
  
• Brazil and Germany: Expanding bioenergy and offshore wind capacity.
  
  
• Africa: Emerging as a new frontier for renewable energy projects.
  
  
• China: Leading investments in nuclear and solar energy, setting global benchmarks.
  

Significance

• Green energy supports climate change mitigation, energy security, and sustainable economic growth.
  
  
• It reduces dependency on fossil fuels and helps nations meet net-zero emission targets.
  

Role of SOEs in China’s Energy Transition

• Leading Renewable Deployment
  
  
• State-Owned Enterprises (SOEs) are the main drivers of solar, wind, and hydro projects.
  
  
• They benefit from state financing and easy land access, allowing large-scale projects.
  
  
• Example: China Three Gorges Corporation built major hydropower plants, including the Three Gorges Dam, ensuring a strong supply of low-carbon electricity.
  
  
• R&D and Technology Innovation
  
  
• SOEs invest heavily in clean energy research and development.
  
  
• They promote breakthroughs in battery storage, electric vehicles (EVs), and grid technology.
  
  
• Example: State Grid Corporation of China pioneered ultra-high-voltage transmission, helping integrate renewable power across vast regions.
  
  
• Policy Implementation and Scaling
  
  
• SOEs work as key instruments for government green policies, enabling rapid infrastructure scaling.
  
  
• They help meet national climate goals efficiently.
  
  
• Example: China Energy Investment Corporation quickly expanded wind farms under the 14th Five-Year Plan.

What India Can Learn from China

• Scale and Speed of Deployment
  
  
• India can emulate China’s fast renewable growth by simplifying land acquisition and speeding up clearances.
  
  
• Example: China added 230+ GW of renewable capacity in 2023, almost three times India’s total annual addition.
  
  
• Empowering Public Sector
  
  
• India should strengthen Public Sector Undertakings (PSUs) to lead the clean energy transition.
  
  
• Example: China’s SOEs like State Power Investment Corporation drive large-scale renewable projects; India can boost NTPC and SECI’s role.
  
  
• Domestic Manufacturing Push
  
  
• China’s success stems from a robust clean-tech manufacturing base.
  
  
• India must invest in R&D, incentives, and supply chains to build a competitive renewable energy ecosystem.

India’s Learning from China’s Green Energy Success

1. Reducing Import Dependence

• India cut solar module imports from China by 76% (2023) to boost self-reliance.
  
  
• 40% customs duty on solar modules and 25% on solar cells imposed.
  
  
• Domestic manufacturing promoted via Production Linked Incentive (PLI) schemes for solar and battery production.
  

2. Strengthening Grid and Storage

• Learning from China’s grid bottlenecks, India is investing in:
  
  
• Green Energy Corridors for better transmission.
  
  
• Battery storage systems for renewable energy stabilization.
  
  
• Pumped hydro projects (51 GW planned by 2032) to balance intermittent supply.
  

3. Decentralized and Inclusive Growth

• Moving away from China’s centralized SOE model by promoting:
  
  
• Rooftop solar via PM Surya Ghar Yojana.
  
  
• Agri-PV and PM-KUSUM schemes for rural solar energy deployment.
  
  
• Hybrid tenders combining solar, wind, and storage to ensure grid stability.
  

4. Critical Minerals and Technology Independence

• Developing a critical minerals framework to reduce reliance on China for lithium, cobalt, and rare earths.
  
  
• 12 critical minerals and 35 capital goods exempted from import duties to promote domestic innovation and manufacturing.

Way forward:

• Strengthen public-private partnerships (PPPs): Encourage collaboration among the government, industry, and startups to boost sustainable energy research and deployment.
• Invest in skills development and R&D: Promote green technology training and research in storage, hydrogen, and grid integration to enhance long-term capacity.

Practice Question Q. To what factors can be the recent dramatic fall in equipment cost and tariff of solar energy be attributed? What implications does the trend have for thermal power producers and related industry?