China - China to export $100bn in renewable energy technology in 2022, bright future ahead
China is continuing its rapid expansion into global new energy markets with exports of solar PV, wind turbines, and energy storage equipment, expected to be worth $100 billion this year, data from energy research firm Wood Mackenzie showed.
Nearly 90% of Li-ion batteries and two thirds of solar module manufacturing capacity are in China along with vast ecosystems of people, industrial parks, materials supply, and logistics.
Indeed, there is a very bright future for renewable energy exports from China given the country’s huge domestic market scale, coupled with improving technology, as well as competitive energy and labour costs, delegates at the Wood Mackenzie’s Power and Renewables Conference APAC heard on Wednesday.
Still, US and Western policy makers remain concerned about their countries reliance on China’s supply chain for new energy technology. China’s share of global manufacturing capacity stands at 50% for wind turbines, 66% for solar modules, and 88% for battery storage, according to data from Wood Mackenzie.
Most of the wind turbine production capacity serves domestic demand as China’s technology is lagging Western peers, but overseas orders are starting to rise with a backlog of 11GW as of June, said analysts at the company. Conversely, much of China’s solar module and battery storage production is exported.
“Foreign countries are facing a tough choice between lower cost exports from China and trying to onshore renewable energy manufacturing in their own markets,” said Alex Whitworth, head of Asia Pacific power and renewables research at the firm.
However, surging inflation in the US is putting pressure on the Biden administration to rethink additional tariffs on Chinese imports and this will probably benefit China, noted Wood Mackenzie.
The US has also given an exemption for solar tariffs on imports from Vietnam, where many Chinese investors have invested in module manufacturing. Therefore, this will, to some extent, benefit China’s solar makers, said Yanting Zhou, principal economist, APAC, at Wood Mackenzie.
Wind, solar and storage equipment costs in China have remained among the lowest in the world, as technology and scale advantages are increasing, helped by a large domestic market.