China’s leading energy superpower, says IRENA report

China and India – two emerging powers in the Pacific – have been singled out as nations that are poised to become super powers in the geopolitics of the energy transformation that is currently taking place around the world.

This is the conclusion of a ground-breaking report that the international authority on renewable energy, IRENA, released at its 9th general assembly that Abu Dhabi – capital of the United Arab Emirates – hosted over the past four days.

IRENA – the International Renewable Energy Agency’s outgoing Director General Dr Adnan Amin said the report was groundbreaking because it was the first such report to be commissioned on the energy transformation that has gripped the world as more and more countries are embracing renewable sources of energy, and reducing dependence on fossil fuels.

“China will gain from the energy transformation in terms of energy security,” predicts page 28 of the 88-page report. “It has a leading position in manufacturing, but also in innovation and deployment of renewable energy technologies. It is the biggest location for renewable energy investment, accounting for more than 45% of the global total in 2017.”

“Leaders in technological innovation are positioned to gain the most from the global energy transformation. No country has put itself in a better position to become the world’s renewable energy superpower than China. In aggregate, it is now the world’s largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles, placing it at the forefront of the global energy transition.

“China is by far the largest global manufacturer of these clean energy technologies (wind turbine components, crystalline silicon PV modules, LED packages, and lithium-ion battery cells). In addition, it leads the world in renewable energy patents.

“China’s concerted efforts to research, develop and invest in renewable energy and clean transport over its industry the opportunity to overtake US and European companies, which have been dominant in sectors such as cars and energy machinery. This will give China a comparative advantage in trade and lend impetus to the country’s economic growth.

“By taking the lead on renewables, China has improved its geopolitical standing in several respects. By producing more of its own energy, China is reducing its reliance on fuel imports and the risks of energy disruption which could put a brake on its economic ambitions. Its technological expertise in renewables has established it as a leading exporter of clean energy technology, creating a balance of trade advantage.”

Enhancing China’s position in the new geopolitical map of the 21st century, the report stated was China’s Belt and Road Initiative. BRI is a strategic global plan, the report said.

“Supported by over a trillion US dollars of dedicated financing over its lifetime, it is one of the world’s most ambitious infrastructure development programmes. The BRI aims to create a network of ports, railways, roads, pipelines and industrial parks that will link China to cities as far away as Bangkok and Rotterdam.

“No less bold is the ambition of State Grid, China’s largest state-owned company, to create a global supergrid called the ‘Global Energy Interconnection’ (GEI) that will link every continent with undersea transmission cables to power the world with green electricity.

“The BRI and the GEI have strategic objectives. China hopes to reduce its de- pendence on energy and commodity imports that pass through chokepoints such as the Straits of Malacca and the South China Sea. China’s infrastructure diplomacy could be as important to 21st century geopolitics as the protection of sea lanes was to the hegemony of the United States in the 20th century.”

On India, the report ‘A New World’ observed that India has been among the fastest-growing economies in the world in the last few years, lifting millions out of poverty.

“It is projected to have the world’s largest population by 2024 and is poised to overtake China as the world’s largest energy growth market by the end of the 2020s.

“India has set itself an ambitious target of 175 GW of renewables by 2022. This represents a massive increase, considering that India’s total installed power generation capacity in October 2018 was only 346 GW.”

India is also among leaders in energy diplomacy with its leadership in the newly established International Solar Alliance, ICA. The report said while many new alliances like ICA are at an early stage of development and focus on technological cooperation, they were likely to gain in geopolitical impact.

“At the launch of the first Assembly of the International Solar Alliance (ISA), India’s Prime Minister, Narendra Modi, said that the “ISA will play the role of OPEC in the future.” While the ISA is still in its formative stage, India hopes to forge deeper trade and political ties with the developing world through solar diplomacy.”

The report was the work of the Global Commission on the Geopolitics of Energy Transformation, which IRENA established in January 2018. Eighteen experts from around the world were invited to be members of the Commission.

Commissioners included former New Zealand foreign minister Murray McCully, former head of the United Nations Framework Convention on Climate Change Christiana Figueres, former Director General of the World Trade Organisation Pascal Lamy and a former US Secretary of Energy Bill Richardson.

The Commission was chaired by Olafur Grimsson, the former President of Iceland and supported by the governments of Germany, Norway and the United Arab Emirates.