Mentor’s Comment: In 2024, China installed more wind turbines and solar panels than the rest of the world combined, demonstrating its dominance in renewable energy manufacturing and supply chains. With a $940 billion investment in renewables in a single year, China has strategically leveraged state-owned enterprises (SOEs), policy backing, and supply chain control to become a clean-energy superpower.

Today’s editorial analyses China’s dominance in Green Energy. This topic is important for GS Paper II (International Relations) and  GS Paper III (Energy Sector) in the UPSC mains exam.

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Let’s learn!

Why in the News?

Recently, China has gained attention for investing a huge amount of money and taking the lead in the global green energy sector.

Why is China a global leader in renewable energy?

• Installed Capacity: China has the largest installed base of solar and wind energy in the world. Eg: By 2024, China added 300 GW of solar power, more than the rest of the world combined.
• Supply Chain Control: China dominates the entire renewable energy supply chain, from raw materials to finished products. Eg: It produces over 80% of global solar panels and a major share of battery components like lithium and cobalt.
• Massive Green Investments: China leads in clean energy investments, supported by government incentives and green bonds. Eg: In 2024, China invested $940 billion in clean energy, nearly triple that of the U.S.
• State-Led Policies: The government uses State-Owned Enterprises (SOEs) and policy mandates to drive green growth. Eg: SOEs like Huaneng and State Grid built large-scale wind and solar farms across the country.
• Export of Green Technology: Through the Belt and Road Initiative, China exports renewable energy infrastructure globally. Eg: Chinese firms are setting up solar projects in Africa and wind parks in Latin America.

How did domestic issues drive China’s green strategy?

• Severe Air Pollution: China faced toxic air quality, especially in industrial cities like Beijing, causing public health crises and unrest. Eg: The 2013 “Airpocalypse” led to mass protests, pushing the government to launch the Air Pollution Action Plan.
• Energy Insecurity: Heavy dependence on coal and imported oil created vulnerability in energy supply and pricing. Eg: China increased solar and wind deployment to reduce reliance on fossil fuel imports and enhance energy self-sufficiency.
• Economic Rebalancing Needs: China needed to shift from heavy industry to innovation-driven growth and green jobs. Eg: The government promoted green industries under the 13th and 14th Five-Year Plans to support sustainable development and tech leadership.

What role do SOEs play in China’s energy transition?

• Leading Renewable Deployment: State-Owned Enterprises (SOEs) are the primary drivers of solar, wind, and hydro projects, benefiting from state financing and land access. Eg: China Three Gorges Corporation built massive hydropower plants, including the Three Gorges Dam, aiding low-carbon electricity supply.
• R&D and Technology Innovation: SOEs invest in clean energy R&D, fostering breakthroughs in battery storage, grid tech, and EVs. Eg: State Grid Corporation of China has led innovations in ultra-high-voltage transmission to integrate renewables across vast regions.
• Policy Implementation and Scaling: SOEs act as instruments of the central government’s green policy, enabling fast scaling of infrastructure and meeting national climate goals. Eg: China Energy Investment Corporation rapidly expanded wind farms under the 14th Five-Year Plan.

What can India learn from China?

• Scale and Speed of Deployment: India can emulate China’s rapid infrastructure development in renewables by simplifying land acquisition and faster clearances.Eg: China added over 230 GW of renewable capacity in 2023, nearly 3 times India’s total renewable addition.
• Strong Role of Public Sector: India should empower its public sector undertakings (PSUs) to take a leadership role in clean energy, similar to China’s state-owned enterprises (SOEs). Eg: China’s SOEs like State Power Investment Corporation lead massive solar and wind projects, while India can enhance NTPC and SECI’s role.
• Domestic Manufacturing Push: China’s dominance is rooted in its robust clean tech manufacturing ecosystem. India should focus on R&D, incentives, and supply chains.

What are the steps taken by the Indian government? 

• National Solar Mission: Launched under the National Action Plan on Climate Change (NAPCC), this mission promotes solar power generation with a target of 280 GW by 2030. Eg: India has already crossed 81 GW of solar capacity as of 2024.
• Green Hydrogen Mission: The government launched the National Green Hydrogen Mission to make India a global hub for green hydrogen production and export. Eg: Target of 5 MMT green hydrogen production annually by 2030.
• PLI Scheme for Renewable Manufacturing: To reduce import dependence, the government introduced Production Linked Incentive (PLI) schemes for solar PV modules, batteries, and wind components. Eg: Over ₹24,000 crore allocated to boost domestic solar manufacturing.

What are the challenges in India? 

• Intermittent Energy Supply: Renewable energy like solar and wind is non-continuous, making it hard to meet demand consistently. Eg: In 2022–23, India’s solar power capacity was ~70 GW, but actual generation was only ~110 billion units, implying an average capacity utilization of ~18%.
• Inadequate Energy Storage: India lacks robust battery storage infrastructure to balance supply-demand fluctuations. Eg: As of 2023, India had only ~4.6 GW of battery storage, while the estimated need by 2030 is over 40 GW(CEA).
• Low Private Investment in Renewables: High risks and policy uncertainty reduce private sector participation. Eg: In FY 2022–23, investment in India’s renewable sector fell by 25%, from $14.5 billion in 2021 to $10.9 billion (IEEFA).

Way forward: 

• Strengthen Public-Private Partnerships (PPPs): Encourage collaboration between government, industry, and startups to accelerate clean energy innovation and deployment.
• Invest in Skill Development and R&D: Promote training in green technologies and boost research in storage, hydrogen, and grid integration to build long-term capacity.

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