China’s spending on projects to cut carbon emissions has helped new investments in the clean-energy industry in the Asia-Pacific region increase 58% in the third quarter in comparison to the second. Investments in ventures such as wind farms, solar installations, and hydropower plants increased to US$7.1 billion in the third quarter of 2009 from US$4.5 billion in the preceding three months. China was the biggest recipient of clean-energy funds in the region, accounting for around 70% of total clean energy funds. Money for clean energy projects, especially in the Chinese wind and solar sectors, came mainly from state-owned banks that offered low-interest loans to project developers.
Significance: The growth in Asian energy investments may have been prompted by China’s green stimulus spending plan, a significant increase in its wind generation targets to 100GW by 2020, and the government’s introduction of fixed feed-in tariffs for new onshore wind power projects of 0.51 yuan (US$0.075), 0.54 yuan, 0.58 yuan, and 0.61 yuan on a regional basis (which represents a premium compared to tariffs-per-kWh on coal-fired generating projects), and have helped to propel investment in the sector (see China: 18 August 2009: China Kicks Off Construction of 10-GW Wind Farm in Gansu Province). Although a huge proposed solar power project in Inner Mongolia and construction of a massive 10-GW wind farm in Gansu province will help maintain investment levels in renewable energy, this could be offset by growing concerns over the social and environmental impacts of hydropower projects and reports that China plans to slash the number of wind turbine companies by 90% due to surplus capacity in the sector and the potentially destabilising impact on state banks of supporting non-commercially viable wind projects (see China: 2 October 2009: Chinese Government to Slash Number of Wind Operators by 90%).
